The Board of Investment (BoI) has dispatched the details of 3G and 4G Spectrum licences to their Honorary Investment Counsellors in foreign countries to share them with international companies, an official of BoI told Business Recorder.
The official said that Pakistan Telecommunication Authority (PTA) had approached BoI and requested for campaign to auction new technology in international market. He said, "In local market, few operators are available who are financially capable to participate in the bidding". To make bidding more competitive, the government wishes to invite potential foreign investors, he said.
It has been reported that certain quarters are opposing the move on the presumption that government wants to favour one company. The matter has also been discussed threadbare in the Senate on which members demanded to get the whole 3G feasibility matter vetted from Senate Standing Committee.
While talking to Business Recorder exclusively, Senator Haroon said, "The objective of the entire exercise is to award licence to a favourite cellular company and get kickbacks through this deal." He said that the PPP government put an estimate of $850 million as foreign inflows on account of auctioning of 3G licences in the federal budget. "If the government does not increase the base price of 3G licences from $210 million to more than $290 million, then it may have to face a reduction in the estimated foreign inflows that would definitely affect both fiscal and current account deficit of the current financial year 2011-12", Akhtar said.
"We want transparency in the whole process. We can not let any body make money from kickbacks", he maintained. Haroon added that earlier the 2G licences were awarded under the base price of $290 million. "As 3G technology is more advanced than that of 2G, why has the government decided to award the 3G licences at a lower price"? Haroon queried.
He said, " The members of the Upper House have already disapproved the government''s plan to auction new telecom licences, including 3G/4G, through bidding with base price of $210 million and $155 million respectively". The third-generation mobile, or 3G mobile technology, has already led to a big scandal in India, centering on corruption by the Telecom Minister. The scandal involved officials in the government of India illegally undercharging e-companies for frequency allocation licences, which they would then use to create 2G subscriptions for cell phones. The shortfall between the money collected and the money which the law mandated to be collected is estimated to be $33.56 billion by Comptroller and Auditor General of India based on 3G auction prices.
The PTA has set 29th March 2012 as the date for the country''s often-delayed 3G auction and is expecting 10 to 15 potential investors in the initial bidding processes. The 3G licences will vary from 8 to 15 years in duration, and there will be a $31.5 million deposit for any bidders.
It is known that if any of the current mobile networks, like Mobilink, Telenor, Warid, etc, are awarded the 3G licence, they would be able to offer services immediately. However, new entrants are not allowed into the market until March 2013 as per an agreement not to offer any new radio spectrum till that date when the government sold a 26 percent stake in the state-owned PTA in 2006 to Etisalat.
Total number of cellular subscribers in Pakistan has crossed the 111 million milestone and there are multiple broadband options available to consumers. Also, there are more than 1.5 million broad band consumers in the country with the industry doubling year to year.
During Musharraf''s era in the year 2007, the government was planning to introduce the 3G technology in Pakistan and that is regarded as the appropriate time for introducing this technology as the whole world was shifting from 2G to 3 G but due to some political constraints at that time, the government postponed the program.
The present government in the year 2009 decided to introduce the 3G technology but delayed it for unknown reasons. Now in the year 2012, when the whole world is heading towards introduction of 4G, Pakistan is aiming for 3G, an analyst stated to BR. He said that the base price for auctioning of licences, including 3G/4G technology, should not be less than $300 million.