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PTA delays 3G licensing auction indefinitely

Published Apr 26, 2012 03:08pm

An Apple Iphone is displayed by a user. The PTA has delayed its auction for 3G licences in Pakistan.
An Apple Iphone is displayed by a user. The PTA has delayed its auction for 3G licences in Pakistan. – File photo by Reuters

DUBAI: The auction to sell third-generation (3G) mobile telecoms licences in Pakistan has been indefinitely delayed, telecom operators told Reuters on Thursday.

The auction, if completed, would have raised a minimum of 630 million dollars for the country.

The auction of three 3G licences had been scheduled to be held on March 29, according to a January government memorandum, and would be open to the five existing mobile operators plus potential new entrants.

Potential bidders were due to submit expressions of interest from January 21, but they have yet not been invited to do so, Walid Irshaid, chief executive of Pakistan Telecommunication Co (PTCL), told Reuters.

“All the dates announced earlier have been put on hold, what the new date is we don’t know,” said Irshaid. “The first step was not even taken yet. No official notification has been received by us or any other operator.”

Former monopoly PTCL, an affiliate of United Arab Emirates’ Etisalat, is the third-ranked mobile operator, with a 19 per cent market share, behind Norway’s Telenor and Mobilink, a unit of Egypt’s Orascom Telecom, which respectively claim 25 and 30 per cent of Pakistan’s 116 million mobile subscribers.

A spokesman for Telenor said the government had postponed the auction until indefinitely until it hires an international consultant to supervise the process.

The Pakistan Telecommunication Authority, which is running the auction, was not immediately available for comment.

The government, which is still owed $800 million by Etisalat as part of the UAE firm’s $2.6-billion acquisition of a 26 per cent stake in PTCL in 2006, expects to raise at least $630 million from the 3G auction, having set a base price of $210 million for each licence.

That would have raised much-needed money for Pakistan’s government, which battling doubled-digit inflation and a sharply widening trade deficit, while foreign investment into the country has also plunged.

Pakistan’s two other mobile operators are Warid Telecom – a joint venture between Abu Dhabi Group and SingTel Group – and China Mobile Communication Cooperation’s Zong.