GSMA concerned at high fees for renewal of telecom licences

Published May 23, 2019
On May 25, the licences of two of the country’s largest mobile operators — Jazz and Telenor — are set to expire.  — Reuters/File
On May 25, the licences of two of the country’s largest mobile operators — Jazz and Telenor — are set to expire. — Reuters/File

KARACHI: The GSM Association (GSMA), which represents more than 750 operators and almost 400 companies including handset and device makers and software companies worldwide, raised serious concerns over the “unreasonable fees” set by the government and Pakistan Telecommunication Authority (PTA) on operators renewing mobile spectrum licences in Pakistan, which it believes pose a significant risk to the mobile connectivity of millions of citizens, according to a statement issued by the association on Wednesday.

The PTA spokesman could not be reached for comment despite repeated attempts.

On May 25, the licences of two of the country’s largest mobile operators — Jazz and Telenor — are set to expire. Under the current conditions operators are being asked to pay $450 million to renew their licences (more than double the dollar price at which operators originally acquired licences at auction in the year 2004), or discontinue operations, which would mean disconnecting millions of customers. A third operator, Zong is also due to renew its licence this year.

The statement warns that the high fees proposed for renewing these licences will slow the development of Pakistan’s digital economy and seriously affect operators’ ability to invest and support affordable services. The mobile industry association raised its concerns in a letter on Wednesday to the PTA and Frequency Allocation Board (FAB).

“It’s consumers that will lose out from imposing unfair conditions that put operators’ businesses in jeopardy,” said Brett Tarnutzer, Head of Spectrum, GSMA. “We’ve already seen the damaging consequences that high spectrum prices have on coverage and quality of service in other countries. It’s important that Pakistan doesn’t repeat these mistakes, and place gaining inflated revenues from spectrum licences above the connectivity of its citizens.”

For safeguarding the continuity of mobile services for citizens, the GSMA urged the government to extend the deadline for agreeing licence terms for all mobile network operators on a three-month rolling basis at no cost, until it can reach a decision with operators.

The GSMA also calls for the high spectrum fees to be reconsidered. High fees make it difficult for operators to provide and expand affordable services and impact investment in network infrastructure that benefits the wider economy, the statement said.

It urged the government to not focus on short-term revenue maximisation through raising spectrum fees.

It pointed to the “many taxes and fees” that operators already face, which should be considered when setting further financial obligations on them. “These high fees work against government efforts to bridge the digital divide and build the digital economy,” added Tarnutzer. “Spectrum prices and taxes should be set at a sufficiently low level that allows operators to deliver affordable services and deploy mobile broadband widely,” he added.

Published in Dawn, May 23rd, 2019


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