Ending the licence renewal saga
The long-drawn telecom license-renewal saga has come to a close. Over the weekend, news broke that Telenor Pakistan (the last holdout after Jazz signed up a couple of months ago), had finally agreed to the “onerous” terms & conditions, which the telecoms regulator PTA had been insistent on since 2019. Telenor Pakistan says it has ceded ground “under protest”. The operators chose business continuity over controversy, as the regulator stayed firm. But will it be a smooth ride from here on out?
For some background, recall that telecom licenses had expired back in the May of 2019 for both Telenor and Jazz (linked with ex-Warid telecom license). The main contention appeared to be the license-renewal price, which came to $449-$450 million. The duo challenged the PTA’s renewal T&Cs at the Islamabad High Court back (IHC) in the August of 2019. The court initially ordered them to deposit partial payments as “security” to the PTA, until final ruling was issued on operators’ appeals.
Two summers later, on July 19, 2021, the IHC decided in favor of PTA, following which Telenor Pakistan and Jazz both approached the Supreme Court for an appeal against the ruling. It appears that the two operators, which had been depositing the renewal fee in installments anyway, saw further litigation futile at this late stage of the game. Now that both of them have signed on to the T&Cs for the renewal of their 15-year licenses, perhaps it is better to move on and look towards the future.
In the absence of government funding, private capital is about the only option to increase equitable and affordable access to mobile broadband and associated digital services in Pakistan. Therefore, the regulator must ensure that mobile network operators are facilitated in fetching more investment into Pakistan. Without strengthening basic connectivity (preferably fixed broadband instead of mobile broadband alone), the current growth seen in the digital-facing ecosystem would be unsustainable.
Having said that, the regulator should also find a way to prioritize consumer welfare. The current level of quality of service (QoS) offered by telco’s is disappointing, to say the least. Previously, operators used to contest complaints around poor QoS – they don’t put up a defense anymore. They rather argue that their networks are deteriorating because it is harder to do business in Pakistan due to expensive spectrum, even as utilities cost are raising and consumers are growing more price-sensitive.
If indeed expensive spectrum is the leading cause of declining network quality, will the operators agree to a middle ground where spectrum is made cheaper and QoS parameters stricter? Can the regulator stand up to a fiscally-strapped government to assert that revenue-centric spectrum auctions will remain counter-productive when it comes to market development and digital divide? Here is hoping that both sides come out of this license-renewal saga by learning the right kind of lessons!