ISLAMABAD
The government has yet to start the process of holding the second round sale of 3G/4G licenses as planned in the budget 2014-2015, depriving the national kitty from Rs 56 billion.
The government had not announced the process of holding the auction of 3G/4G licenses despite passing of almost three quarters (July-March) of the ongoing fiscal year. The incumbent government in the budget 2014-2015 had kept Rs 56 billion in non-tax revenue in the budget, which was supposed to be fetched through the selling process of licenses.
The expected failure in holding the auction of the telecom licenses might increase the problems of the economic managers of the country in restricting the budget deficit within the level agreed with the International Monetary Fund (IMF). The target of the budget deficit for the current financial year is 4.9 per cent of the GDP.
The Asian Development Bank (ADB) in its latest outlook 2015 has projected that budget deficit would increase more than the budgeted target due to the additional expenditures on defence, lower revenue collection and second round of sale of 3G/4G licenses has not yet taken place.
Pakistan’s budget deficit has been recorded at Rs 651.8 billion (2.2 percent of the GDP) during first half (July-December) of the ongoing financial year (FY2014-15). The country’s expenditures had been recorded at Rs 2400.9 billion as against the revenues of Rs 1749.1 billion, leaving deficit at Rs 651.8 billion (2.2 percent of the GDP) during July-December of FY2015. The government had restricted the budget deficit at 2.2 percent during first half of FY2015.
It is worth mentioning here that the government has two licenses, 4G and 2G, to offer for the auction during ongoing financial year 2014-15. One licence of 4G with a base price of $210 million and another licence exclusively kept for a new entrant (2G) with a base price of $291 million. Therefore, the government is expecting to generate approximately Rs 56 billion through this process.
The government in April 2014 held the first ever auction in the country, as the Pakistan Telecommunication Authority (PTA) had offered three bands for the 3G spectrum - with a total available frequency of 30MHz - and two bands for the 4G spectrum. Out of the four competitors participating in the auction, only Zong managed to secure licences for both 3G and 4G spectrums; the other three - Mobilink, Telenor and Ufone - secured only 3G licences.
 The $1.112 billion (Rs 111 billion) that the country has earned from the sale is just $17 million or 1.6pc higher than the reserve price of $1.095 billion for these licences.
The Nation tried to contact spokesperson of the Finance Ministry Rana Asad Amin to take his comment on the issue, but he did not respond.