Govt to complete spectrum auction process by mid-September

ISLAMABAD: The federal government is likely to complete the spectrum auction process by mid-September this year.

Sources said that the federal cabinet in the last week of this month would give approval to the policy directive for the auction of Next Generation Mobile Services (NGMS) spectrum in Pakistan and Azad Jammu & Kashmir and Gilgit Baltistan (GB) after which the Pakistan Telecommunication Authority (PTA) will issue directions for auctioning within six weeks. 

The Economic Coordination Committee (ECC) of Cabinet on Friday gave the approval to the policy directive for the auction of NGMS Spectrum in Pakistan and AJK and GB.  

Sources said that the government is optimistic to collect around $1 billion through auctioning of spectrum however if it auctions the 6.6 temporary spectrum in 1800 bands which is held by the Zong then the government can collect $200million more revenue.

Reportedly, the finance minister led committee had approved the policy draft in the last meeting and according to that PTA would auction 12.8 MHz paired spectrum in the 1,800 MHz band and 15 MHz paired spectrum in the 2,100 MHz.

The base price for 1MHz spectrum in 1,800 MHz is $31 million while the base price for 1MHz spectrum in 2,100 MHz is $29m.

Sources said that Dr Ishrat Hussain led committee in its recommendations with regard to payment terms for spectrum price/license fee in Pakistan on the “Issues of Cellular Mobile Industry for Digital Enablement” stated that Payment is allowed just in Pakistani currency however we may also allow both options for payment in instalments in US dollar at markup rate of LIBOR+ 3% per year as well as in Pak Rupees.

Markup rate of one year may be fixed at KIBOR+7 per cent in case of payments in instalments in Pakistani rupee whereas, for transactions related to licensing renewal fee, the licensee should choose payment currency at License signing stage as it would set the basis for markup calculations. Once decided, the payment currency would lock for the full payment tenor. 

The payments in domestic currency also conform to international best practices, he also stated in his recommendations.

It is pertinent to note that the Federal Cabinet constituted an Advisory Committee on the release of NGMS spectrum in Pakistan for improvement of mobile broadband services amid Covid-19.

Later, the composition and TORs of the same committee were revised and the regions of AJK and GB were included.

The committee was tasked to examine and evaluate the market assessment report and recommendations of PTA for the release of maximum NGMS Spectrum in Pakistan. 

In addition, it was also asked to examine and finalise policy directives. Besides, the mandate of the committee was to oversee the release process conducted by PTA.