Renewal and acquisition of spectrum: Telenor Pakistan BoD asked to approve full payment

Telenor Group has recommended to Board of Directors (BoD) of M/s Telenor Pakistan to approve full payment for renewal and acquisition of spectrum within the current fiscal year. This was indicated by Petter Borre Furberg, Chairman BoD of Telenor Pakistan and Executive Vice President of Telenor Group, in a letter to Minister for Finance Asad Umar and Minister for Information Technology and Telecommunication Dr Khalid Maqbool Siddiqui.
Since its inception in 2004, Telenore Pakistan has invested more than $3.5 billion in spectrum and infrastructure to set up a network spanning in excess of 11,000 towers and retail network of more than 200,000 agents. "Our contribution to the exchequer exceeds $2.5 billion and through our operations, we have aided the government through various initiatives, for example, biometric verification, BIRBS, etc".
In 2014, the government of Pakistan renewed the licence of the state-owned entity, Ufone, at $291 million through interest-free payment installment in order to maintain a level playing field, Telenor Group has recommended that upcoming licence of Telenor Pakistan and other operators be renewed under the same terms and conditions.
"This is particularly important given the fact that 2014-2018 local current depreciation increases the effective cost to the renewing parties ie renewal at $291 million will generate additional Rs10 billion for exchequer based on today's exchange rate," he added.
According to the Telenor Group, licence renewal and new spectrum must be treated differently as stipulated in 2004 as well as 2015 Telecom policies. Therefore, the application of any other criteria but the precedent of most recent renewal of Ufone licence in 2014 to arrive at a renewal price will completely distort the competitive landscape. This will increase uncertainty in the telecom sector, leading to the pursuit of potential legal remedies in the court of law.
The company believes that its proposal provides higher value for the government and the industry, bearing in mind the following potential benefits (i) maintaining a level playing field in highly competitive telecom industry (ii) higher investors confidence leading to more investments in spectrum acquisition, that will, in turn, improve network quality (iii) reduced risk of a possible litigation process, which will save and improve the probability of payments within the current fiscal year (iv) achievement of government revenue targets through a sale of the additional spectrum.
"By ensuring a level playing field, the government will encourage the telecom industry to accelerate investments. For our part, we would propose to the BoD of Telenor Pakistan to increase our spectrum portfolio by 2x6.2 MHz in operationally compatible spectrum within the current fiscal year, provided that PTA makes it available," he continued.
Petter Borre Furberg further stated that along with increase in portfolio, Telenor Group has recommended to the BoD of Telenor Pakistan to support payment for this additional spectrum as per benchmarks established in 2016 and 2017. The Telenor Group would recommend to the BoD of Telenor Pakistan to approve full payment for the renewal and acquisition of spectrum within the current fiscal.
"We strongly believe that Telenor Group's proposal is consistent with the conditions of our licence, current policies, rules and regulations and will achieve a desirable balance between the interests of the renewing parties, as well as maximizing contribution to the exchequer," he further stated.
On Monday, CEO Telenor Pakistan Ifran Wahab Khan also called on Advisor to Prime Minister Abdul Razak Dawood and apprised him about the issues being faced by the company.