$1.1 billion raised from 3G, 4G auction

Published April 23, 2014
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- File Photo
- File Photo
Chairman of Pakistan Telecommunication Authority (PTA) Ismail Shah (R) presents an online 3G and 4G licence auction of next-generation telecommunications in Islamabad. -AFP Photo
Chairman of Pakistan Telecommunication Authority (PTA) Ismail Shah (R) presents an online 3G and 4G licence auction of next-generation telecommunications in Islamabad. -AFP Photo
A woman reads a brochure of 3G and 4G of next-generation telecommunications during an online auction in Islamabad. -AFP Photo
A woman reads a brochure of 3G and 4G of next-generation telecommunications during an online auction in Islamabad. -AFP Photo

ISLAMABAD: Pakistan raised $903 million in its first auction for 3G mobile phone networks on Wednesday, as well as $210 million for the more advanced 4G spectrum, with four foreign-owned companies emerging as winners from the long-anticipated bidding process.

The four winners of the 3G auction were Russian-owned Mobilink, Chinese-controlled Zong, Norway's Telenor, and Ufone - a company jointly owned by the Pakistan government and the United Arab Emirates' Etisalat.

As for the 4G spectrum, the sole winner was Zong, according to the Pakistan Telecommunication Authority (PTA).

Warid Telecom Pakistan, another company operating in Pakistan, did not make any bids.

Ismail Shah, the PTA head, announced the results to reporters after the auction, which lasted all day.

The total opening price of the four lots of 3G licenses was $885 million while there was an increase of $5.9 million in Lot D and $11.92 million in Lot A at the end of the three round auction.

At the end of the auction's first round there was no increase in the bid price whereas there was an increase of $5.9 million in the bid price of Lot D at the end of the second round. Moreover, an increase of $5.9 million and $5.92 million in the bid price of Lot A had taken place by the end of the third and fourth rounds of the auction process.

Ismail Shah had earlier told Dawn that the first round of the license auction process had concluded with the four competing companies agreeing to the base price.

He later said that the bidding companies had three rounds of waiver available at their disposable which had been utilised in the previous three rounds (five - seven).

The addition of another lot of the 3G spectrum licenses was made in accordance to a stipulation in the information memorandum for the spectrum auction.

A view of the PTA website displaying the round-wise results of the auction process.
A view of the PTA website displaying the round-wise results of the auction process.

The PTA committee is authorised to increase the bid price by one to three per cent per round.

The base price for a 3G licence is $295 million and for a 4G licence it’s $210m.

Mobile phone companies can bid for one 10MHz bandwidth licence or the entire spectrum, comprising three 10MHz licences (a total bandwidth of 30MHz).

The four companies participating in the bidding had earlier logged on to the software of the Pakistan Telecommunications Authority (PTA) for the process.

The introduction of 3G and 4G spectrum in the telecom sector is expected to revolutionise the way subscribers stay connected.

4G provides even faster speeds and ultra-broadband services, putting data-intensive services such as online gaming, high definition mobile TV and video conferencing within the reach of the average consumer.


Also read: 3G, 4G may triple internet cost for users


For consumers, the auction will not immediately translate into the advent of 3G connectivity on their mobile phones. In fact, the timeframe agreed upon between the PTA and mobile operators envisions 3G roll out within six months of the auction.

In the first phase, services will be available in Islamabad, Karachi, Lahore, Peshawar and Quetta and later on in other cities from each of the four provinces.

The second phase, which will start a year and a half after the auction, envisions the expansion of 3G services to about 80 more cities. In the third phase, which will begin about four years from now, 90 per cent of all tehsil headquarters will have access to 3G services.

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