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ISLAMABAD: The first-ever cellular spectrum auction for Next Generation Mobile Services (NGMS) in Azad Jammu and Kashmir (AJ&K) and Gilgit-Baltistan (GB) was completed on Tuesday, which generated revenue of $30.5 million.

Based on the base prices of $0.87 million per MHz, the government had estimated to generate $40.02 million in case of auctioning 100 percent of 46 MHz spectrum; however, around 37.9 percent spectrum remained unsold. The major mobile operator i.e. Jazz failed to win a single MHz spectrum in the auction.

The Pakistan Telecommunication Authority (PTA) conducted the spectrum auction for NGMS in AJ&K and GB, where two cellular mobile operators, CMPak (Zong) and PMCL (Jazz) participated in the electronic auction for 1800 MHz band.

Spectrum was offered to the cellular mobile operators as per following design: (a)1800 MHz Band (total 16 MHz Spectrum was made available) (1) 10 MHz- 2x blocks of 5 MHz each, (2) 6 MHz-5 x blocks of 1.2 MHz each, (b) 2100 MHz band (Total 30 MHz spectrum was made available) (1) 6x blocks of 5 MHz each.

After evaluation of sealed bids and demand of operators for particular blocks, clock auction format was followed for 10 MHz in 1800 MHz band: as for remaining blocks, demand had not exceeded the supply. Bidding started in series of rounds for 10 MHz.

In each round, bidders place the bids at the announced prices for a number of spectrum blocks in product 1 (10 MHz block) with increment of one to three percent of previous round price. The electronic auction went up to 18 rounds and was concluded by declaring Zong as the winner of 10 MHz (2 blocks of 5 MHz) in 1800 MHz band against the price of $14.398 million.

Zong bagged 11.2 MHz in the 1800 MHz band for a cumulative auction winning price of $15.442 million. In 1800 MHz band; PTML (Ufone), Telenor and CMPAK (Zong) had submitted demand for 1.2 MHz each, which was not part of the electronic auction.

Bidding started in series of rounds for 10 MHz and Jazz and Zong were in the run for the spectrum. The spectrum sold in 1800 MHz band is 85 percent of the total offered spectrum in the said band for AJ&K and GB. Furthermore, Telenor, Ufone, and Zong have also won 1.2 MHz in 1800 MHz band. Telenor Pakistan-the single bidder, is declared winner in 2100 MHz band for a spectrum of 15 MHz against the set base price.

The spectrum sold in 2100 MHz band is 50 percent of the total offered spectrum in the said band. The total revenue generated from this spectrum auction process for the AJ&K and GB stands at approximately $30.3 million, said the PTA spokesperson.

The PTA completed the auction process with assistance of internationally-reputed consultant, JV Telconet/Frontier Economics who was onboard since April 2021, and conducted thorough consultation with the cellular industry and other stakeholders. The Government of Pakistan constituted Auction Advisory Committee in October 2020 under the chairmanship of the finance minister.

Policy directive was issued on 11th August 2021 under which, the PTA initiated the process for a fair and transparent spectrum auction process ensuring consumer interests.

The addition of this spectrum will help cellular mobile operators (CMOs) to provide better data and voice services in the two regions currently being focused for promotion of tourism, said Amer Shehzad, DG Licensing PTA.

The PTA had invited applications from cellular operators for 16 MHz paired spectrum in the 1800 MHz band and 30 MHz paired in the 2100 MHz band for technology-neutral NGMS in the AJ&K and the GB.

Telenor Pakistan spokesperson told Business Recorder that they acquired additional spectrum in the AJ&K and GB through the spectrum auction, adding 16.2 MHz to its overall spectrum holdings in the region. This will enable Telenor Pakistan to further expand and develop its already strong footprint in the region through its voice and data services.

This additional spectrum will help in providing customers with greater access to connectivity services in the region along with enhanced digital connectivity to enable health, education, commerce, agriculture, citizen services, government services communication, and financial services.

"This spectrum auction was much needed to fulfil the growing connectivity needs of AJK and GB. As the market leader in the region, this additional spectrum will allow us to further enhance our network experience in existing areas and bring more people in the folds of digital inclusion," said Irfan Wahab Khan, CEO Telenor, Pakistan.

"We thoroughly assessed spectrum auction opportunities with respect to its long-term benefits to our customers based on price and related terms and conditions."

Jazz spokesperson said that Jazz's participation in AJK and GB spectrum auction process ensured a healthy competition, while the government was able to generate significant value out of it. The auction for 5 Mhz block saw multiple rounds.

Beyond that mark it did not present the value for us to efficiently serve our customers, he added. Jazz has sufficient spectrum available in AJ&K and GB to meet the demands for existing service offerings, while allowing it to keep pace with technological changes and evolving customers' needs.

Jazz will continue to invest in broadband infrastructure across Pakistan and the AJK and GB. Jazz has a long-term commitment to Pakistan, which is evident from the level of investment that currently stands at US$ 9.6 billion since its inception, he added.

Copyright Business Recorder, 2021

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