Auction for remaining 4G: government may face Rs 40 billion shortfall under non-tax revenue

The government is likely to face significant shortfall of about Rs 40 billion under the head of non-tax revenue, as the auction advisory committee has projected the auction of the remaining 4G with a base of around $300 million by end-May, 2017. Official sources revealed toBusiness Recorder that Prime Minister who is the Minister in-charge of Ministry of Information Technology and Telecommunication may issue policy directives for auction latest by Wednesday.
The government has decided to go for auction of the last available spectrum of single block of 10MHz in 1800MHz in the current financial year due to resource constraints with the Federal Board of Revenue (FBR) suffering a massive shortfall of Rs 161 billion during July-February (2016-17); and the process is likely to be completed by end-May, official sources added.
During the month of February 2017, shortfall in FBR collection was Rs 23.6 billion. The FBR collected Rs 1,915 billion during July-February (2016-17) against target of Rs 2,076 billion, reflecting a shortfall of Rs 161 billion. It is expected that this shortfall would increase during the remaining four months of the current fiscal year.
Prime Minister Nawaz Sharif had constituted an Advisory Committee for auction of this spectrum which is headed by Minster of State for Information Technology and Telecommunication Anusha Rahman while Special Assistants to PM for Law, Secretary IT, Secretary Finance, Secretary Law, Chairman Pakistan Telecommunication Authority (PTA), Executive Director Frequency Allocation Board (FAB) and Member telecom are the members of this committee.
Member Telecom was also appointed as "Committee Secretary".
The Advisory committee for the auction of unsold Next Generation Mobile Services (NGMS) spectrum (4G) met last Thursday to take final decision on the spectrum auction. The IT Minister chaired the Advisory committee meeting for the auction and reviewed the comparative study of benchmarking from local and regional telecom markets. Fearing poor response from the upcoming spectrum auction (4G), the Advisory committee had decided to undertake a comparative study of benchmarking from local and regional telecom markets. The Chairman PTA-led sub-committee analyzed the regional and global markets, which have gone through spectrum auction in the recent past. The sub-committee submitted its report to the main spectrum Advisory committee for consideration and further necessary action.
During the last two auctions, the government conducted market surveys through consultants but did not go for comparative study of benchmark from local and regional telecom markets. The government had a consultant study in hand as per the PTA officials but uncertainty led the government to go for further market analysis.
The government had budgeted Rs 65 billion from the auction of two licenses of 3G and 4G for 2015-16. However, later government revised it downward to Rs 45 billion, while deciding to go for single frequency spectrum auction in the 850 MHz band with base price of $395 million. One license (4G) remained unsold and the government clearly over budgeted it at Rs 75 billion for the current financial year from its auction.