3G licence auction -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

3G licence auction

THE country’s seemingly endless journey towards acquiring 3G cellphone technology appears to have taken a small step forward with the setting up of a five-member oversight committee by the prime minister that will apparently independently monitor the 3G licence auction.

Essentially, there are three stakeholders: the federal government, the cellphone operators and end-users. The government stands to collect somewhere in the region of $1bn from the auction — though the estimates vary wildly from a few hundred million dollars to several billion. For a revenue-starved government staring at yet another record fiscal deficit, a 3G licence auction would be a welcome fillip.

Less salutary is the speculation that where vast sums are due to the government, there may be well-placed officials hoping to make a windfall through kickbacks and bribes. Cellphone operators so far have only expressed cautious interest in 3G licences, knowing that the market for expensive data packages is very small at present and that the cost of delivering such a service, from acquiring a licence to installing the necessary infrastructure, may be in the region of half a billion dollars per 3G licence.

Set against those government and business interests is a simple fact: small as the base may be for high-end data-driven mobile services at present, there is a market of premium customers who can and should have the best technology available to them. At the end of the day, cellphone operators will buy the licences because there is a business opportunity to tap customers who want to stream video or surf the net at decent speeds and are willing to pay a premium for it.

Why, then, is the market in which both sellers — the cellphone operators — and buyers (end-users hungry for faster ways of using the Internet on the go) — are available not being set up? The answer appears to lie somewhere between the incompetence, indecision and greed of the government. It is a familiar and sorry tale that the latest committee set up by the prime minister may do little to resolve; 3G technology may remain a mirage for some time yet.