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ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet is to approve policy directive for renewal of licences of cellular companies, expiring in July this year, official sources told Business Recorder.

Sharing the details, sources said, this would be in exercise of powers conferred under section 8(2) read with section 22 (3) of the Pakistan Telecommunication (Re-organization) Act 1996 and in view of the requirement set by Telecom Policy 2015 and as per provision of the Cellular Mobile Licence renewed in 2007, ie, to have a specific Policy of the Federal Government for renewal of Cellular Mobile Licence of Pakistan Mobile Communications Limited due for renewal on July 5, 2022.

In the past cellular licenses were renewed through policy directives of the Federal Government. For example, in 2019, the Federal Government issued a policy Directive for renewal of Cellular Mobile Licences of Pakistan Mobile Communications Limited (ex Warid/Jazz), Telenor Pakistan Limited (Telenor) and China Mobile Pakistan (CMPak/Zong).

The Federal Government issued the following directives for compliance by Pakistan Telecommunication Authority (PTA) and Frequency Allocation Board (Board): (i) the renewal price for the right to use frequency spectrum included in the licence being renewed shall be in accordance with recent price benchmarks of renewal 2019 and spectrum auction 2021, ie, per MHz price for frequency spectrum in 900 MHz and 1800 MHz shall be $ 39.5 million and $ 31 million, respectively;(ii) the licence will be renewed with same quantity of spectrum, ie, 13.6 MHz (7.6 MHz) in 900 MHz & 6 MHz in 1800 MHz 2) to generate an expected revenue of $ 486.2 million; (iii) the tenure of the renewed licence shall continue to be 15 years;(iv) payment terms shall be 100% upfront or 50% upfront with remaining 50% on five equal annual installments on LIBOR+3%; (v) the renewal fee shall be paid in US Dollars with the option to pay in Pak Rupee,

which will be calculated at the market exchange rate applicable at the time of payment, as per precedence of earlier cellular licence issuance/renewal; (vi) the licence renewed under this policy directive shall be technology neutral in line with existing GoP policies;(vii) provisions for Spectrum Trading/Sharing as per the approved regulatory framework for such sharing/trading will be incorporated in the renewed licence by PTA; (viii) other Terms and Conditions including coverage obligations, Quality of Service(QoS), etc. will be at par with Cellular Mobile License issued/renewed in 2021 by the PTA, with no separate performance bank guarantee against rollout obligations; and (ix) payment (100% or 50% upfront as the case maybe) shall be due on or before July 5, 2022.

Copyright Business Recorder, 2022

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