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Auctioning next generation technologies

Auctioning next generation technologies

ISLAMABAD: The government is all set to fetch at least $1.6 billion into national kitty by auctioning next generation technologies (3G and 4G) by next month.

The government has set the stage for this important transaction by releasing Information Memorandum (IM) with consent of Prime Minister Nawaz Sharif which illustrates exact mode of selling scarce and important asset of the country in the shape of available spectrum with an aim to maximize revenues as well as increasing penetration of information technology into lives of common people of Pakistan at affordable rates.

According to IM, the government has decided the base price as $ 295 million for 10MHz paired spectrum in 2100 GHz band, US $ 210 million for 10MHz paired spectrum in 1800 MHz frequency band and US $ 291 million for 7.38Mhz paired spectrum in 850MHz frequency band. The last one is only reserved for the new entrant.

The IM has placed certain conditions for successful completion of this transaction as a new license will be issued to the Auction Winner for Next Generation Mobile Services, with similar terms and conditions as of previous license and additional terms and conditions/amendments will be spelled out as an addendum by PTA.

The financial transactions will be US Dollar denominated and the amount can either be paid in US Dollar or equivalent Pak Rupee.

If the Auction Winner intends to pay the remaining balance amount before the end of 05 years, it would be acceptable without any pre-payment penalty.

A late payment additional fee at a rate of 2% per month on the instalment due or part thereof from the due date till paid shall be levied on the licensee.

The License shall be suspended/terminated in case Licensee fails to make a payment.

In order to give certainty to the bidders, it was recommended that no related auction will be carried out for 18 months from the date of auction. However, for any spectrum which remains unsold from this auction, PTA retains the right to hold or dispose of the same as deemed appropriate.

The government claimed that as result of this transaction, additional GDP valued (in net present value terms) at between Pak Rupees 380 billion and Rs 1180 billion in the period up to 2020, yield additional tax revenue between Rs 23 Billion to Rs 70 billion and generate jobs up to around 900,000 in next five years.

So far the process is on track and transparency has been ensured. The Government of Pakistan, PTA and Consultants are very confident that the auction will receive strong support and participation from both the existing and prospective telecom operators.

The government will have to demonstrate transparency at all remaining stages which can go a long way in executing ambitious privatization plan in other sectors of the economy and will increase confidence of masses that such transactions can be accomplished without entering into any controversy. But a lot in this regard depends upon will of the government in order to steer the country out from the crisis mode.