Telecom

Published on May 7th, 2019 | by Abdullah Sulehri

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Telecom License Renewal Policy And Associated Risks





Pakistan’s telecommunication industry form to be a major source of Foreign Direct Investments. In current circumstances, we are in dire need of more investments due to the devaluation of PKR. The government must refrain from taking any action which refrains foreign investors from investing in Pakistan.

The investors will only consider their long-term profitability
while investing in a country and obviously will avoid investing if the circumstances
are unfavourable. It is government’s responsibility to make the environment conducive
for foreign investors to invest in the Pakistani economy. Unfortunately, instead
of attracting more businesses, government is creating undue difficulties for present
telecommunication companies. The issue being discussed here is regarding the
renewal of the contract and allotment of additional spectrum to the
telecommunication industry of Pakistan.

The license renewal of two mobile operators Telenor Pakistan and Jazz is due to expire in May 2019. The government hasn’t announced any policy guidelines in this regard, which is resulting in uncertainty in the telecommunication industry.

The Prime Minister of Islamic Republic of Pakistan Imran Khan
has constituted a technical committee for the evaluation of benchmarks for the
license renewal of 3 mobile operators and award of the additional spectrum. The
expected revenue to be generate by government is $1-2 billion from the whole
process.

The task assigned to the technical committee is to evaluate
benchmarks, different models, legal and financial aspects and submit the
recommendations to the committee of ministers, which comprises on Finance and
IT ministers. A final draft will be submitted to the federal cabinet for
approval, after approval from the committee of ministers.

The technical committee is headed by Secretary Ministry of
Information Technology and Telecommunication (MoITT) while officials from
Pakistan Telecommunication Authority (PTA), Ministry of Finance, Law and
Justice and Frequency Allocation Board (FAB) are the members of the body.

Due to the delay in license renewal policy formulation, telecom
operators will have insufficient time to make decisions regarding future
investments and business plans. In ideal cases the renewal decision should be
finalized 18-24 months prior to license expiry to ensure service and business
continuity.

Details regarding telecom licensees, issuance, renewal, and expiry dates are following:

The licenses of Telenor Pakistan and Jazz is due to expire in
May 2019, and Zong’s license is due to expire in October 2019. All three of
them have requested for renewal but the decision on renewal is still
pending. Timely completion of the license renewal process will definitely
help to maintain certainty in the industry. The companies need time to take
such decisions as heavy investments are involved. They also need to setup infrastructure
and equipment

Clause 8.11 of Telecommunications Policy 2015 states that “Renewal of license and associated spectrum at the end of a license period will be as per the policy of the government. PTA will in timely manner initiate the process in accordance with terms and conditions of the license.”

An efficient completion of the renewal process will definitely
help maintaining certainty in the industry. It entirely depends on the
formulation of licensing framework by the telecom authority. Moreover, 3G/ 4G spectrums
will also be awarded to various operators which is another crucial issue.

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About the Author

is a Chartered Certified Accountant by profession, loves gadgets, technology, sleeping, movies, food, and poetry. He is a tech-blogger and can be reached at abdullah (at) sulehri (dot) com



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