ISLAMABAD, Feb 18: Pakistan Telecommunication Authority (PTA) and prospective bidders on Wednesday failed to agree on minimum investment level to set up two new cellular mobile telephone companies in the country.

The bidders were insisting to fix a proper floor price before commencing process to grant two more cellular mobile phone licenses. The bidding will be held on April 14, 2004.

Chairman PTA, Maj-Gen (Retd) Shahzada Alam Malik presided over the "Investors Conference" organized by the authority here at a local hotel. Realizing the interest of the bidders he suggested to set the floor price at $100 million.

This created a lot of clamour among the investors who tried their level best to convince the chairman to announce fixing of the floor price at $25 million. However, no final decision in this regard was made till the end.

They also asked PTA to hold open bidding for the grant of two more licences instead of two stage bidding process, which PTA was following. The investors conference was attended by senior executives and chairmen of the 33 renowned national and international telecom investors.

The purpose of the conference was to exchange views and information and remove misconception about the policy and procedure of the investors, who submitted their Expressions of Interest (EoIs) for the award of two additional mobile phone licences.

The chairman also assured the investors that no manipulative tactics would be utilized to grant licences to a particular group or that massive disqualifications would take place before final bidding to provide open field to some "favourite" group.

The chairman also clarified that only two licenses would be awarded in the process and in case, if the second highest bidder failed to match the bid of the highest bidder, only one licence would be awarded.

The earlier date of March 18 for the bidding was also changed on persistent demand of majority of the investors, who had asked for some more time to make necessary preparations and fulfil the requisite formalities.

PTA chairman said that keeping in view the geographical location of the country, having population of about 149 million and high economic growth as well as prevailing conducive environment, there was tremendous potential for the growth and development of mobile phone industry.

He also urged the investors to derive benefit from this opportunity as the demand of the people for new mobile phone connections could not be fulfilled by the existing four operators.

He said available potential for the penetration of cellular phone in the market could easily absorb 3 to 4 million mobile phone connections per year. The existing mobile density of 2.3 per cent was quite low compared with other countries of the region.

The chairman said the mobile phone customer base could easily increase from 3 to 4 per cent per year and mobile phone density should have been more than 10 per cent in view of the existing market potential.

He assured the investors that PTA would extend full cooperation in the smooth functioning of their business and would try to remove bottlenecks that might hinder their business plans while reasonable time would also be given to fulfil roll out obligations particularly to tehsil levels.

The government would also provide full protection to their investment and no company would be discriminated against, he said. The chairman said PTA was also taking steps to persuade the authorities concerned to reduce the activation charges for expanding the use of mobile phones and improving socio-economic lot of the common man.

He dispelled the impression harboured by certain investors about the frequent change of cellular mobile phone policy and assured that there would be no change in the policy for five years.

He recounted the steps taken by the authority in the interest of the industry as well as the consumers including simplification of licensing procedures, reduction in royalty and curtailment of type approval formalities on certain items.

He said the PTA was all set to provide a level-playing field to the telecom operators and that the new licences would be awarded to the highest bidders in a transparent and non-discriminatory manner.

The chairman assured the participants that PTA would take full cognizance of the observations made by the investors about the cellular mobile phone policy, allocation of frequency spectrum and policy and procedure of the bidding process and said that the authority would provide them comprehensive replies in writing after due consideration.