ISLAMABAD: The Pakistan Telecommunication Authority (PTA) has invited applications from Pakistani and foreign cellular mobile operators for 12.8 MHz paired in the 1,800 MHz band and 15 MHz paired in the 2,100 MHz band for technology neutral Next Generation Mobile Services (NGMSs).

The PTA has issued the Information Memorandum (IM), according to which the auction is scheduled to be held on September 21, 2021; however, according to sources the operators may require more time for consultation.

However, the auction may be held latest by September 30, 2021.

The Spectrum Auction is for the use of spectrum from the internationally harmonised 1800 MHz and 2100 MHz bands.

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The spectrum included in the Spectrum Auction comprises: a) 2 x 12.8 MHz in the 1800 MHz band; and b) 2x15 MHz (1960-1975 MHz/2150-2165 MHz) in the 2100 MHz band.

The 2x12.8 MHz of spectrum in the 1800 MHz band will be packaged as one block of 2x5 MHz and 39 blocks of 2x0.2 MHz. Applicants are subject to the spectrum cap of 30 MHz (40% of the total spectrum) across the 1800 MHz band.

The 2 x 15 MHz of spectrum in the 2100 MHz band will be packaged as three blocks of 2x5 MHz: a) 2x5 MHz (1960-1965 MHz/2150-2155 MHz); b) 2x5 MHz (1965-1970 MHz/2155-2160 MHz); and c) 2x5 MHz (1970-1975 MHz/2160-2165 MHz).

In order to avoid asymmetric spectrum holdings and to ensure that all CMOs have a chance to standardise their spectrum holdings in the 1800 MHz band, a spectrum cap has been imposed in the 1800 MHz band which will limit the amount of spectrum that can be acquired in the 1800 MHz band in the Spectrum Auction. This is set at 40 percent of all spectrum in this band - 2x30 MHz in total, taking into account each CMO's Existing Spectrum including sub-judice.

Given each CMO's Existing Spectrum in the Band: a) Jazz will be able to bid on up to 2x5.2 MHz as Jazz is currently using 2x24.8 MHz of spectrum in the 1800 MHz band; b) Zong will be able to bid on up to 2x7.4 MHz as Zong is currently using 2x22.6 MHz of spectrum in the 1800 MHz band (2x16 MHz of its licensed spectrum plus temporary additional 2x6.6 MHz spectrum being sub-judice in a Court of Law); and c) Telenor and Ufone are not constrained by this spectrum cap, given that each of them currently holds less than 2x10 MHz of 1800 MHz spectrum.

In the first stage, all applicants will be required to provide information as per the application form given. All applicants will also be required to submit, along with their application, an irrevocable sealed-bid form.

In the sealed-bid form and subject to the rules set out in this IM, each applicant will be required to state their interest out of the following spectrum at the Base Price: a) Product 1:39 blocks of 2x0.2 MHz in 1800 MHz; b) Product 2: One block of 2x5 MHz in 1800 MHz; c) Three specific blocks of 2x5 MHz in 2100 MHz: i.) Block 9 (1960-1965 MHz/2150-2155 MHz). ii.) Block 10 (1965-1970MHz/2155-2160 MHz) iii.) Block 11 (1970-1975 MHz/2160-2165 MHz).

All applicants must state their interest in Product 2 in 1800 MHz, if they are interested in acquiring more than 2x4.8 MHz within the 1800 MHz band.

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In addition, applicants are subject to the spectrum cap of 30 MHz within the 1800 MHz band, comprising existing spectrum holdings (including any sub-judice spectrum for the purpose of spectrum cap only) and spectrum available for auction.

Applicants will also be required to submit a pre-bid deposit at this stage for 20 percent of the cumulative base price for those blocks on which they have expressed their interest.

The Electronic Auction Stage will be conducted sequentially: a) First - A Clock Auction for the 1800MHz spectrum; and b) Second - A Simultaneous Multi-Round Ascending Auction (SMRA) for the 2100MHz spectrum.

In line with the written consent given by all CMOs, and as per policy directive, PTA/FAB shall undertake a process for the rationalisation of spectrum in the 1800 MHz band to achieve contiguity, where feasible (the Rationalisation Process).

The Rationalisation Process will involve entire spectrum in 1800 MHz band and all CMOs, irrespective of their participation in the auction.

The Rationalisation Process will be conducted in accordance with the time lines set out in Section 1.7 of this IM.

Under the Rationalisation Process, the PTA will endeavour to group together, in the 1800 MHz band, each CMO's Existing Spectrum and the auctioned spectrum.

This may involve a CMO's Existing Spectrum changing from its current position, either up or down in the band.

Suppose one CMO has 2x8.8 MHz of Existing Spectrum and that it acquires 2x1.2 MHz in the auction.

In that case, the PTA will group its 2x8.8 MHz of Existing Spectrum adjacent to its 1.2 MHz of Auction Spectrum, to make a contiguous block of 2x10 MHz.

The base price for 1800 MHz - Blocks in Product 1 of 2x0.2 MHz is $6.2 million, for 1800 MHz- Blocks in Product 2 of 2x5.0 MHz is $155 million, and 2100 MHz Blocks of 2x5.0 MHz is $145 million.

The PTA has stated that expected revenues from spectrum auction is dependent on various factors such as: (i) If all the spectrum available for auction is sold at base price then an estimated revenue of $831.8 million is expected; (ii) However the expected revenue can vary if any spectrum remains unsold; (iii) or the estimated revenue can be higher if the spectrum is sold at higher than the base price through auction.

Copyright Business Recorder, 2021