3-G licenses: government unlikely to raise estimated Rs 75 billion

The government is unlikely to generate an estimated Rs 75 billion as non-tax revenue on account of auctioning of 3-G licenses in the current fiscal year to achieve the budget deficit target, it is learnt. Sources said that even if the government is successful in completing the required process in May 2012, it would be able to generate only $31.5 million as 15 percent earnest money of the $215 million base price.
An official said that successful bidders would be required to deposit remaining amount within 60 working days from the auction date. He added that the full amount of 3-G licenses is expected to materialise in the next fiscal year instead of ongoing fiscal year.
Pakistan Telecommunication Authority Chairman Dr Yaseen recently stated during a meeting of Senate Standing Committee on Finance that the government has decided to relax the Public Procurement Regulatory Authority (PPRA) rules with respect to hiring of consultant to speed up the process so that the sale of 3-G licenses could be completed by mid May 2012.
Explaining the process, the official said $210 million is the base price of 3-G licenses with the down payment or earnest money of $31.5 million, 15 percent of the base price, which would be deposited by the interested companies for participation in the bidding process.
The highest bidder would be given the first choice, in case of default his earnest money would be forfeited and the regulator would offer the spectrum to the next highest bidder. The successful bidder would be awarded the license after payment of 100 percent fee within 60 working days from date of auction.
A new entrant determined as a successful bidder as a result of March 2012 auction for Mobile Cellular License (defunct) would be eligible to participate. The existing cellular operators are eligible to participate in the auction and successful bidders would be offered spectrum for 15 years. Existing licenses would be modified accordingly and their license would be renewed on expiry of its existing terms for the remaining duration of the assigned spectrum.
All new prospective entrants eligible to bid and agree to start commercial operations after March 2013 may also participate in the auction. They would be issued license for 15 years which would be renewable for another term on terms & conditions, as per policy of the government.