Govt unlikely to raise $1bn as telcos demand low rates

Published September 9, 2021
The issue of service quality has not been addressed by the authorities. — AFP/File
The issue of service quality has not been addressed by the authorities. — AFP/File

ISLAMABAD: The government’s plan to raise up to $1 billion through auction of additional spectrum on Sept 16 is likely to be adversely affected because two out of the four Cellular Mobile Operators (CMOs) are reluctant to participate actively demanding low rates, Dawn has learnt from sources in the telecom sector.

The sources said the senior managements of the two CMOs have expressed their concerns that spectrum auction at high rates would increase financial cost and overburden the mobile companies.

They have been suggesting since the spectrum cannot be misused, therefore, it should rather be given at a low very rate so that the CMOs can invest in infrastructure development.

Meanwhile, Finance Minister Shaukat Tarin on Wednesday chaired a meeting that was attended by several cabinet member including IT and Telecom Minister Syed Amin ul Haq, Commerce Adviser Abdul Razak Dawood, Minister for Industries and Production to discuss the upcoming spectrum auction.

Spectrum auction to be held on 16th

Samiullah Tariq, head of research at Pakistan Kuwait Investment Company (Pvt) Ltd, said that there has to be a balanced approach as the government needs revenues and dollars to increase the country’s foreign currency reserves.

He added that the medium and the long-term approach demands cheap and fast internet to almost all the 220 million population if we have to roll out 5G by 2023 and increase the export of IT services to $5bn.

He suggested that for achieving these targets the CMOs should have financial cushion for investments in the infrastructure and implement the growth plan.

Even a senior official of the Pakistan Telecommunication Authority (PTA) acknowledged that with less than 10 days to the auction almost negligible queries were being received from the CMOs.

While it seems that some of the CMOs were not excited over the upcoming auction, some of the analysts have second opinion too that the additional spectrum was the right of the consumers as it will improve the quality of service.

Atif Zafar, analyst at Topline, said that it was not only about raising revenues through the auction, but the country was offering a huge market of 200 million consumers to the telcos.

Possibly after receiving such reports, even the IT minister had recently held a meeting with top managements of the CMOs asking them to actively participate in the upcoming auction.

At the same time the minister reminded the CMOs that the quality of both the voice transfer as well as broadband services were quite low, and by acquiring additional spectrum the quality service telephony and the internet would improve significantly.

However, the issue of service quality has not been addressed by the authorities and the public complaints against the telecom companies have received a lukewarm response from the PTA.

Even the official website of PTA has no mention of fines imposed on telecom companies regarding poor service quality, such as call drops and slow broadband, which causes additional charges to the consumers.

The ministry of IT cannot streamline its affairs as long as the public complaints related to the quality of service are addressed.

Published in Dawn, September 9th, 2021

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