3G licence auction in Pakistan during the year 2013 has been a hot topic. As the new Government of PML-N is formed in Pakistan, it is quite obvious that their last two tenures produced business friendly results and it is expected once again from them.
Telecom sector is the one bringing huge sum of revenues to the Government in the form of Value Added Taxes. Government already know how important it is to develop Telecom sector of Pakistan. One key opportunity that the previous Governments fail to capitalise upon is the introduction of third-generation (3G) technology. Now is the best time for the Government to carry out the auction and take full advantage of the opportunities present.
The radio frequency spectrums that are still unassigned are 30 MHz in the 1900/2100 MHz band available for 3G licence while 7.38 MHz availability in the band of 800 MHz (due to Instaphone non-functionality). It implies that Government can conduct a 3G licence auction within the next 6 months and New Year 2014 will see Pakistan among 3G operating nations.
PTA could not exploit this billion-dollar opportunity in 2012 because political condition of the country was not conducive. PTA made their first effort back in January 2012 and it has to be delayed because opposition to the Government regarded this auction as a “loot sale” and then again it was out of the shadow due to contempt of court case against the Prime Minister in February.
The new Prime Minister seemed eager to carry out this auction in his term and PTA’s second attempt was in August 2012. They tried to hire a firm that will provide assistance in the bidding process and will help this auction complete by October 2012 but PTA fell short of doing its proper homework and participants of the bidding lost interest as a result.
The third and final failed attempt was made when an “Independent Advisory Group” was hired by the authorities. IAG consisted of well reputed telecom experts who were famous for their services internationally and they were to conclude the auction of 3G licence in Pakistan within a span of three months. This IAG was formed in November 2012 but this could not bear any fruit as the contracts were dissolved and this time intervention was from NAB. They pointed out that the procedure involved PPRA rules’ violation and consultants who already started working on this project are unpaid till date.
In order to get this mammoth task done, the new Government of PML-N will have to make sure that the auction process is transparent and competitive bidders should be invited to auction. PTA must have their own high level professionals rather than going for international experts to carry out the auctions for them. According to PTA Chairman, due to the delay in the auction, Government is bearing a daily loss of PKR 38 Million. Ministry of IT estimates that this auction could bring Pakistan more than 1 Billion dollars in the shape of license fee and an additional 1 Billion dollars can be raised by development of the infrastructure of the industry over a period of two years. It could create an opportunity of employment as well and 40,000 people could be attached to this industry.
Future of Telecom industry is very bright in Pakistan as the major population comprise of youth who are actively attached to internet and upcoming technologies. The youth is very interested in Smartphones but proper functionality of the Smartphones is missing due to lack of a 3G network in Pakistan. Not only connectivity will improve but the Smartphone industry and 3G together can become a major source of everyday transactions like utility bills payment, credit card transactions, online shopping as well as video conferencing on the go.