ISLAMABAD: Pakistan has entered into latest next generation mobile services known as 3G and 4G by selling five lots of spectrum out of total six. One license of 4G was obtained by China Mobile (ZONG) while another remained unsold.
In this auction process, Pakistan Telecommunication Authority (PTA) as a regulator had sold four licenses of 3G technology and one 4G by generating revenues to the tune of Rs 111 billion against the desired target of Rs 120 billion envisaged in the budget 2013-14.
However, the credit rating agency, Moody says that the revenue generated through 3G and 4G auctions was less than their expectations. But experts on Information Technology always insist that launching of technology is much more important than generating revenues if one takes long term view of promoting this important sector for the country.
In the past, the PPP led regime had envisaged Rs 50 billion, then Rs 70 billion and finally Rs 79 billion during the last three years of its rule but it failed to move ahead as every time serious questions were raised on transparency of the process. Now two remaining licenses will be sold including one 4G technology and another on account of Instaphone and both these licenses can bring Rs 50 billion even at the existing base price.
The government will have to bring fresh Information Memorandum (IM) for auctioning these two licenses and the base price might be enhanced and other changes in conditions might be introduced.
With launching of 3G and 4G spectrum auction in Pakistan, the Gross Domestic Product (GDP) will go up by 1 to 1.8 percent at least over next few years. It was the only sector which can kick-start economic activities and can boost GDP growth over the next few years. Pakistan requires such push-up on economic front when the sluggish activities in the wake of energy outages and security concerns are playing havoc with the prospects to turnaround the economy.
“Pakistan can come out from vicious cycle of 3 to 4 percent of GDP after selling out 3G and 4G in the country and the growth will cross 5 percent of GDP,” said economists.
The cellular companies, according to experts, will have to invest at least $500 million each by all four winning parties so total investment along with license fee would cross $3 billion mark.
According to government estimates, the latest auction will provide 900,000 new job opportunities in telecom sectors over the medium term in next three years.
China Mobile, which won both 3G and 4G spectrum in recent auction, will invest $1 billion more in the country in order to modernize its network, placing research and development framework and ensuring skilled workforce.
Mobilink, which had already invested $3.9 billion in Pakistan, was now intended to increase its investment up to $4.7 billion in months ahead. The Telenor will also increase its investment beyond $2.5 billion. The cellular companies had already invested on improving their networks to run 3G and more investment is on cards in months and years ahead.
