PTA denies dismal response to 3G, 4G auction

• Spokesman rejects Reuters report, says demand higher than supply and auction will go through on 23rd
• Denies that no cellular mobile operator had shown interest in 4G

Pakistan’s top telecommunication authority has rubbished reports of a dismal response to the long-awaited auction of next-generation cellphone spectrum licences for which bids were submitted on Monday.

According to the Pakistan Telecommunication Authority, the response received from four existing cellular mobile operators of Pakistan was “very encouraging and satisfactory for the PTA”.

Pakistan is set to hold long-awaited auctions for 3G and 4G network licences on April 23, a step the government projects will raise $2 billion to boost the country’s foreign reserves.

A report by foreign news agency Reuters had claimed that scant interest in Monday’s bid submission process would have enabled Pakistan to raise no more than $850 million, much lower than the projected $2 billion

A spokesperson rejected the claim, saying the PTA had already issued an official statement on April 14 stating the demand was higher than the supply and the auction would go through on the scheduled date of April 23.

It is “a matter of commonsense that had there been less or even same demand from operators, there would have been no reason to go for the auction on April 23, and bidders would have the spectrum straight away,” he said.

According to the PTA, the base price for the auction of three 3G licences has been set at $295 million, and four out of five cellular mobile companies operating in Pakistan submitted bids.

“It is entirely wrong to say that no cellular mobile operator has shown interest in 4G (1800 MHz),” added the spokesperson.

The base price for the 4G LTE licence has been set at $210 million.

The Reuters report claimed Telecom companies Mobilink and Zong bid for 10 MHz. Telenor and Ufone both bid for 5 MHz.

“There are four available 3G blocks in 1800 MHz: two 10 MHz and two 5 MHz. The base price for 10 MHz block is $291 Million and 5 MHz is $146 million,” the news agency quoted a Finance Ministry official reportedly present at the process on Monday.

The PTA also rejected this claim.

According to the information memorandum issued the bid submission on Monday, no operator could bid for 5MHz, and the minimum slot for which bid could be submitted was 10 MHz.

The PTA also denied that a representative of the finance ministry was present during the bid submission.

Pakistan is the only major country in the region that still does not offer 3G services. Its neighbour, war-ravaged Afghanistan, switched to 3G services in 2012.

There are about 132 million mobile phones in use in Pakistan, a country of 180 million people, according to the Pakistan Telecommunication Authority.

Pakistan’s telecommunications market was deregulated in 2004 and foreign firms such as Etisalat have invested heavily in recent years.

The Finance Ministry said in February that Pakistan would sell both the 3G and the more advanced 4G LTE spectrum. Selling just 3G licences could raise $2 billion, and bundling them with 4G spectrum could generate between $4 billion and $5 billion, Finance Minister Ishaq Dar had estimated.

A government-commissioned study by Plum Consulting estimates the 3G spectrum auction would raise Pakistan’s gross domestic product by $8 billion and indirectly create up to 900,000 new jobs.