MoIT directed to accelerate auction of 3G and LDI license


After the president and prime minister directed the ministry of finance to expedite auction of 3G spectrum and long distance international (LDI) license to China Mobile subsidiary, Zong, the ministry of information technology (MoIT) has been asked to submit recommendations within next two days to decide the issues.
Recommendations approved: An official source said the meeting was held on the directives of the president and prime minister, who expressed concern over the delay in resolving lingering issues, which have held back further investment in the sector for more than three years. The meeting of the cabinet committee on telecom was chaired by Finance Minister Dr Abdul Hafeez Shaikh. It approved recommendations on the auction of the wireless local loop (WLL) broadband spectrum and its policy directives submitted by the MoIT.
The committee will meet early next week to finally decide on issues, the source added. Pakistan had initially planned 3G spectrum auction in 2007 but was delayed due to change in the government. The PPP government has failed to come up with a policy for the auction of 3G spectrum and WLL broadband spectrum for the last three years. This has stagnated the telecom sector that was one of the most vibrant sectors after the implementation of the telecom deregulation policy in 2001.
Great expectations: Considering precarious revenue collection, the government is looking for other avenues for revenue in which telecom sector is most prospective as the auction of three 3G licenses is estimated to generate close to $800 million. A similar amount is outstanding against UAE owned Etisalat due to the non resolution of the transfer of land titles to PTCL. The company was purchased by Etisalat in 2005 after giving a bid of $2.5 billion but has held back payment of $800 million under all properties of PTCL were transferred in its name. As Pakistani economic managers are expected to negotiate a new bail out package with the International Monetary Fund (IMF) on September 23-25 in Washington, the government wants to resolve all the lingering issues in the revenue, power and telecom sectors, which the Fund considers were hampering in achieving the true potential of the country, the source said. Pakistan has made available 30 MHz spectrum for 3G auction, which it intends to auction to three players. The incumbent operators want the auction limited to the existing five cellular companies while the government is also thinking of awarding at least one 3G license to international players. There are also concerns in the industry over the small size 10 MHz of the spectrum lots which they say have played an important role in the failure of 3G service in India. In Europe and Japan 15 to 20 MHz are provided for 3G licenses.
Further action: A statement issued by the ministry of finance said the meeting discussed different issues regarding auction of 3G spectrum, LDI license to Zong, WLL broadband spectrum auction and transfer of PTCL properties to Etisalat. The meeting centered around pros and cons regarding auction of 3G spectrum and after due deliberation, it was decided to form a subcommittee which will consider details of the matter.


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