Ministry set to auction 3G, 4G licences despite more roadblocks


ISLAMABAD: The Senate sub-committee on information technology on Thursday upheld the recommendations of its main body when it threw more roadblocks in the upcoming sale process of 3G and 4G licences. Nonetheless, the recommendations will not stop the auction process to be held on April 23. The Ministry of IT maintained that the auction was being held after adopted best practices. Last week, the Senate standing committee on information technology had recommended that the Pakistan Telecommunication Authority (PTA) should stop the auction of 3G and 4G licences scheduled for April 23. It argued all PTA activities/actions were illegal, including the sale of 3G /4G licences, until its (PTA) composition was complete.

While the PTA works with its chairman and member finance, the seat of member compliance and enforcement is vacant. The Cabinet Division had advertised the post in June 2013.

The sub-committee was formed to investigate legal standing of activities/actions of the telecom regulatory authority with a seat at the decision-making level vacant.

On Thursday, when the PTA and the ministry of law and justice tried to convince the sub-committee that the authority could function/operate with only two members, Senators Zahid Khan and Faisal Raza Abidi seemed to have already made up their minds to disagree.

“We uphold the decision of the Lahore High Court (LHC) of December 2013 which declared the appointment of bureaucrats as members of the PTA illegal,” said the chairman of the sub-committee, Senator Zahid Khan.

“We are not trying to unnecessarily stop the auction. We just want to ensure fairness of the auction process,” added Faisal Raza Abidi.

Senators Khan and Abidi not only objected to the composition of the PTA but also raised more objections to the auction process to ensure transparency.

They argued that the government should have waited a year or more to auction 4G licences which would fetch another $2 billion.

“Had the government marketed the launch of only third generation services aggressively, it could have easily earned $3 billion instead of the $1.2 billion,” said Senator Abidi, elaborating how it was senseless to sell both old and new technologies together.

He also recommended that mobile companies which owed dues to the government should not be allowed to participate in the auction until all their liabilities were cleared.

He argued that it also did not make sense that the government-owned Ufone be allowed to bid.

“We need assurance that the government will not enter into the auction and pay significant amount of money to purchase its own products,” the senator said.

However, Secretary Law Barrister Zafarullah Khan, who has the additional charge of PTA member compliance and enforcement, explained that under the PTA rules the authority can function with just two members.

He supported his argument by referring to Section 10 of PTA Rules 1996, which stated: “No act or proceeding of the Authority shall be invalid by reason only of the existence of a vacancy in, or a defect in the constitution.”

The secretary explained how he was given the additional charge following the Supreme Court orders earlier this year.

“The applicants for the position have been interviewed. A qualified individual will be hired for the position soon,” he said.

In reply to questions after the meeting, Chairman PTA Dr Ismail Shah explained how Ufone was not a government-owned organisation.

“The government has some shares in the Emirates-owned PTCL that owns Ufone,” said Dr Shah, adding: “There are no liabilities.”

Responding to a question after the meeting, State Minister for Information Technology Anusha Rehman elaborated why two new foreign telecom companies – Turkcell and Saudi Telecom – had backed out of the bidding.

“The ministry of IT offered them to launch 4G services in the country. The two new interested contenders demanded that the 3G and 4G licences should only be given to them and to local companies at least a year later in order to establish their set-up. The demand seemed unfair to the already operational mobile companies in Pakistan with 73 per cent voice penetration in the country.”