‘Successful 3G licence auction will cause a positive spillover’
Pakistan’s telecom industry is set to break its sound barrier with the expected launch of the 3G band spectrum. President/CEO of the Telenor Group and Current Chairman of GSMA, Jon Fredick Baksaas sat down with The News to talk about the telecom industry and how the auction of next generation spectrum licence is the next frontier.
Q. What is the main purpose of your current visit? What’s been decided in your meetings with the President and Finance Minister Ishaq Dar?
A. Since 2005 we’ve had a fantastic journey in Pakistan so far and now the 3G opportunity is coming up. We are long-term players here and we want to engage in potential activity. Pakistan has huge potential for telecom investment and the next generation spectrum licence is of great interest to us at Telenor.
During my meeting with President Mamnoon Hussain, he appreciated Telenor group’s role in the telecommunication sector and invited us to participate in the upcoming Spectrum auction for Next Generation Mobile Services in Pakistan. We briefed the President about Telenor group and its operations here. The President was informed that Telenor is the one of the world’s major mobile operators with more than 160 million subscriptions. The Group provides services in 12 countries and additionally in 17 countries through ownership in Vimpel Com Ltd, crossed the active subscriber base of 32 million thus retaining its position of second largest mobile operator in Pakistan.
Taxation and investment related issues were discussed with the Finance Minister. We emphasized that there should be well balanced opportunities for investors as in the past in 2G auction 10 years ago. Telenor Group has been working in Pakistan for nearly a decade has invested $ 2.3 billion and also contributed in the shape of various taxes, besides providing employment to 3800 persons directly and over 25,000 persons indirectly.
Q. Why is the 3G Spectrum important for economic growth?
A. Telecom sector plays a vital role in stimulating growth in the economy and the steps being taken to auction the next generation spectrum licence will help Pakistan accelerate growth. The government need to make a proper balance between short term goals and long term ambitions; long term ambitions should be high penetration and with wider usage of internal excess in general. We believe that if the economy is to show significant by numbers, telecom will have a vital part to play. We believe that Government of Pakistan will understand our view point.
Q. What are the difficulties faced by telecom Sector? Also, what are your expectations regarding 3G?
A. I think it’s important to remember that the auction of the 2G licence a decade ago was quite well balanced as regards its ambition for getting high penetration with a rapid pace of implementation.
We believe a similarly well balanced 3G auction will help in promote usage in both education and entertainment.That means people will have a deeper and wider range of services. In particular, I want to point towards the health and Education purpose which will be tremendously valuable.
Transparency in the sector is also important for the industry, as is a level playing field.
Q. Do you think it’s the right time to auction 3G spectrum or should the government go for 4G?
A. In every market we have seen that there is always a need for technology and innovation for the next generation. It is the maturity – that always comes with each generation – that generates the potential of the next generation. Maybe for some users it can be already known but remember the high speed data of 3G has significant business potential. In the broader prospective, 3G is necessary to prove that consumers are growing before wider and bigger setting of 4G is made available.
Q. Pakistan’s ranking is improving in different international rating agencies. Do you think that it’s easy now doing business here?
A. Pakistan’s profile as an investment destination is curious for foreign direct investors and I think that the general framework of investment in Pakistan by other sectors will also be viewed by how the 3G licence process will be executed. These things are interlinked and if there is a success in one sector than the spillover will effect positively and negatively in other sectors.