Home »Telecommunication » Pakistan » Rs 52.73 billion budgeted from 3G licences for FY-20
The government has budgeted Rs 52.73 billion from 3G licences under the head of non-tax revenue for the next fiscal year 2019-20 against Rs 6.854 billion budgeted for the current fiscal year which was later revised to Rs 66.620 billion.

However, mobile operators have approached the Islamabad High Court with respect to renewal of mobile licences. The matter is still pending with the court and the government has yet to materialise the revenue from licence renewal of two mobile operators in the current fiscal year.

Under the head of income from property and enterprise (Pakistan Telecommunication Authority (Surplus), the government has projected to generate Rs 1 billion in the upcoming fiscal year against Rs 12.787 billion budgeted for the current fiscal year 2018-19.

The cellular mobile licences of Pakistan Mobile Communications Limited (ex Warid/Jazz) and Telenor Pakistan Limited (Telenor) were due to expire on May 25, 2019 and due for renewal. The licence of China Mobile Pakistan (CMPak Zong) is due for renewal on October 22, 2019.

The Ministry of Information Technology and Telecommunication had issued policy directive to the PTA and Frequency Allocation Board (FAB) for renewal of three cellular mobile licences of which the government is projecting to generate $1.37 billion revenue. However, mobile operators have approached the Islamabad High Court to decide on the terms of licence renewal in an equitable, fair and transparent way.

According to the policy directives, the government has given one month extension to mobile operators as licences of two mobile operators were due for renewal on May 25, 2019 to avoid disruption in services.

The policy directive stated, "The payment (100 percent or 50 percent upfront as the case may be) will be due on June 25, 2019. In case, the spectrum is utilised till June 25, 2019 and requisite payment is not made, the proportionate amount will be charged for the said period, in addition to any legal action as per the act, rules, policy, etc.

According to the policy directive, the renewal price for the right to use frequency spectrum included in the licences being renewed will be in accordance with per MHz price benchmarks from frequency spectrum auctions of 2016 and 2017 i.e. per MHz price for frequency spectrum in 900 MHz and 1800 MHz will be USD 39.5 million and USD 29.5 million, respectively.

The tenure of the renewed licences shall continue to be 15 years. The payment terms will be 100 percent upfront or 50 percent upfront with remaining 50 percent on five equal annual installments on LIBOR+3 percent. The renewal fee will be paid in the US dollars with the option to pay in Pak rupee, which will be calculated at the market exchange rate applicable at the time of payment, as per precedence of earlier cellular licenses issuance/renewals.

Copyright Business Recorder, 2019

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