The Ministry of Information Technology and Telecommunication (MoIT&T) issued a policy directive to the Pakistan Telecommunication Authority (PTA) for the auction of the Next Generation Mobile Services (NGMS) spectrum in Azad Jammu and Kashmir (AJ&K) and Gilgit-Baltistan with the base price of $0.87 million for 2×1 MHz (1 MHz paired) spectrum in both 1800 and 2100 MHz bands respectively.
The spectrum auction will generate revenue and help to improve mobile broadband services.
Currently, five Cellular Operators, including a Special Communication Organization (SCO), are providing Cellular Mobile services in AJ&K and GB. A significant surge in the demand for mobile broadband services has been witnessed particularly during the COVID-19 pandemic. This ever-increasing reliance on mobile broadband services necessitated the demand for the availability of more spectrums to meet the connectivity needs of the citizens of AJ&K and GB.
The policy directive detailed that after the consideration of the recommendations of the Auction Advisory Committee constituted by the federal government, based on the inputs from the Consultant, PTA, and the Frequency Allocation Board (FAB) have issued the policy.
It is issued in exercise of powers under sub-section (2) of Section 8 of the Pakistan Telecommunication (Re-organization) Act, 1996, as enforced in AJ&K by virtue of the Azad Jammu & Kashmir Council Adaptation of Pakistan Telecommunication (Re-organization) Act, 2005 (including all amendments made from time to time) and in GB by virtue of the Gilgit-Baltistan Council Adaptation of Laws Act, 2012 (including all the amendments made from time to time), for carrying out the auction of the radio frequency spectrum in 1800 MHz and 2100 MHz bands as made available by the FAB for compliance by the PTA.
The policy states:
- A transparent, competitive process shall be formulated by the PTA for auctioning the 2×16 MHz spectrum in the 1800 MHz band and the 2x30MHz spectrum in the 2100 MHz as made available by the FAB.
- The base price for the 2×1 MHz (1 MHz paired) spectrum in both the 1800 and 2100 MHz bands is USD 0.87 million respectively.
- Additionally, the 2×10 MHz spectrum earmarked by the FAB for the SCO in both the 1800 and 2100 MHz bands is approved for assignment to the SCO.
- The PTA will issue an Information Memorandum specifying the detailed procedure of the auction, including the eligibility criteria and steps for participating in the auction process. The auction will accordingly be conducted by the PTA in the minimum possible time after the issuance of the Policy Directive by the Federal Government.
- The spectrum assignment will be ‘Technology Neutral’ and usable for all the existing and upcoming advanced generations/technologies within the applicable policy framework of the Government of Pakistan.
- To ensure the optimal utilization of the radio frequency spectrum, the PTA, in consultation with the FAB shall endeavor to provide each CMO with the opportunity to acquire such additional spectrum that will enable it to hold, in total, the spectrum in multiples of standard 5 MHz paired spectrum blocks.
- Post spectrum auction, all the CMOs will be required, within a reasonable time as determined by the PTA, to comply with the rationalization plan as may be issued by the PTA in consultation with the FAB to ensure the optimal utilization of contiguous spectrum holdings.
- The existing CMOs and New Entrants are eligible to participate in this auction.
- Transactions related to the Spectrum Auction (spectrum fee) shall be US Dollar-denominated but the amount shall be paid either in US Dollars or in equivalent Pakistani Rupees. For the purpose of conversion, the National Bank of Pakistan TT selling rate prevailing on the date preceding the date of payment shall be used.
The terms of payment will be:
- Minimum 50 percent upfront payment within one month of the auction date, with the remaining to be paid in 10 equal installments within 10 years.
- If an auction winner intends to pay the remaining balance liability on account of the initial spectrum fee at any time before the end of a decade, it will be acceptable and without any pre-payment penalties.
- The PTA shall transfer the auction proceeds to the AJ&K and GB Councils less the administrative charges, cost of regulation, and consultancy charges within 30 x days from the receipt of the said fee.
The tenure of the frequency assignment will be for 15 years, and the spectrum won through the auction process will be incorporated by the PTA into the renewed cellular licenses (due for renewal in June 2021 i.e. of Jazz, Telenor, and Ufone).
In order to align the expiry dates of the cellular licenses in AJ&K and GB, the tenure may be accordingly adjusted by the PTA for the CMPAK license which will expire in August 2022 with the necessary payments and adjustments.
The provisions for active infrastructure sharing, and Spectrum Trading and Sharing will be incorporated in the new licenses and will take effect as per the approved regulatory framework.
Terms and conditions relating to enhanced coverage, and enhanced Quality of Service (QoS), etc. shall be incorporated by the PTA to enhance mobile broadband proliferation in the region.
This policy is issued in supersession of the Policy Directive for the Next Generation Mobile Services in AJ&K and GB, No. DII-1/3/2013-AJ&KC dated 17 August 2017.