Telenor, Jazz offer to pay licence renewal fee in full, but on their terms

Updated August 22, 2019

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Large fee payments will leave less money for investment in vital infrastructure, companies claim, such as towers to boost coverage.
Large fee payments will leave less money for investment in vital infrastructure, companies claim, such as towers to boost coverage.

ISLAMABAD: The two telecom operators — Telenor and Jazz — on Wednesday announced to pay the licence renewal fee.

While Jazz will be paying around $291 million, Telenor Pakistan will voluntarily pay $224.6m saying that it is to “re­affirm its commitment to the country.”

“In order to reaffirm its commitment to the country, Telenor Pakistan, while preserving its legal rights, has offered to make a substantial payment of $224.6m to the government to ensure continuity of services and preserve rights of over 44 million valued customers,” a statement released by the ­company on Wednesday said.

“Service disruptions were possible so we have paid a portion of the money to avoid that,” said a representative from Telenor, adding that the company stands by its original position to pay $291m. The $224.6m is a sign of goodwill to prevent disruption of service, they continued.

Explaining the payments, Jazz CEO Aamir Ibrahim tells Dawn that the court had asked both companies to make some sort of “token payments” two days ago to demonstrate the seriousness of their purpose in bringing forward the litigation.

“So basically the court asked us two days ago to show some commitment behind our claim and we offered to pay the entire $291 million,” he says, referring to the amount he says his company believes it owes to the government as licence renewal fee. “Tomorrow [Thursday] we will get the order on this as a financial security, then the court will hear the rest of the case” regarding the ongoing dispute between both telecom operators and the government over the amount that is owed for licence renewal.

“We are a long term player in Pakistan, have been here for 25 years and will be here for another 25,” Ibrahim says.

In its statement, Telenor says that while it’s not in agreement with the licence renewal fee, the company is clearing a major portion of the due payment. Telenor Pakistan said that it will continue to pursue a legal case to have a final resolution on the matter.

Jazz and Telenor have been involved in a running dispute with the government over the amount against which their licences to operate in Pakistan will be renewed. The operators say their original licence already carries a clause saying the licences can be renewed for the same price at which they were acquired.

The government says the price of renewal should be pegged to the price established in more recent spectrum auctions. The Pakistan Telecommu­nication Authority (PTA), the main regulator for the sector, has set the price of renewal at $450m.

Both the operators maintain that GSM licences, which were to be renewed by May 25, have been delayed by PTA and faced further time lags due to higher demands on pricing and rollout obligations, which could distort the competitive landscape in the industry.

In a letter sent to Jazz and Telenor, the PTA told both companies to clear their licence renewal payments before Aug 21 or risk possible suspension.

When contacted, PTA said it was looking into the offers made by the two operators.

Published in Dawn, August 22nd, 2019