Cellular mobile operators (CMOs) need these  licenses  from the  government to operate commercially  for a period of 15 years after which they need to renew them. The process has been delayed already  because there is a deadlock between CMOs and the government over what should be the ‘right’ price for renewal of these licenses. The operating licenses of Jazz, Telenor Pakistan and  Zong are expiring in May, but renewing these  permits at the right price and  auctioning additional  spectrum can fetch the cash-strapped government more than $2 billion.

 

The industry says an expensive license leaves them with little money to invest in infrastructure (buying additional spectrum, upgrading and expanding network), they argue. This slows down broadband penetration as well as economic activity that may result from it. Secondly, it will be unfair if these three players pay more than what Ufone has paid because the latter will have an advantage (in terms of cost of business) in the next 10 years.

On the other hand, this is an opportunity for the government to plug in its budgetary gap, which is more than Rs2 trillion. Since these operators must pay to renew their license, the government can get quick money by offering a higher price.

 

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The operating licenses of Jazz, Telenor Pakistan and Zong are expiring in May 25, 2019, but renewing these permits at the right price and auctioning additional spectrum can fetch the cash-strapped government more than $2 billion

The operating licenses of Jazz, Telenor Pakistan and Zong are expiring in May 25, 2019, but renewing these permits at the right price and auctioning additional spectrum can fetch the cash-strapped government more than $2 billion

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Both the government and the private sector have their own justifications to protect their interests, but sane voices, such as information communications technology expert Parvez Iftikhar believes it makes sense to keep license price at parity with what Ufone has paid and sold the additional spectrum available with the government. This can still add more than $2 billion to the government’s kitty.

 

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Higher spectrum price increases the cost of doing business and discourages investors from expanding their network, which eventually slows down broadband penetration. The sector has already invested $15 billion and needs to make more investment in infrastructure because talks of 5G technology have already begun and 5G cannot be implemented without laying fiber optic, which is need of the hour. But that is costly. If they buy an expensive license, it will slow down broadband penetration for existing technology, forget 5G.

 

That said, experts believe there is a hunger for more spectrum and these players will need double of what they already have when 5G is launched. The government should sell more spectrum as soon as possible because an unsold spectrum is a lost opportunity, they say. It is not like gold whose value may increase over time.

Even if the government renews their licenses at the same price as Ufone paid, it can still raise north of $2 billion from these two events.