Pemra rebuts report on DTH licensing process | Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

Pemra rebuts report on DTH licensing process

Pakistan Press Foundation

ISLAMABAD: Pakistan Electronic Media Regulatory Authority (Pemra) has issued a rebuttal to The News story published on Monday, titled, “Why is acting chairman Pemra in such a hurry?”

A statement issued here on Monday said that Pemra believes that the said story was published without going into the merits of the whole issue and without even taking Authority’s point of view. The following facts are, therefore, submitted for highlighting in same manner and magnitude for clarity of public and the reporter.

Pemra is an Authority/ board established under Section 3 of Pemra Ordinance 2002 as amended by the Pemra (Amendment) Act 2007. The prime function of the Authority is to regulate the establishment and operation of all broadcast media and distribution services in Pakistan. All the agendas especially pertaining to policy matters are presented in meetings of the Authority and the decisions are made after detailed deliberation, arguments and outcome of the majority voting on each agenda item.

Pemra initiated the process for grant of 2 DTH licences through competitive bidding process and called Expression of Interests (EoIs) in this regard on May 17, 2003. M/s Cross Currents (Pvt) Limited, a sister concern of Geo Group and M/s ARY Communication (Pvt) Limited were decided to be successful bidders with offered licence fee of Rs250 million.

The companies were requested time and again to deposit the licence fee; however, they failed to do so. Even the Authority, while acceding to their requests split the total amount of licensee fee into eight equal instalments. However, the companies did not honour the decision and post-dated cheques submitted by them were bounced back. Consequently, the Authority in its 47th meeting held on February 28, 2008, decided not to further process their cases and return the amount deposited by both of the companies after deduction of earnest money.

Both applicant companies, challenged the decision of the Authority with Sindh High Court. However, the petitions filed by the companies were dismissed in favour of Pemra in March, 2013, after a long legal battle of about five years.

Pakistan was among the first countries to envisage the technological advancement and launch the Direct to Home (DTH) service in region 13 year ago, however, due to some of the reasons mentioned above, the process was delayed. India being the closest neighbouring country encashing the opportunity, launched its DTH services in 2006 and captured a reasonable grey market with an estimate of two to three million illegal Indian DTH subscriber in Pakistan. Thus causing, according to some estimates, $150-200 millions annual loss to the national exchequer. It is also reported that some Pakistani satellite TV channels are available on this illegal platform and enjoying untaxable earnings on account of subscription.

Pemra is very enthusiastic to provide a legal platform to general public and curb the menace of illegal Indian DTH.

The Authority in this regard hired the consultancy services of a Switzerland-based International Consultant M/s Digital Strategy Pte. Limited, by floating Request for Proposals (RFP) through national dailies on 30-10-2014 through an open and transparent manner. The consultant was required to submit his report comprising overview of the electronic media business market, suggesting number of DTH licences to be awarded, bidding/ auctioning procedure, licence terms and conditions etc within 105 days after signing the contract on 24-03-2015.

As per terms and conditions of the contract, the consultant submitted his final report to the Authority in its 105th meeting held on August 11, 2015. The Authority in exercise of powers conferred under section 4, 18 and 19 (1) of the Pemra Ordinance 2002 as amended by the Pemra (Amendment) Act 2007 read with all other enabling provisions approved the Pemra Eligibility Criteria & Bidding/ Auctioning Procedure for DTH Distribution Service Licensing Regulations 2015 for DTH licensing. The number of licences and the base price is proposed by the consultant after in-depth study of international and regional markets. The base price of the licence will provide a starting point of auctioning; however, the actual price of the licences will be determined by the applicant companies. All the process has been carried out under lawful authority and in a very transparent manner.

While approving the recommendations of the consultant, the Authority decided to initiate the licensing process for DTH service. Accordingly, Eligibility Criteria and Bidding/ Auctioning procedure for award of licences was notified in the form of Gazette (SRO 1390 (2015)/ Ex.Gaz) on September 8, 2015.

An advertisement inviting applications for award of DTH licences was published in newspapers on September 10, 2015, while the Information Memorandum (IM) containing eligibility criteria, licence terms and condition, application forms etc was uploaded on Pemra website. All the prospective applicants were free to ask queries regarding the DTH licensing process. The queries were answered on daily basis and uploaded on Pemra website which are still available.

Achieving a milestone to the DTH Licensing Project, a pre-bid conference was held on October 9, 2015, at Pemra HQs, Islamabad. Which was the final opportunity for the prospective applicants to clarify their queries. Twenty-five national and international prospective applicant companies participated in the pre-bid conference. The participants appreciated Pemra’s efforts and steps taken so far for introducing the DTH Digital Satellite Distribution Service in Pakistan which was awaited since long.

It was highlighted by Pemra as well as by the potential applicants that there are hundreds of thousands of illegal Indian DTH subscribers in Pakistan, causing hundreds of millions of dollars of annual loss to the national exchequer; ironically, the delay in launch of Pakistani DTH services is helping this illegal market to flourish. Pemra is taking serious actions against companies and platforms involved in this illegal business activity and the licensing of Pakistani DTH is step towards achievement of the goal.

It is expected that successful launch of DTH services in Pakistan will result in investment about $150 million, about 12,000 direct jobs will be created and a handsome amount of revenue will be generated for the regulator and the federal government.

The last date for submission of applicants for DTH licences was November 6, 2015, and 10 applications have been received in this regard. The bidding/ auctioning for grant of DTH licences is scheduled to be held on December 7, 2015.

M/s Cross Current (Pvt) Limited & M/s ARY Communication (Pvt) Limited filed an appeal against decision of the Sindh High Court with the Supreme Court and later filed a stay application with plea that the instant licensing regime for DTH initiated by Pemra is unlawful as the Authority is working without a permanent Chairman. However, the Supreme Court passed a short order with regard to subject C.M.A No. 5482/2015, reproduced as under:

“No case for stay is made out. Dismissed accordingly. However, any award granted shall be subject to final decision of the case.”

Thus allowing the Authority to continue its DTH licensing process.

The Ministry of Information, Broadcasting & National Heritage had advised Pemra to withhold DTH Licensing Process till the permanent chairman assumes the charge. However, in response, the ministry has been informed about progress of the licensing process which is at its final stage and the legal complications which may arise due to withholding of the process. Moreover, the decision to initiate the licensing process for the DTH was made by the Authority, not by the acting chairman/ executive member. The licensing process is underway as per the timeline approved by the Authority.

M/s Independent Media Corporation (Pvt) Limited “Geo Group” has filed another writ petition with Islamabad High Court with a prayer to stop the aforementioned DTH licensing process which is not yet decided.

Pemra believes in transparency, openness, fairness and ensuring availability of level-playing field to all its stakeholders. The instant DTH licensing process is being held in fair and transparent manner under a lawful authority which is duly endorsed by the Supreme Court of Pakistan, concludes the Pemra statement.

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