The anxiety is growing among Telecom Operators on delaying Licence Renewal

The anxiety is growing among Telecom Operators on delaying Licence Renewal
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As the deadline of renewing licences for the Telecom operators is approaching fast, the anxiety is growing among telecom operators on delaying Licence Renewal by the authorities. The deadline for the expiry of their licenses is near and the concerned authority has still not issued any framework for renewal of their licenses.

Licenses of three mobile operators in Pakistan including Warid, Telenor, and CMpak are going to expire in 2019. This delayed response by the government will negatively affect the cellular users and is, therefore, creating uncertainty in the industry.

According to the Pakistan Telecommunication Authority (PTA) laws, the government was supposed to have issued a license renewal framework about one and a half year ago.

However, it is still not issued to three mobile operating companies – Zong, Warid, and Telenor.

The companies are also worried about the huge amount for license renewals demanded by the government to gain handsome revenues. They not only need to renew their licenses but also require additional spectrum with the increase in the number of subscribers.

Back in 2004, Warid, Jazz, Zong and Telenor bought licenses for 15 years according to international standards. The license of Telenor and Warid – which was later merged with Jazz – are going to expire in May while Zong’s License will expire in October of the current year.

The operators have requested the government to not exceed the renewal fees paid back in 2004, which was USD 291 million, as the Pakistani rupee has depreciated significantly since then. The operators have also requested that the government should consider the use of Pakistani rupee as the currency of denomination for license renewals and any future spectrum auctions.

With that base price, telecom companies would have no choice but to renew their licenses to continue operating without buying new spectrum which will inevitably damage the network quality, user experience, and with it government revenues in the end.

This is an era of high-speed data, which requires basic tech infrastructure to boost economic development, e-commerce, e-business models and digitalization of services.

The cellular companies not only need to renew their current licenses, but they also require new spectrums as with growing number of subscribers, the present spectrum has become congested like a highway.

With teledensity of 84% in Pakistan, the telecom industry’s growth has stagnated in voice category. However, the data is growing fast with increasing online services and apps, but it still covers around 30% of the population. Over the coming years, the use of data will increase manifold and the next growth curve in the telecom industry will be the mobile broadband.

The government must look into this carefully and cater their needs as the telecom sector has played a vital role in Pakistan’s progress by foreign direct investment in billions of Dollars and by creating countless jobs for public. During this crucial time when the government is planning to achieve its objectives of ‘Digital Pakistan’ government should consider the problems of Telecom Industry which is one of the most helpful & vibrant sectors in achieving the objections.

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