New licences fetch unexpected USD582 million

15 Apr 2004

The Pakistan Telecommunications Authority (PTA) yesterday awarded 15-year GSM concessions to two new operators, Telenor and Space Telecom, each of which bid USD291 million to beat off competition from seven rivals. Norwegian incumbent Telenor and Space Telecom, a consortium which includes the local Attock Group and Syrian GSM operator SyriaTel, will each pay half the licence fee within the first year, with the balance payable over the following ten. In addition, each will pay 2.5% of their annual gross revenues to the PTA. The bids greatly surpassed analyst expectations of USD100 million, a strong indication that the government’s drive to attract substantial foreign investment to the country’s underdeveloped telecoms market is bearing fruit.

Pakistan is already home to four mobile networks, two analogue and two digital, which between them shared 3.8 million subscribers at the end of February, up from 1.4 million at the end of June 2003. The market leader is GSM operator Mobilink, which has around 2.4 million users and 60% of the market. The government has said that it expects the number of mobile phone users to surpass the nation’s 4.5 million fixed line customers in 2005, and to reach 15 million within three to five years.

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