Spectrum Demand in 3G / 4G Auction is More than Supply: Chairman PTA

First round of 3G and 4G license auction in Pakistan gathered more demand from operators than the supply available in the allocated spectrum, confirmed us Dr. Ismail Shah, Chairman Pakistan Telecommunication Authority.

Yesterday four local operators submitted their bids for the first phase of 3G and 4G auction.

Dr. Ismail told me that demand for spectrum is more than the supply and hence auction will be concluded in the second round on April 23rd, 2014 where operators will bid for their desired spectrum.

It maybe recalled that Pakistan has allocated 30Mhz of 3G spectrum from 2100Mhz band while another 20Mhz of 4G spectrum from 1800Mhz band.

Two lots of 4G spectrum are tied with 10 Mhz of 3G spectrums (meaning that two operators opting for 10Mhz 3G licenses must have to buy 4G licenses as well), while other two lots of 5Mhz from 2100 Mhz band will be auctioned through bidding.

A total of four lots of 3G and 4G licenses will be auctioned, where two 4G spectrums are tied with 10 Mhz of 3G spectrums (meaning that two operators opting for 10Mhz 3G licenses must have to buy 4G licenses as well), while other two lots of 5Mhz from 2100 Mhz band will be auctioned through bidding.

• Lot A:
  • One 3G spectrum of 10 MHz from 2100Mhz
  • One 4G spectrum of 10 MHz from 1800Mhz
• Lot B:
  • One 3G spectrum of 10 MHz from 2100Mhz
  • One 4G spectrum of 10 MHz from 1800Mhz
• Lot C:
  • One 3G spectrum of 5MHz from 2100Mhz Band
• Lot D:
  • One 3G spectrum of 5MHz from 2100Mhz Band

Lot A and Lot B are bundled with 10Mhz blocks from each 2100Mhz and 1800Mhz bands, which means, buyer of Lot A and Lot B will have to buy spectrum from both bands for 3G and 4G.

Dr. Ismail said that PTA will notify the qualified bidders and their respective interest for spectrum on April 17th, 2014.

Dr. Shah refuted a recent report from Reuters, which claims that Pakistan may not generate more than US850 dollars from the auction.

Reuters in its report claimed that Mobilink and Zong have shown interest in 10Mhz blocks, while Telenor and Ufone showed their interest in 5Mhz blocks.

Not to mention, even if we agree on what Reuters has claimed, then 10Mhz of blocks for 3G – which are tied up with 4G spectrum – will cost US505 million for one lot (US295 million plus US210 million). While two lots of 5Mhz for 3G will generate US147.5 dollars for each license.

In such situations at least US1305 million (US505 million + US505 million + US147.5 million + US147.5 million) will be generated through the auction, unlike what Reuters claimed in its own story.

Dr. Ismail categorically confirmed ProPakistani that the position that Reuters has portrayed is cent percent wrong.

Dr. Ismail said that auction is going as per expectations and things are rolling smoothly. He was confident that Pakistan is going to witness its 3G and 4G operators with-in just two weeks.

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