PTA begins additional spectrum sale process

Published August 7, 2021
The new spectrum will be applicable for enhancing telephony and broadband services in Pakistan only. — AFP/File
The new spectrum will be applicable for enhancing telephony and broadband services in Pakistan only. — AFP/File

ISLAMABAD: The Pakistan Telecommunication Authority (PTA) has started the process for the sale of additional spectrum to mobile phone companies — an exercise expected to bring the government around $1 billion from the auction.

The new spectrum will be applicable for enhancing telephony and broadband services in Pakistan only as these frequencies will be applicable for the Azad Jammu & Kashmir (AJK) and Gilgit-Baltistan (GB).

The PTA has issued the Information Memorandum (IM) to all the four mobile operators in country, offering each megahertz (MHz) in the 1,800 MHz band at $31 million and one mega hertz in 2,100 MHz band at $29m.

The PTA is offering 12.8 MHz spectrum in the 1,800 MHz band and 15 MHz in 2,100 MHz band.

At the current base price the government is likely to get a minimum of $832m from the total sale of 27.8 MHz, if there is no competition among the four mobile operators.

Talking to Dawn, a senior executive of a mobile company said the government was offering three blocks of five megahertz each for the 2,100 MHz band, but there were four mobile operators.

Auction is expected to fetch $1bn

“Besides the operators would want to have two blocks due to long-term preparations for the launch of 5G in Pakistan but the offer was less than the demand and a large chunk of finances would be invested in obtaining the spectrum only,” the executive added.

The IM issued by the PTA has given the timelines for the Spectrum Auction, with all the interested parties having to submit their proposals to the authority within 21 days (starting from August 5).

This will be followed by negotiations and discussions for one week between the applicants (mobile operators) and the authorities which include the PTA, consultant and other authorised officials.

The mobile operators will have to submit sealed bids within 35 days (mid-September). The whole process is expected to be completed in three months.

The IM has also introduced an upper cap for the 1,800 MHz band on the mobile companies to restrict abuse of dominant position or giving advantage to any company with stronger financial position.

The limits on obtaining the spectrum of 1,800 MHz band has been set after taking into account each mobile company’s existing spectrum.

The PTA has highlighted that Jazz will be able to bid on up to 5.2 MHz spectrum only as the company was currently using 24.8 MHz spectrum in the 1,800 MHz band while Zong will be able to bid on up to 7.4 MHz as it was currently using 22.6 MHz spectrum. Telenor and Ufone are not constrained by this spectrum cap as each of them currently holds less than 10 MHz.

While, excluding AJK and the GB, Jazz was at the top in cellular market of Pakistan with 38 per cent share, followed by Telenor with 27pc of the market, Zong 22pc and Ufone 13pc. The duration of the license will be 15 years.

The government has also offered new investors to participate in the auction process in a bid to invite potential “New Entrant” in the cellular mobile market of the country.

Meanwhile, to enhance the connectivity and optimise the existing telecom infrastructure as well as discourage abuse of dominant position in the market by any mobile operator, the PTA has advised the mobile companies to share their existing and future infrastructure with other operators if requested by the other operator.

The PTA highlighted that infrastructure to be shared will be the mobile towers etc and mobile companies can enter into commercial arrangements with each other for active sharing, after getting formal approval framework the PTA. Meanwhile, a separate policy and offer is expected for the AJK and GB in near future by the PTA.

Published in Dawn, August 7th, 2021

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