Close enough for Jazz; cellco enters minimum bid for 4G spectrum

18 May 2017

Pakistan’s largest mobile provider by subscribers, Jazz, was the only bidder for a 2×10MHz block of 4G spectrum in the 1800MHz band, the Pakistan Telecommunication Authority (PTA) has confirmed. The regulator will now evaluate the bid to ensure that all the necessary conditions have been met, before declaring Jazz the winner of the auction. The cellco submitted the minimum offer of USD295 million and, if successful, Jazz will have the option to pay the amount either as a single lump sum, or half up front and the remainder in five equal annual instalments, with an interest rate of 3% per year. In addition to the USD295 million offer, the cellco will be required to pay a 10% tax (i.e. USD29.5 million) to the Federal Board of Revenue (FBR).

As noted by TeleGeography’s GlobalComms Database, Jazz entered the 4G market via its 2016 merger with Warid Telecom, which had refarmed its existing 1800MHz holdings in 2014 to offer the service rather than compete in that year’s frequency auction. As such, the acquisition of additional 1800MHz band spectrum will substantially improve Jazz’s LTE capabilities.

Meanwhile, conspicuous by its absence was Pakistan Telecommunications Mobile Limited (PTML) – which operates under the Ufone brand. Ufone was expected to submit an offer for the spectrum, as it is currently the only operator without the capability to provide 4G services. Chinese-owned Zong launched the nation’s first LTE service in September 2014 having been the sole winner of 4G spectrum in that year’s auction, whilst Norwegian-backed Telenor Pakistan inaugurated an LTE-850 network in September 2016 after snapping up airwaves in the 850MHz range in June 2014. Commenting on the limited interest in the auction, local news outlet Dawn cited a PTA official as saying that the reserve price and high level of taxation in the sector may have deterred Telenor and Ufone from submitting offers, whilst Zong reportedly confirmed that it did not require the additional bandwidth. ‘The price of the spectrum was set by the auction advisory body on the higher side. This price is USD85 million more than the asking price for the same spectrum in 2014,’ the official explained.

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