New int’l telecom operators likely to participate in auction
ISLAMABAD: The participation of new international telecom operators in the auction for 3G/4G spectrum is highly likely, which will result in tough competition among the operators besides generating good revenue.
A delegation of Turkish mobile phone operator, Turk Cell, was on a visit to Pakistan to study its business case regarding the spectrum auction while Saudi Telecom was also expected to visit next week to assess market condition here, well-placed sources told Business Recorder on Thursday.
They said that the Turk Cell had given a green signal to participate in the auction for 3G/4G spectrum after getting satisfactory response to its queries raised in its separate meetings on Thursday with State Minister for IT Anusha Rahman and Pakistan Telecommunication Authority (PTA) Chairman Dr Syed Ismail Shah.
In a bid to generate more revenue and attract foreign investment in the country through tough competition among telecom companies, the government has launched a plan to invite new foreign telecom players to participate in the auction for next generation services spectrum.
PTA has already published Information Memorandum or IM for next generation license auction, which is likely to be held on April 7, 2014. Base price for one 3G license 2100 MHz is set at $ 295 million while the reserve price for 4G license 1800 MHz band is set at $ 210 million for the duration of 15 years. In case a new operator wins the 3G and/or 4G license then it will also have to buy a GSM license worth $ 291 million from 850 MHz. In order to win 4G spectrum in 1800 MHz band, the bidder must win at least one 3G license.
The license auction will comprise of two phases. In the first phase, operators will have to submit sealed bids – which must not be less than the base prices of licenses to qualify for the second phase. Second and final phase will involve simultaneous multiple round ascending (SMRA) auction to determine the winner of spectrum. Second round of bidding will only happen if there are more operators than the licenses available for auction.
PTA has asked the stakeholders to submit their input on IM before March 10, 2014. Operators will be allowed till March 19 to inquire about anything related to bidding. After assessing, PTA will announce the names of qualified operators by March 28th, 2014. According to IM, operators will have to spread their 3G services in Islamabad, Karachi, Lahore, Peshawar, Quetta and 10 more cities – one of which must be in each province – within six months. Down the line, they will have to provide coverage to 80 percent of district headquarters within 18 months. The IM says that operators will have to ensure national and international roaming services for its 3G and 4G services.
State Minister for IT Anusha Rahman while talking to Business Recorder said that the representatives of Turk Cell had shown keen interest in the forthcoming spectrum auction. In this regard, they would study the market dynamics during their stay in the country and make recommendations to their principals in Turkey, she added. She further said the Turk Cell delegation was assured that the government and the regulator, PTA, would take necessary measures to provide a level playing field to new entrants in Pakistan’s telecom sector.
The Turkish delegation also held a meeting with the PTA Chairman, during which the former was briefed about the fast paced growth witnessed in the telecommunication sector of Pakistan in the recent years. The PTA Chairman told the delegation that due to investor-friendly policies of the government, and fair regulatory regime adopted by the telecom regulator, Pakistan’s telecom sector had been able to achieve unprecedented growth in the recent years.