Govt to auction frequency spectrum with $295 million base price

ISLAMABAD: Government on Wednesday allowed Pakistan Telecommunication Authority (PTA) to auction a next generation mobile services (NGMS) licence with a base price of $295 million from the frequency spectrums left unsold in the previous two auctions.

The auction is expected to take place during the current financial year. It will depend on the appetite of the market but it is expected that some existing players will like to get the remaining spectrum of NGMS technology to increase their penetration into the expanding market.

The ministry of information technology and telecommunications issued a policy directive to PTA to conduct ‘transparent and competitive’ auction for allocation of single block of 10 megahertz paired spectrum in the 1,800MHz band.   An auction supervisory committee of the IT ministry was analysing the market demand to fix the benchmark pricing of the remaining unsold spectrum during the current fiscal year. Prime Minister Nawaz Sharif constituted the committee to analyse the market trend and recommend action plans.

“Base price of the block on offer has been set at $295 million after thorough analysis and based on the market demand study of the PTA and international technology and market benchmarking,” said a statement.

In 2014, the government managed to fetch more than one billion dollars from the auction of third and fourth generation (3G/4G) mobile phone networks to telecom operators in Pakistan. In the mid of the last year, it awarded another 4G spectrum licence to Norwegian mobile service provider Telenor and raised $395 million.

Requirement of more frequency spectrum, which is a critical input for high quality mobile broadband services, is increasing due to growing demand of mobile internet.

Mobile broadband penetration grew to more than 27 percent from three percent of mobile phone users in 2013.

PTA will conduct the auction within this financial year. Payment terms and conditions will remain the same as were in 2014 NGMS auction. All existing mobile operators as well as new entrants will be eligible to participate in the auction. New licence for provision of NGMS services will be issued to successful bidder for a period of 15 years. Provisions of Telecommunication Policy 2015 related to sharing of infrastructure and national roaming will be applicable on the licence holder.

The advisory committee convened a series of meetings and extensively deliberated on different options and market scenarios. In its last meeting, the advisory committee finalised its recommendations for approval of the cabinet.

In the policy directive, PTA was directed to design the auction process to fulfill policy objective of optimal outcome.

“The current move by the government to supply the market with critical commodity of frequency spectrum will prove to be an important milestone in enabling mobile industry to aggressively expand their networks to each and every nook of the country while maintaining quality of service standards for Pakistani users and digital economy of the country,” said the statement.