Pakistan Telecommunication Authority (PTA) has rejected mobile operators’ apprehensions relating to the price of mobile license renewals and passed an order while fixing the fee for license renewal at $39.5 million per MHz for frequency spectrum of 900 MHz and $29.5 million per MHz for frequency spectrum of 1800 MHz.
PTA said that it passed the order in compliance of the court order dated 21-06-2019 passed by the Islamabad High Court (IHC), where PTA was asked to make a decision and announce terms for renewal of telecom licenses.
PTA has directed operators to pay their license fee before August 21st, 2019 or their licenses will be termed expired and they will not be allowed to provide telecom services after the deadline.
Background
Mobile licenses of Telenor and Jazz were expiring on May 26th, 2019. Usually, the process for the renewal of licenses starts at least 18 months before the deadline. During the time, telecom operators, PTA consultants and other stakeholders sit and discuss various aspects of the renewal, including the price of the license.
This time around, however, PTA was unable to communicate anything to operators until the first week of May 2019 and that’s when Telenor and Jazz approached Islamabad High Court with a plea that PTA should be asked not to block their services due to expiry of licenses and that PTA should formulate the mechanism for renewal of licenses at a fair price.
Islamabad High Court, in response to the petition, ordered PTA to decide the terms for the license renewal at the earliest and that operators should be given sufficient time to get their licenses renewed.
PTA’s Order
In line with the IHC order, PTA passed a verdict relating to license renewals of Jazz and Telenor, details for which are as following:
- Fee for renewal of license shall be US$ 39.5 million per MHz for frequency spectrum of 900 MHz and US$ 29.5 million per MHz for frequency spectrum of 1800 MHz;
- Licenses will be renewed with effect from 26th May, 2019 for a period of further fifteen (15) years, on a technology-neutral basis, subject to the payment of renewal fee to be calculated in accordance with per MHz price as mentioned above
- The payment terms for the renewal fee shall be 100% upfront or 50% upfront with the remaining 50% in five (5) equal annual installments on LIBOR plus 3%.
- The payment can be made in US$ or in equivalent Pak Rupees calculated at the market exchange rate at the time of payment.
- The upfront payment, as given above, shall be paid on or before 21-08-2019. In case of non-payment of upfront fee, the license will stand expired
- The terms and conditions relating to enhanced quality of service and coverage of network shall be finalized in line with applicable regulatory practice and 2015 Policy after consultation with the licensee on or before 21-08-2019.
- In case, the licensee opts for non-renewal of its license, it shall pay a fee on pro-rata basis of the renewal fee along with all other applicable fee and other charges of the License commencing from 26-05-2019 till the date of withdrawal/vacation of the radio frequency spectrum.