STAFF REPORT ISB: A consultant hired by Pakistan Telecommunication Authority (PTA) has deemed that the market will not be ready for another 3G/4G spectrum auction for at least another year.
The PTA commissioned an investigation into the matter by InterConnect Communications, which submitted a report following meetings with the countrys five mobile operators as well as various other stakeholders.
The report found that mobile operators are already contending with low margins, which would likely to deter them from any further investment in spectrum for at least the next 12 months.
This year alone, the PTA has twice been requested to hold fresh auctions by the countrys finance ministry, primarily as the government factored Rs. 56 billion to be generated by the auctions into its budget for the fiscal year 2014-15.
However, both attempts to hold auctions this year were derailed by the mobile operators refusing to participate.
Minister of State for IT Anusha Rehman has stated that the ministry intends to hold further 3G/4G auctions before June 30, 2016.
Pakistan last held spectrum auctions in April 2014; at this time, the challenges faced by operators were made evident by the amount of unsold 4G and 850MHz spectrum that remained following the bidding. The government promised to address these issues, but operators now face higher taxes than last year.
Adding to operator woes, mobile revenue fell 1.8 per cent in the fiscal year ending June 30, but most strikingly direct foreign investment plummeted by 72% compared to last year.