Only one of the two highest bidders for the new mobile licences has reportedly deposited $63 million before the expiry of the 10 working days deadline provided in the agreement signed by the bidders with the Pakistan Telecommunication Authority (PTA).
The Norwegian Telenor Mobile Communication had remitted to the PTA account $63 million last Friday, that made up 25 percent of the bid amount payment.
PTA had already received $10 million from Telenor prior to the bidding which took place on April 14, 2004. Successful bidders were required to pay 25 percent of their bid of $291 million to PTA within 10 additional days.
The other winner in the contest was Space Telecom (Pakistan) - a joint venture company to be incorporated which had a Pakistani partner with two Syrian companies holding 25 percent shares each. Both these companies were reportedly respectively owned by the Chairman and Chief Executive Syrian Telecom, Damascus.
Business Recorder understands that till the close of business on Monday, PTA had not received the requisite amount of $63 million from Space Telecom.
Under the bidding rules PTA had given up to April 8th to the bidders to amend and finalise their consortiums.
On the bidding day ie April 14, Pakistan Oil Fields Limited reportedly also joined the Space Telecom consortium and their representative was allowed to participate in the proceedings.
PTA had informed Space Telecom that once the company is incorporated in Pakistan and shares are issued only then POL could become part of the mobile license holding company but could not become a part of the bidding consortium as the rules did not permit a change in the composition of the consortium after April 8, 2004.
Under the rules PTA is obliged to approach the third highest bidder in case of default by one of the successful bidders.
In this case, Warid Telecom of Abu Dhabi was the third highest bidder, who had stopped participating in the auction when the bidding crossed $280 million.
The major shareholders in Warid are: Sheikh Rubbaya who is said to own 10 percent of UAE mobile company - Eitlat, along with Sheikh Al Nahyan, Sheikh Surror, Sheikh Saif and others who already own 25 percent of United Bank and also have majority stakes in Bank Al-Falah in Pakistan.
According to other bidders it was Space Telecom which was largely responsible for raising the bidding beyond the $225 million mark as it appeared that they were bent upon obtaining the mobile licence irrespective of the price.
The rules also provide for forfeiture of the $10 million pre-bid deposit in case of default.
The licence holders are expected to deposit an additional $73 million within 30 additional working days.
In case of Telenor and Space Telecom the dates to be met were April 26th (25 percent) and May 26th (25 percent) to meet the 50 percent, payment schedule.
If Warid Telecom is issued a licence on April 27th, then it too would have to match the price of $291 million and deposit $63 million by May 10th and $73 million by June 3rd, 2004.
INDUSTRY STATUS: Meanwhile, the government has decided to classify the telecom sector, including cellular operations, as 'Industry' with immediate effect. A Cabinet decision to this effect was notified here on Monday.