3-G licenses: PPRA rules to be relaxed to ensure Rs 75 billion revenue

The government has decided to relax Public Procurement Regulatory Authority (PPRA) rules to ensure materialisation of budgeted inflow of Rs 75 billion on account of 3-G licenses by May 2012 to reduce the budget deficit for the current fiscal year, said Pakistan Telecommunication Authority Chairman Dr Yaseen on Tuesday.
The government estimated non-tax revenue of Rs 75 billion from the sale of 3-G licenses in the current fiscal year and failure to generate revenue on this account would escalate budget deficit for the current fiscal year. The country's economic managers are facing immense difficulty to contain fiscal deficit at 4.7 per cent for the current fiscal year due to the improbability of materialisation of estimated inflows on account of Coalition Support Fund (CSF) and rising expenditure on account of subsidies for power sector and other Public Sector Enterprises.
Dr Yaseen during a briefing to the Senate Standing Committee on Cabinet Secretariat here on Tuesday held with Senator Shahid Hassan Bugti in the chair, stated that PPRA rules are being relaxed to shorten the time required for hiring consultants for early completion of the auction of 3-G licenses. He said that the government has decided to relax the rules to reduce the fiscal deficit and allayed the concerns of members with regard to transparency and fetching maximum base price.
He said the regulator would monitor the market to ensure that existing players do not form a cartel to bring down the base price of the license and assured the members that the government has been constantly in touch with the best known internationally recognised consultant to get maximum base price for 3-G licenses.
Yaseen said opening of air corridor and faxed lines in telecommunication sector has fetched over $10 billion investment in the country with $5 billion in the form of Foreign Direct Investment (FDI). According to the Chairman PTA, telecom sector has been paying an average of Rs 110 billion annually to the government in taxes and paid Rs 117 billion last year.
He said the telecom sector as the only documented sector in the country could be of great help in bringing other non-documented sectors into the legal economy. Yaseen said initiatives such as branchless branches for money transfers could help in enhanced taxes for the government through documentation of the economy. He absolved himself of responsibility of some concerns voiced by the members about telecom sector.
The members suggested that PTA fix a ceiling on account of service charges by regulators so as to protect the consumers, however Yaseen spoke in defence of telecom operators saying he could not ask operators to fix service charges. Yaseen added that setting a ceiling price is impossible because the cost of operators has gone up due to increase in power tariff.
In reply to a question he said that Pakistan telecom industry has made remarkable progress within a few years and is providing affordable services to people and progress in technology, especially in telecommunication, is also having a positive impact on social and economic life in the country.