Telenor, Jazz have deposited half of their licence renewal fee: PTA

September 04, 2019

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The government has demanded a sum of $450m apiece from both companies for renewal of their GSM licences. — AFP/File
The government has demanded a sum of $450m apiece from both companies for renewal of their GSM licences. — AFP/File

Pakistan Telecommunication Authority (PTA) on Wednesday announced that it had received 50 per cent payment amounting to $224.6 million and Rs35.397 billion (the equivalent of $224.6m) from cellular companies Telenor Pakistan and Pakistan Mobile Communications Limited (Jazz), respectively, against the renewal of their GSM licences.

A statement issued by the authority said that "all license renewal proceeds would be deposited in the national exchequer".

"This development will not only contribute towards the uninterrupted provision of better telecom services to the people of Pakistan but will also help in the promotion of competition and investment in the telecom sector of Pakistan," the PTA statement added.

According to a statement issued by the ministry of finance in Islamabad on Wednesday, the license renewal fee of telecom companies collected by Pakistan Telecommunication Authority (PTA) is a significant source of non-tax revenue for the federal government.

These companies will continue to operate in the country and provides seamless services to their valued customers, the press release said.

"However, the companies shall continue to pursue their legal cases, in order to have a final resolution of the mobile licences of Telenor and Jazz which expired on May 26," noted the finance ministry in its statement.

The licences, which Telenor and Jazz had acquired in 2004 through an auction at a cost of $291m or approximately Rs17 billion then, expired over two months ago on May 25. The government had demanded a sum of $450m apiece by August 21 from both companies in order for them to renew their licences. The figure apparently has been calculated using the spectrum auctions that took place in 2016 and 2017 as a benchmark.

The deadline was set after PTA and the two cellular service operators were unable to agree on a price to renew their licences.

In May, Jazz challenged the new licence price in the court where the matter is still pending.

In its response to the court, PTA has presented a stance no different from the previous one, carrying the same terms and conditions and asking operators to pay the $450m price.

On the deadline date, Telenor had extended the offer to pay $224.6 million to the government "under protest" for licence renewal purposes.

Telenor Pakistan's Chief Corporate Affairs Officer Kamal Ahmed in a statement confirmed that the company had made "a sizeable payment of $224.6 million to the government towards the renewal of its GSM license".

He declined to comment any further on the renewal of the licence as the matter remains sub judice.