ISLAMABAD - Finance Minister Senator Ishaq Dar on Friday said the government would hold the auction of much-delayed 3G and 4G telecom licences simultaneously in April this year, which would generate minimum amount of $1.6 billion that might further increase on the completion of the auction process.
The previous government could not hold the auction of telecom licences in the last three years for some reasons. However, the incumbent government was making its way to hold the auction of telecom licences in April this year. Addressing a press conference along with State Minister for Information Technology Anusha Rehman, the finance minister said Prime Minister Nawaz Sharif had given approval to the final policy directive for the auction of spectrum licences. The government would hold the auction of 3G and 4G telecom licences in April 2014. The licences would be effective for 15 years.
The sources said the government was earlier planning to hold auction in March but now it has changed its plan and the auction will be held in April. According to the sources, the reason behind this delay in that the government was not fully prepared to initiate the process.
The government is expecting to generate minimum $1.6 billion through the auction of spectrum licences, which might increase as the aforesaid price was calculated at base price of auction.
The finance minister was of the view that the revenue generated from the auction of next generations might reach to two billion dollars as he announced a couple of months ago.
The PML-N government had included Rs 120 billion as non-tax revenue income on account of auction of 3G licences in the federal budget 2013-14 and wants to complete the process before the close of the current financial year on June 30, 2014. Senator Dar said the government was holding auction of 3G and 4G licences simultaneously in April this year.
Dar further said the government would start the auction of three licences of 3G (3x10 MHz licences in the 2100MHz spectrum band) at minimum base price of $295 million each. Similarly, auction of two licences of 4G (2x10MHz paired spectrum in 1800 MHz band) would be offered at base price of $210 million each.
Meanwhile, the government is offering one licence for new entry at minimum base price of $291 million.
Talking about the payment options of licences, the finance minister said the companies could make full payment or minimum 50 percent upfront payment, the remaining to be paid in five equal installments in five years with interest at LIBOR+3%.
He said the previous government of Pakistan People’s Party had been budgeting amount of 3G licences since 2011, but it failed to materialise the same. He said the incumbent government had expiated the process of holding auction of telecom licences after coming to power in June 2013. The government has formed an auction supervisory committee headed by the finance minister followed by appointment of consultant, M/s Value Partner Management Consulting Limited, for providing assistance in auction of telecom licences.
Ishaq Dar said the government had also held a consultative session with the existing mobile operators and had solicited their views in the design of the auction process. Similarly, the government had also taken into account the recent feedback received from industry analysts and experts who had participated in the debate on the subject. Dar said that in the light of the interaction with telecom companies, experts, industry analysts and consultants' advice as well as the consequential recommendations of the auction supervisory committee, Prime Minister Nawaz Sharif had approved the final policy directive for auction.