A DECADE after the world became familiar with 3G and at a time that many parts of the world are moving on to 4G, the Pakistani government has finally decided to go ahead with the auctioning of 3G mobile network licences — and offered up a couple of 4G licences as well. It may appear to be — and, in many ways, is — a fiendishly complex and technical issue, but what is being auctioned and how can it be reasonably simplified? On offer for the consumer: speed. With smartphone sales accelerating and internet connectivity a must-have for increasing swathes of the population, 3G and 4G offer the consumer the much-needed prospect of quicker access to the online world. On offer for the government: a budgetary boost as hundreds of millions of dollars, perhaps more, will pour into the national coffers at a time when foreign currency and budgetary pressures are acute. On offer for the mobile phone operators (five at present, with a sixth that may enter the mix in the same overall auction): providing a premium service that enhances their brand and attracts a higher-paying customer base.

If the gains are relatively easy to spell out, the dangers and risk are somewhat more obscure — though their eventual impact will be clear. For example, the government’s determination to squeeze as much money out of the network operators during the auction process has ramifications for the end consumer: the more a company has to pay for its licence, the higher it will charge consumers to recover its outlay. But there are ramifications for the industry too: by offering only three 3G licences and two 4G licences, the government is again hoping to drive up the bids by the five existing operators. But what happens to the companies that do not win a licence in this initial auction? In fact, by encouraging competition through scarcity, the government may inadvertently be encouraging collusion between the operators. Transparency and fairness, then, are a much more complicated affair than the simple mechanics of an auction suggest. The 3G/4G auction will be the first big test of the government’s mantra of doing business fairly and transparently but with an eye on the clock too. It remains to be seen if it can deliver.