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May 2, 2019

Govt yet to approve renewal policy for cellular operators


May 2, 2019

ISLAMABAD: The licences of two major mobile operators will cease to exist after three weeks on May 25 and the government has so far failed to approve renewal policy directive for cellular operators.

Owing to lingering differences and interpretations among different departments, delay is caused on an issue from which the government expects multi-million dollars inflows. The initial terms of 15 years of three cellular licences including Telenor, Warid now merged with Mobilink with the name Jazz and China Mobile Pakistan ‘Zong’ is going to expire within 2019.

The licence of Telenor Pakistan and Jazz is going to expire on May 25, while Zong’s licence renewal date will become due in October this year. However, no policy framework has so far been finalised and approved to renew these expiring licences.

The Ministry of Information Technology (MoIT) is responsible to place policy framework for renewal of licences, while Pakistan Telecommunication Authority (PTA) will execute this policy framework.

The political transition in the country and inability to fill key posts well on time paved the way for finalisation of information memorandum (IM) as there was requirement to hire consultant to come up with policy keeping in view market trends acceptable to both sides. However, this process could not be done well on time.

The government decided to form ministerial committee to take decision on base price for renewal of licence due to paucity of time. A top official of the MoIT, when contacted by The News on late Tuesday night, told this correspondent that the ministry forwarded a summary to the federal cabinet on this subject, however, they decided to constitute ministerial committee to take decision on this subject after detailed deliberations.

When the official was asked further details about the committee, he refused to share the composition of the committee. Sources said that difference of opinion exists within the members of the cabinet on pricing issue after which a sub-committee was formed to take decision about the renewal of licences policy.

The mobile operators are quite perturbed over this delay in policy and argued in background discussions that such decisions were usually taken by governments six months ahead of due date of expiry of licences. It’s quite strange that only three weeks are left and they are still clueless.

The mobile operators have sent a number of communications to government to remind it that during the last decade the cellular telecom industry showed growth despite the fact that may other sectors of the economy remained placid. One of the major factor fuelling this growth was influx of significant foreign exchange in the sector as three out of four cellular operators are 100 percent owned by the foreign investors, whereas a another foreign investor is also holding 26 percent stakes with controlling rights of the holding company of the fourth cellular operator.

The initial terms of 15 years of three cellular licences i. e Telenor, Warid now merged with Mobilink with the name Jazz and China Mobile Pakistan ‘Zong’ is expiring in 2019. Unlike fixed line operator’s licences, these licences coupled with spectrum in 900 and 1800MHz band have significant market prices. The spectrum of Telenor and Warid is going to expire on May 25, 2019, however, it is failure on part of government that it has not yet come up with the policy to offer this spectrum to existing or new operators.

The major cause of concern between these cellular operators and government is the price of renewed spectrum. As per information revealed in concerned quarters in the government, the per MHz price of renewed spectrum would be in accordance with the benchmarks set in auctions held in 2016 and 2017 i.e. per MHz price of 900MHz and 1800MHz is $39.5 million and $29.5 million. Whereas telecom operators are insisting that they will pay the same price paid by another cellular operator for its renewal of licence for similar frequency bands in 2014.

The delay on part of the government in announcing fresh policy directive for the renewal/auction of frequencies may force the international investors to revisit their investment policies and look for markets that are more competitive. This will also hamper the overall business climate in Pakistan at a critical junction when the economy is already facing severe challenges.

Another relevant matter is chasing telecom industry cellular-WLL alike the technology neutrality regime. All the licences issued by the Pakistan Telecommunication Authority (PTA) are in line with the government prevailing policies.

These licences promise to provide technology neutrality for efficient utilisation of frequency spectrum. However, the interference from other entities of the government by questioning the government policy and PTA regulatory regime has adversely affected the telecom sector, added the sources.

The easy and prompt grant of Right of Way for deployment of telecom network is an issue for telecom operators. Sometime, telecom operators are out-rightly denied or face long delays in deployment in cases where infrastructure is to be deployed at government owned land, cantonments or in independent housing societies. These kinds of issues need to be resolved to facilitate everyone by bringing all stakeholders under a legal cover for timely resolution of any concerns that may lead to a dispute, they added.

This correspondent made efforts to get official version of the MoIT and PTA, but could not succeed.

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