Saturday, February 18, 2012

Government is happy over projected 3G earnings

Government and PTA are all happy to see foreign investors responding to their call of participating in the 3G and 4G spectrum auction which is scheduled on March 29, 2012.
According to PTA sources, Telecom operators from USA, UK, Japan, Qatar and Afghanistan are planning to participate in the bidding process apart from existing 5 telecom operators that providing GSM services in Pakistan.
Earlier it was feared that Government will not get beyond US $ 260 mn for each license from the existing operators and combined it will bring home some US $ 800mn of Foreign Investment in the telecom sector.
But as the government did not want to experience any further budget deficit which is already jolting the economy with a projected 6% increase, it therefore, gave the task to PTA and Ministry of Information Technology to invite foreign telecom operators to further swell the bidding price by a handsome margin.
Government is happy over projected 3G earningsThe current level of commitments from the potential investors is giving much needed comfort to the government but it is not clear yet, which foreign investor will finally participate in the bidding process.
According to analysts, if foreign investors created the aggression during the auction, government’s total earning could go beyond US $ 1bn even. Government has also involved the law ministry to take the advise on legal grounds and ease the terms and condition to execute the bidding process as early as possible.
Analysts believe that mending the law to ease the process may repeat the Indian episode where 3 years later, Indian Supreme Court had to intervene and cancelled all the 122 2G licenses granted after deviating the law under Manmohan Singh’s Government.
An official of a local telecom operator told that Government of Pakistan should consider the statistics of Indian 3G market before it auctions the spectrum where 3G adoption rate is still very slow despite of much educated subscriber base than Pakistan. At the moment, out of 893.8 million of total subscriber base, only 2% of them are using the 3G services.
All eyes are now on the 3G bidding which could provide government a chance to survive financially. Telecom contributed the highest in the year 2005-06 with 54.1% of the total FDI which came down to mere 5% of the total FDI in the year 2010-11.

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