February 2004 updates

Government of Pakistan announces cellular mobile policy
By Jamshed Masood in Pakistan. February 2004

The Government of Pakistan has approved the first ever mobile cellular policy (text available at http://www.moitt.gov.pk) paving the way for the granting of two additional licenses and enhancing competition in the cellular mobile sector. The cellular sector in Pakistan is served by four cellular operators serving a subscriber base of 3 million subscribers, 90% of whom have subscribed to cellular services during the past three years since a "Calling Party Pays" regime was introduced for cellular sector.

The policy introduces new concepts, including roll-out obligations for all operators, licensing through auction, and continuity of existing licenses. The new policy was necessary as the mobile cellular sector had been operating on an ad-hoc basis without experiencing the level of growth experienced in other regional countries. Under the recently-approved policy, two new cellular operators will be granted licences for a period of 15 years to run nationwide operations. New licences would be awarded through an open-bidding process to enable potential operators to bid for GSM or CDMA spectrum. The roll-out obligations would include coverage of 70 per cent of "tehsil" headquarters in four years and the bidders will be required to submit a performance bond to ensure compliance with roll-out obligations.

Under the policy, the existing mobile service licenses will be renewed on payment of the same charges for frequency spectrum as set through bidding for the new licenses. The new policy also introduces service features for mobile sector like national roaming, number portability, infrastructure sharing, service quality standards and targets, and interconnection obligations. Under the new policy cellular licensees would also be required to contribute towards Universal Service Obligation Funds in the same manner as fixed-line licensees.

The industry regulator, Pakistan Telecommunication Authority (PTA), has invited Expression of Interest (EOI) (text available at http://www.pta.gov.pk) from potential operators interested in participating in the bidding process for the two cellular licenses that are being made available as a result of the new cellular policy. The EOI has generated tremendous interest among local and global operators resulting in PTA receiving 33Expressions of Interest (details available at http://www.pta.gov.pk) from local blue chip corporations as well as international operators from Singapore, USA, UK and other European countries, Malaysia and Middle East. It is expected that the fever will intensify in the run up to the auction process. A pre-bidder conference was held by PTA on 18th of February 2004 and it is likely that the bidding process will be concluded by April 2004 paving the way for the introduction of two additional cellular licenses before the end of the year.