Jazz & Telenor: IHC directs PTA to decide renewal of companies licences by July 15

The Islamabad High Court (IHC) has directed Pakistan Telecommunication Authority (PTA) to decide about the renewal of licences of the mobile companies by July 15.
A single bench of IHC comprising Chief Justice Athar Minallah on Friday last after hearing the petitions of mobile operators reserved the judgement. Jazz and Telenor approached the IHC to decide on the terms of licence renewal in an equitable, fair and transparent way. Jazz statement sought to have licence renewed as per the terms of its licence and the Telecom Policy of 2015.
The cellular mobile licences of Pakistan Mobile Communications Limited (ex Warid/Jazz) and Telenor Pakistan Limited (Telenor) expired on May 25, 2019 and are due for renewal; while China Mobile Pakistan (CMPak Zong) licence is due to expire on October 22, 2019.
Justice Minallah ordered the mobile operators to appear before the PTA on June 25. He said mobile companies could approach the IHC after the decision of the PTA on their applications for renewal of licences.
The order said directions were issued to the PTA and mobile companies after the consensus developed among their counsels. Hamid Khan Advocate represented the mobile operators, while Advocate Munawar Iqbal appeared on behalf of the PTA.
The IHC chief justice after referring the matter to the PTA disposed of the case.
The PTA issued cellular licences to Telenor Pakistan and Warid Telecom on May 26, 2004 for a period of 15 years, under the Mobile Cellular Policy, 2004, on payment of $ 291 million after auction. Cellular licence of Paktel Limited now China Mobile Pakistan (Zong) was also renewed by PTA under the 2004 Policy on October 23, 2004 for a period of 15 years on payment of $291 million.
In 2014, the government of Pakistan renewed the licence of the state-owned entity, Ufone, at $291 million through interest-free payment instalment in order to maintain a level playing field. Telenor Group had recommended that upcoming licence of Telenor Pakistan and other operators be renewed under the same terms and conditions.
Veon, one of the largest foreign investors in Pakistan sought predictable and transparent investment climate and licence renewal price not more than $291 million.
On May 7, 2019 the federal cabinet approved policy for renewal of cellular mobile licences for 15 years, of which the government has estimated to generate revenue of $1.37 billion. The government approved to renew licenses of two operators at $450 million each while the third operator would have to pay $470 million.
Later, the Ministry of Information Technology and Telecommunication issued policy directive to PTA and Frequency Allocation Board (FAB) for renewal of three cellular mobile licences.
According to the policy directive, the price for the right to use frequency spectrum included in the licences being renewed shall be in accordance with per MHz price benchmarks from frequency spectrum auctions of 2016 and 2017 ie. per MHz price for frequency spectrum in 900 MHz and 1800 MHz shall be USD 39.5 million and $29.5 million, respectively.
The tenure of the renewed licences shall continue to be for 15 years. Payment terms shall be 100 percent upfront or 50 percent upfront with remaining 50 percent on five equal annual instalments on LIBOR+3 percent. The renewal fee shall be paid in US dollars with the option to pay in Pak rupee, which will be calculated at the market exchange rate applicable at the time of payment, as per precedence of earlier cellular licence issuance/renewal.
However, telecom operators had approached the court and the government gave one month extension to mobile operators for licence renewal.
The policy directive states, "The payment (100 percent or 50 percent upfront as the case may be) will be due on 25th June, 2019. In case, the spectrum is utilised till 25th June 2019 and requisite payment is not made, the proportionate amount will be charged, for the said period, in addition to any legal action as per the act, rules, policy, etc.