Pakistan gears up for 3G, 4G auctions in April 2014

Pakistan will hold long-awaited auctions for 3G and 4G telecoms licences this April, the finance minister said on Friday, a step that could help boost the cash-strapped country’s foreign reserves.

A 3G licence will cost $295 million and a 4G licence will cost $210 million, Finance Minister Ishaq Dar said.

Pakistan Telecommunication Authority (PTA) will auction 50 MHz of spectrum (30 MHz in 3G band and 20 MHz in 4G band). The base price will be $295 million per 10 MHz for 3G and $210 million per 10 MHz for 4G.

Dar confirmed the figures and added that the reserved price for new entrants would be $291 million with three licences for 3G spectrum and two licenses for 4G spectrum will be auctioned.

The government has approved the draft information memorandum prepared by the consultants, and that the license will be offered for 15 years.

As per policy‚ the successful bidder will have to pay 50 per cent price forthwith while the rest would be payable in five years with interest rate three per cent above LIBOR.

He said the government would be looking for full payment, or a 50 per cent payment with the rest to be paid in five equal installments over five years, with an interest rate of three per cent.

There are about 132 million mobile phones in use in Pakistan, a country of 180 million people, according to the Pakistan Telecommunication Authority.

The telecommunications market was deregulated in 2004 and foreign firms such as Etisalat have invested heavily in recent years.