Govt not to auction 3G, 4G licences below base price
ISLAMABAD: The government has decided not to auction any licence for the next generation technology (3G and 4G) below the base price of $295 million, according to the information memorandum released by the Pakistan Telecommunication Authority (PTA) on Tuesday.
The government is anticipating fetching a minimum of $1.6 billion through the auction of six licences for the next generation technology 3G and 4G.
The information memorandum, prepared by an international consultant, revealed that the holding of open bidding for the auction of licence will not be done in case the government receives bids within the available slots and will sell each band at the base price of $295 million.
The open bidding will be held only if the demand excesses from the supply, it said, adding that the auction will be conducted through an electronic auction software system, allowing bidders to submit bids securely over the internet.
No other hardware or software will be required in order to participate in the auction, it said.
“No lot will be sold for less than the base price. When a lot receives a bid in subsequent rounds, the minimum bid is increased over the last bid submitted by an increment,” the information memorandum revealed.
“In the case where the auction is not required due to lack of excess demand, applicants that submitted a sealed bid offer supported by a correct pre-bid deposit will be awarded the amount of spectrum stated in their sealed bid offers for the 2,100MHz band at the base price,” it said.
The information memorandum maintained that for getting spectrum in 1,800MHz band (4G), the bidder needs to win at least one licence of 3G.
The licences will be granted within 30 days of receiving the 50 percent payment of the initial spectrum fee, it said. The bidders will submit 15 percent of the total value of the bid as earnest money.
Initially, within six months, the successful winner of the 3G licences will be bound to provide 3G services to main cities of Islamabad, Karachi, Lahore, Peshawar, Quetta and another 10 cities, one of which must be located in each of the four provinces, it said.
According to the information memorandum, this condition is only for the existing five players, while the new entrant will have one year to cover these cities.
In the second phase, the existing players will have one-and-a-half years to provide coverage to 80 percent of the district headquarters. In the last phase, the licence holders will have five years to provide coverage to 90 percent of tehsil headquarters, it said.
The government has announced to auction three licences of 3G, two licences of 4G spectrums ($210 million each) and one licence of defunct Instaphone ($291 million), to any new entrant.
The licensee will pay to the authority an amount equivalent to 0.5 percent of the licensee annual gross revenue from the licensed services minus inter-operator payments and related PTA / FAB mandated payments, as annual license fee.
According to the calendar, the auction will be held on April 7.
Operators will use their best efforts to enter in necessary agreements with foreign operators in order to enable and provide international roaming. The operators must follow the PTA guidelines on international roaming, which may be issued from time-to-time, it said.
Infrastructure sharing will be considered as a matter of first priority by the operators at the time of roll out.
The Next Generation Mobile Service Award (NGMSA) Licensees are required to share infrastructure with other operators as per the PTA’s directives and guidelines, it added.