The government has rejected telecom operators' proposals of withdrawal of different taxes, lifting restrictions on SIM count and offer of two lots each of 2x5 MHz spectrum before the Next Generation Mobile Services (NGMS) spectrum (3G) auction, it is learnt. The Auction Committee of Pakistan Telecommunication Authority (PTA) has prepared response to proposals/demands of telecom operators on Information Memorandum (IM) and license template and shared with all stakeholders, sources revealed to Business Recorder.
Mobile operators suggested the withdrawal of 10 percent advanced income tax on the assignment of spectrum, bringing back the import/customs/import duties to the level of 2013-14, and recognising the long pending industry status/undertaking to the telecom sector. They further suggested withdrawal of withholding tax, sales tax and FED on usage of data services. However, PTA has responded that successful bidder/licensee would have to follow laws of the land including payment of taxes/duties.
Telecom operators argued that after Biometric Verification System (BVS), there is no reason to keep the restriction on number of SIMs and requested government to fulfil its commitment and the industry be assured of no restrictions on SIM count. The PTA responded that orders of the Supreme Court of Pakistan will have to be followed in this regard which has restricted the SIM number to five per CNIC.
Operators also suggested that instead of one lot of 2x10 MHz, government may offer two lots each of 2x5 MHz spectrum and applicants may be allowed to participate for a minimum of 2x5 MHz of 850 MHz spectrum lot as was the case in 2014 auction of 2100 MHz frequency band. However, they got the response that the spectrum block has been defined in-line with the policy issued by Ministry of Information Technology dated 26 April, 2016.
Telecom operators had proposed that the spectrum to be auctioned may be made free of any interference from any unauthorised transmissions. The PTA responded that spectrum has been cleared by Frequency Allocation Board and made available for auction. However if interference in electromagnetic environment exists it can be resolved through mutual co-ordination.
Any change in payment mechanism of annual spectrum administrative fee (ASAF) in light of Telecommunication Policy 2015 may be applied with the consent of the Licensee, operators had proposed. However, the PTA responded that any change in payment mechanism of ASAF in light of Telecommunication Policy 2015 will be framed with industry consultation.
Telecom operators further proposed that the requirement of the performance bond for the purpose of roll out obligations may only be in case of a new entrant acquiring the license. In case of existing NGMS licensee, no additional performance bond is required since they have already submitted the performance bond and achieved multiple milestones;
However, the PTA responded that performance bond obligation will be applicable for technologies not already deployed at the time of rollout/commencement of that technology.
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