Govt eyes telecoms spectrum auction to shore up forex reserves

ISLAMABAD: The government has planned auctions of telecom spectrum in different bands to fetch $300-$500 million in the remaining months of the current fiscal year to stave off a balance of payment crisis and help shore up depleting foreign currency reserves, sources said on Monday.

"Another option is to push Etisalat to pay the outstanding dues of $800 million on account of the privatisation of the PTCL (Pakistan Telecommunication Company Ltd), which remains unpaid even after almost two decades," a source said.

Pakistan requires dollars to avert a full-blown crisis. The last regime failed to muster up the required support in the last spectrum auction held in September 2021 in which only Ufone entered and bought 28.8 MHz for $269 million.

Other players did not participate in the auction owing to a variety of different reasons. Now it is being explored whether the spectrum, which is available in bands of 900 MHz, 1300 MHz, 1800 MHz, and 2100 MHz, can lure buyers and generate dollars.

There is a lot of spectrum available and some of it has so far been untouchable in Pakistan. Out of available spectrum of 50 MHz in different bands, if the government was able to sell 30 MHz, it could generate $500-$600 million before June 30, 2022.

“The consultation process has been underway and some firm steps can be taken after Eid holidays as the Ministry of Information Technology might move a formal proposal to explore this available spectrum auction to potential existing buyers,” a senior official confirmed while talking to The News.

The official said first of all the government would have to constitute an Auction Supervisory Committee under the chairmanship of Federal Minister for Finance Miftah Ismail to move ahead with the spectrum sale at an accelerated pace.

“One of the options could be utilising the old base price of $29 per MHz, being finalised by the consultant on the occasion of the last auction for provision of Next Generation Mobile Services,” the official added.

Talking to The News, Pervez Iftikhar, former CEO Universal Service Fund and telecom expert, said there was a dire need to auction available spectrum to telecoms because it would help achieve the objective of Digital Pakistan.

“The spectrum should not be auctioned to just fetch money but also to bring new technologies and creation of jobs,” Iftikhar said. “The government should bring down the base price of auction because higher price discourages players from making their business plans viable.”

He said other tough conditions such as charging KIBOR plus 3 percent on remaining 50 percent installment needed to be revisited, upfront 50 percent amount should be reduced, allowance for opening Escrow Account must be withdrawn, and measures facilitating the potential investors be taken as top priority.

“The auction of remaining spectrum at this point of time would supplement the upcoming 5G technologies in Pakistan so the government should move ahead on immediate basis and at the same time it should also soften the conditions and create a lenient atmosphere for attracting the potential buyer of the coming spectrum auctions,” the former USF head said.