3G Mobile Auction – three failed attempts of PTA
Karachi (Wednesday, November 14, 2012) – An event happening for the first time may pass off as an accident. Call it a coincidence the second time. But when it happens thrice there is an incontestable pattern on hand.
Just when people thought that the government was seemingly done with the ehearsals for auctioning 3G licenses, the pre-auction process appears to be in the doldrums again.
Latest one heard from PTA went like this: the hiring of the consultant (for designing and overseeing the auction process) would be finalised by October 5, and a Letter of Intent would be issued forthwith. Formal contract would be awarded by October 15. Within a month, the consultant would hammer out details of the auction afresh, and issue the auctions the revised Information Memorandum by November 15.
The awaited consultant never arrived, because the hiring process couldn move beyond the EoI phase, despite a lapse of several months.
News reports highlight the disappointment of the FinMin officials whose hopes of containing the fiscal deficit were pinned on the Rs79 billion (expected to be generated from this auction) already accounted for in the FY13 budgetary estimates.
The Auction Supervisory Committee, headed by the Finance Minister, has decided to change course now, perhaps hoping to finish this business within the confines of the ongoing fiscal year.
Reportedly, the ASC has recommended the PTA to quit stargazing for a consultant, and rather hire an “Independent Advisory Group” (IAG) to do the job. Fresh public advertisements by PTA indicate that wheels are rolling again.
Titled “Short Term Advisory Opportunity”, the public ad informs that the telecom watchdog is setting up the IAG to facilitate the auction process. The IAG will function for three months and would comprise experts and consultants of international repute.
The positions of spectrum valuation advisor, spectrum auction design advisor, auctions software advisor, and spectrum regulatory policy advisor can be applied against by sending in professional resumes to the Chairman PTA. The process will close this week.
Given the concerned authorities prior, clumsy handling of the pre-auction process and their diverse administrative faux pas, not much room is left for even cautious optimism about the auction actually following through this time.
Already, news reports reek of bickering and intrigues within PTA, which does not help matters at all. Whatever the outcome, authorities are already four years late into introducing the 3G network technology in Pakistan.
Consequently, Pakistan lags behind in mobile broadband when much of the developed and developing countries have migrated to 3G (and now looking towards 4G and LTE) networks. A thorough investigation into the circumstances and causes behind the multiple delays should be conducted.
Meanwhile, Chairman PTA has been quoting a daily loss of Rs38 million due to 3G auction delays. The Chairman should substantiate this figure, because it seems understated.
Moreover, he should do something about it. After all he is the lead executor for federal government in this transaction. More importantly, he must inform the public as to why another multi-million dollar auction has remained stalled under his watch.
Earlier this year, PTA had published the IM for auctioning over 600MHz of additional, freed up spectrum in the 1.9GHz and 3.1GHz frequency bands. The target market was the existing operators in the fixed and wireless local loop segments, and class-value-added services (e.g. data & voice VAS, vehicle tracking, payphone, video conferencing, etc.).
The auction was scheduled to be held on May 3, but it seems there is no intent to restart this auction process.
Leasing out this valuable spectrum could not only facilitate operators expansion, but also raise significant revenues for the exchequer. Official figures from the PTA IM reveal that the minimum (one-time) license fees from this auction are over 117 million dollars (summation of base prices of all blocks on sale). Annual spectrum fees add up to 0.685 million dollars per year.
Despite passage of several days, PTAs spokesperson was unable to provide official response to BR Researchs specific email queries regarding the three auctions of 3G spectrum, Instaphone license and the local loop spectrum.