ISLAMABAD, Oct 23: The Pakistan Telecommunication Authority (PTA) on Saturday allowed M/s Paktel to switch to GSM (global system of mobile phone) operation in Pakistan from AMPS (analogue mobile phone system) by renewing its licence for another 15 years after the operator agreed to pay a fee of $291 million.

An agreement to this effect was also signed between the PTA and Paktel here at the headquarters of the authority by PTA Chairman Shahzada Alam Malik and Paktel CEO Xavier Rocoplan.

While extending Paktel's licence period, the PTA also granted the company relaxation in terms of time period for making payment of initial 50 per cent ($145 million) of the total amount as up-front fee in instalments.

Spread over the next three years, this time period has been approved by the Economic Coordination Committee (ECC), PTA chairman told reporters.

"It is a good day for both of us as all the issues have been settled amicably," he said.

With the entry of a third GSM operator, the competition between the existing operators would eventually help in further reducing the mobile phone tariff, he said.

Xavier Rocoplan said the necessary installations carried out by his company started functioning from Saturday but the services would be available in the market next week.

He described the signing of the agreement as the end of a long process for a new "mobile adventure" in Pakistan.

This deal, Rocoplan said, would give more choice to the people and more benefit to the overall mobile industry in the country.

About the present AMPS, he said, the subscribers would still be able to use the old service, while creative methods would be employed especially in the tariff structure to attract new customers in the GSM market.

In reply to a question, PTA chairman said, all cellular phone operators whose license term was expiring will have to pay $291 million as a renewal fees. However the authority is ready to give similar relaxation of time period to them, he said.

About M/s Instaphone, also providing AMPS services, he said the company was in the phase of shifting to a new technology called CDMA (code division multiple access) system after renewing its license.