3rd Generation gap
By: Shahzada Irfan Ahmed
The fate of 3G licensing in the country seems to be still unclear, as the differences among stakeholders are becoming severer every day. There is difference of opinion over the auction process to be adopted, timing of the launch, hiring of consultants for auction and the proposed terms and conditions the licensees will have to adhere to and other issues.
Originally, there were plans to issue of 3G licenses during the Musharraf’s era but they were abandoned for various reasons. One of these reasons was that mobile telephony was in its infancy at that time and there was a long way to go before demand for value-added services. People were content with the voice and text services they could avail and focus was on increasing the number of subscribers.
Today, there are no two opinions about the need for and benefits of having 3G services in the country. Telecommunication sector experts believe the delay in the launch is harming the economy and hindering growth of certain sectors totally dependent on this technology.
So, the questions are as to what is hindering the process and what the contentious issues are? But before looking for answers, one needs to define what 3G technology is and why its licensing has become such a big issue in the election year.
Going by definition, 3G or 3rd Generation is a category that defines standards for mobile telecommunications. Services supported by it include wide-area wireless voice telephone, video calls, transmission of wireless data, mobile TV, video conferencing, telemedicine, e-learning, video on demand and location based services.
Besides, it enhances the quality of voice sand text services already available in the country and helps a lot in minimising disconnections. Download speeds are extremely fast which makes data transfer a pleasant experience for subscribers. Technically speaking, 3G allows simultaneous use of speech and data services and higher data rates up to 14.0 Mbit/s on the downlink and 5.8 Mbit/s on the uplink.
Coming back to the licensing issue, the leading service providers are eyeing the launch and the cell phone companies are planning to develop new products in its aftermath. They are optimistic about the prospects but unclear whether the auction will be held in the near future or not.
The general perception is that some elements are trying to delay the process on purpose, at least till the new government takes over. With a couple of months left in the completion of the PPP government’s tenure, the desperation of Finance Minsiter Hafeez Sheikh is also becoming intense with every passing day.
An official privy to high-level meetings held in this regard says the PPP government wants the auction process to be completed in January and expects the successful bidders to pay the license money in two months. This is strange as such huge payments are supposed to be paid in periods spread over years, he says, adding the cell phone companies who bought licenses for $291 million had to pay the amount in 15 years.
This gives an impression that the incumbent government is hurrying through the process to get kickbacks and extract full amount from licensees before the end of its tenure. The licensing exercise is likely to fetch revenues worth around $1 billion in the form of license fee and a similar amount in the form of investment in 3G friendly infrastructural development. “Will a licensee be willing to deposit full amount knowing a change of guards is on the cards?”
Naveed Siraj, Country Manager Intel Pakistan, hopes the launch of 3G services will bring innovation in education sector throughout the country as a large number of students will be able to access the education lessons with the help of smartphones and tablets. They will also have support in the form of high download speeds which make live video streaming a great experience. He says Intel has developed quality educational content and its devices are available to support innovative e-learning trends in the country, especially when 3G services are available.
He says: “In our view, any shift to new technology which enables citizens to communicate with each other faster, with greater ease, with more clarity, with pervasive access to content is a prudent investment.” The long-term benefits will far outweigh initial capital investments in 3G infrastructure as it puts the country on a course to greater economic prosperity, he adds.
On the timing of the launch, Naveed Siraj says although 3G is no longer a new technology in the world, Pakistan lags behind in terms of the availability of high-performance mobile broadband services. The mobile market is reaching a saturation point, and operators are keen to launch 3G in order to increase service revenues. Therefore, it’s a massive step forward for mobile phones in Pakistan.
The benefits, he says, include better access to information, faster data interchange and multimedia services through mobile phones. He says the new 3G spectrum will enable companies to tap more revenue from fast-growing data services and reduce regulatory costs under a new licensing regime.
The benefits are no doubt many, but the bickering among Pakistan Telecommunication Authority (PTA) officials and refusal of two members to endorse the chairman’s decision is the biggest hurdle. The latest dispute was about the appointment of consultants by the chairman at an exorbitant fee of $700,000. The consultants were supposed to prepare the whole auction plan and ensure the country gets the best possible price for the licenses.
PTA Members Dr Khawar Siddique Khokhar and Nasrul Karim Ghaznavi have objected to the consultants’ selection process, saying the National Accountability Bureau (NAB) was not taken on board. They have been pressurised to cooperate but they have put up resistance and so far adamant to endorse the chairman’s decision. The Supreme Court of Pakistan and the NAB have also come to the rescue and directed the authorities involved to clarify their positions.
Imran Qureshi, Director Carrier and Government Relations, wi-tribe, an Internet Service Provider (ISP), says 3G is the need of the day as consumers’ interest is fast moving towards data transfer. “We have seen exponential rise in the use of social media tools such as facebook, youtube, twitter etc. This use will further rise on the back of better download and data transfer speeds with the advent of technology.” Imran adds that on-the-go internet and mobile connectivity will promote the overall culture and benefit other sectors as well.
All the benefits notwithstanding, the time does not seem to be ripe. In these conditions, it is quite likely that the auction of 3G license will be deferred once again. Even if it is held against all odds, it is quite likely the level of investors’ interest is not as high as it was during the auction of cellular services license in the Musharraf’s era. This will ultimately result in sale of licenses at a price less than desired.