While the consultant for the 5G spectrum auction has presented its report to the government team, but the Spectrum Advisory Committee (SAC) could not meet on Saturday due to ‘pen down’ strike in the courts.
However, the Ministry of IT & Telecom is confident to meet the deadline of February 15 set by the Prime Minister Shehbaz Sharif for the auction of 5G.
The key issue impeding the 5G auction was the litigation related to the 2600 megahertz band.But the decision of the Sindh High Court expected on Saturday has been delayed due to a strike by the lawyers.
A senior official of the IT ministry said that the announcement by the court is expected sometime next week.
The report by the consultant has been delayed owing to two key reasons, the court decision and the pending merger of Telenor Pakistan with the PTCL.
As it has been approved by the Competition Commission of Pakistan (CCP), there are only three players in the mobile telephony sector.
The US-based consultancy firm National Economic Research Associates Inc. (NERA) has presented its final report on the auction framework to the SAC.
While acknowledging that the auction process has already been delayed in the country, the consultant has submitted multiple modules to float 5G services in the report.
The meeting was chaired by the Federal Minister for Finance and Revenue Muhammad Aurangzeb and attended by the members including the chairman Pakistan Telecommunications Authority (PTA), the executive director of Frequency Allocation Board, and representatives from GHQ and the ISI.
The report by NERA outlined key policy recommendations for the auction, including the auction design, methodology, base price, duration, and other related terms and conditions.
The two key suggestions were that the government could either enhance the base price and earn a significant amount upfront in the auction.
The second suggestion was that low base price could lead to financial flexibility for the telecos to invest in the infrastructure and increase its services at a faster pace.
Sources in the government confided that the suggestion has highlighted that the taxes on telecom sector was 37 percent and and Rs37 bn annual collection will be available for each Rs100bn increase in the revenues of the telecom industry.
The revenue of the industry was Rs800 bn in the previous fiscal year, it will increase soon after the availability of more spectrum for the telecom sector.“
Currently the average consumption in Pakistan is 6GB per user per month but the demand is already expected to be up to 9GB – because Pakistan is a spectrum starved country higher demand cannot be met,” official of the PTA highlighted.
Under the NERA report Pakistan is offering 606 MHz of new spectrum across six major bands.
These bands are 700MHz, 1800,MHz, 2100MHz, 2300MHz, 2600MHz, and the3500 MHz. However, the best usage of 5G services is in the 2600MHz band and 190MHz is like to be offered in this band.
Currently some investor have placed the 2600 MHz band under litigation in the courts and the decision is expected in coming days.
The government is confident that the decision will be in its favour as the other party has already lost the case at several forums during the past 10 years.
Soon after the court decision and if the Spectrum is cleared from litigation the SAC will now hold internal discussions and forward the final plan to the Economic Coordination Committee (ECC) and from there it will be placed for the approval of the federal cabinet,
The procedure follows that the IT ministry was in a position to float the Policy Directive regarding the spectrum auction.Since all relevant departments have already completed their ground work the PTA will issue the ‘ Information Memorandum ‘ the following day for all the participants.
“As per the international practices the whole process takes between 2 and 3 months” a PTA official said.
The official added that the country can hold 5G spectrum auction between February 15 and March 15, only if the court decision regarding 2600MHz is announced at the earliest.
