=> KARACHI: Pakistan Telecommunication Authority (PTA -Pakistan Press Foundation (PPF)

Paksitan Press Foundtion

=> KARACHI: Pakistan Telecommunication Authority (PTA

KARACHI: Pakistan Telecommunication Authority (PTA) cancelled the license of Instaphone on Friday citing the country’s first cellular companyÂ’s failure to pay its outstanding dues.

Pakcom, the company that runs Instaphone, failed to meet the payment schedule of $291 million for getting the operating license renewed for next 15 years from 2005, the PTA said in a handout.

“They have been defaulting for a long time,” said Shahzada Alam Malik, Chairman PTA. “We didn’t want to do this since the telecommunication industry has been doing so well but they failed to meet the deadline.”

Asked if this means the only Pakistan-based cellular service will go offline, he said: “For now only the license has been cancelled.” After having been bought and sold a couple of times in last few years, Instaphone that has more than 3,29,000 customers remaining on its network has seen a gradual decrease in its popularity.

The outstanding dues amount to $120 million including $24 million as penalties and surcharge, said Mazhar Qayyum, Director Coordination at PTA.

PTA will now forward the matter to Ministry of Information Technology, which will in turn seek permission from Cabinet Division for auction of the license. But Pakcom is entitled to getting its license renewed after paying off the dues.

“This is not a joke. License can not be cancelled for non-payment of dues,” Shahid Feroz, the Chief Executive Officer of the Instaphone, said in his brief remarks. He acknowledged that part of the company might be sold off to foreign investors.

Sources tell The News that Pakcom was in negotiations for sale of its 70 percent share to South Korea Telecom when the worsening political situation in the country disrupted the talks. Pakcom sell off was imminent considering the opportunity existing in the Pakistan telecom market for larger world players, opined analyst Faisal Shaji. “Running a cellular service is a highly capital intensive business. Only companies with solid footing in this business could survive,” he said and pointed out that Arfeen Group which owns Pakcom has been looking to offload its stakes in another telecom firm Telecard, a wireless local loop and long distance international communication service provider.
Source: The News
Date:1/5/2008