3G / 4G License Award Ceremony on May 22nd: PTA

Pakistan Telecommunication Authority has confirmed ProPakistani that recently auctioned 3G and 4G licenses will be awarded to four telecom operators in a license award ceremony on May 22nd, 2014.

PTA said that Ufone, Mobilink and Telenor will be awarded with 3G licenses while Zong will be given 3G and 4G licenses.

This license award ceremony and NOC from PTA is being awaited as they are mandatory for telecom operators to commercially launch 3G services in the country.

License award ceremony was subject to advance (or full) payment of spectrum that telecom companies had won during the auction. This ceremony was initially planned for May 10th but was later rescheduled for May 17th, 2014 as mobile phone companies didn’t deposit the upfront payment for the spectrum.

Initial or up front payment was lingered because FBR suddenly asked PTA to collect 10% advance tax in addition to basic license fee. This took industry by surprise as there was no mention of withholding tax collection in 3G and 4G licenses’ IM.

After several rounds of talks, cellular companies somehow agreed to pay 10% of upfront payment as withholding tax.

It merits mentioning here that withholding tax will ultimately get settled by FBR – and will be repaid to the operators or will be levelled against other taxes on operators by the end of fiscal year – but telcos were not willing to pay millions of dollars in addition to what they had to pay as spectrum fee.

Now since the tax issue has been settled, it has been decided that award ceremony will be held on May 22nd 2014.

It merits mentioning here that all operators, except Zong, are offering free 3G services in at least seven cities of the country. These operators are all set to commercially launch the services as soon as licenses and NOC is granted to them from Pakistan Telecommunication Authority.

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