PTA unveils final prices for renewing licenses of telecom operators

Pakistan Telecommunication Authority (PTA) has rejected mobile operators concerns regarding the prices of mobile license renewals and passed an order announcing the final price for license renewal. The final fee rates set by PTA are at $39.5 million per MHz for frequency spectrum of 900 MHz and $29.5 million per MHz for frequency spectrum of 1800 MHz, as reported by ProPakistani.pk.

The order passed by the PTA is in compliance of the Islamabad High Court (IHC) order dated 21-06-2019, where PTA was asked to make a decision regarding the license renewal matter and announce terms for renewal of telecom licenses. PTA now has directed the cellular operators to pay their license fee before August 21st, 2019 or their licenses will be termed expired and their telecom services will be blocked after the deadline.

The process of license renewal starts 18 months before the date of expiration of licenses. In that time the PTA consultants and other stakeholders from the companies and government sit together to discuss various aspects of the renewal, including the price of the license.

The licenses of Telenor and Jazz were expiring on May 26th, 2019 and as PTA was unable to communicate anything to operators until the first week of May 2019, these two operators approached IHC and demanded that PTA should be asked not to block their services due to the expiry of licenses. They also made a plea that PTA should be asked to formulate the mechanism for renewal at a fair price. After which the high court gave PTA the order to formulate a plan as soon as possible and give operators sufficient time to get their licenses renewed.

Following are the main points of the official order which PTA passed regarding the renewal of licenses of mobile operators.

• The license renewal fee shall be US$ 39.5 million per MHz for the frequency spectrum of 900 MHz and US$ 29.5 million per MHz for the frequency spectrum of 1800 MHz.
• Telecom licenses will be renewed with effect from 26th May 2019 for a time 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%.
• Telecom operators can pay the fee amount 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 after the deadline, the license will be termed 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 selects 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.