Cellular spectrum auction expected to fetch $831.8mln

ISLAMABAD: Pakistan Telecommunication Authority (PTA) has invited bids for the sale of cellular spectrum in 1800 and 2100 Mhz bands, expecting to raise $831.8 million, it said on Friday.

According to Information Memorandum (IM) issued recently the government has allowed existing and new foreign and local entrants to participate in the auction.

The Ministry of Finance in the budgetary documents for this fiscal year had estimated the government was likely to generate Rs45.436 billion through the auction of spectrum space in the current fiscal year.

If the entire spectrum available for auction is sold at the base price, the expected revenue will stand at around $831.8 million; however, if sold at a price higher than the envisaged one the revenues can further go up.

According to Information Memorandum (IM) issued by PTA, all the existing cellular mobile operators (CMOs) and potential new entrants may apply to participate in the auction process and any potential new entrant gaining spectrum in the auction is encouraged to negotiate national roaming with existing CMOs.

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

The spectrum included available for auction comprises 2 x 12.8 MHz in the 1800 MHz band and 2x15 MHz (1960-1975 MHz / 2150–2165 MHz) in the 2100 MHz band.

The 2 x 12.8 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 percent of the total spectrum) across the 1800 MHz band.

The current allocation of spectrum bands is defined in Pakistan Table of Frequency Allocations, which is consistent with the International Telecommunications Union (ITU) allocations for region.

Licences, to use the spectrum will be awarded, for duration of 15 years, by means of a two stage process.

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.

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 information submitted by applicants will be assessed by the PTA and those considered suitable for participation and have submitted the correct pre-bid deposit will, as per the timelines set, be informed by the PTA they are qualified applicants.