Baby Leone
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KARACHI: More than a billion dollars Foreign Direct Investment (FDI) is likely to land in the second-half of the current financial year if the auction of 3G/4G licences is successfully carried out on high-realised value.
It is estimated that the bidding process will drive the winning or final licence prices by at least twice the base prices set by the government at $210 million and $155 million for four licences of two different categories. The base prices totaled $785 million of the four licences whereas its twice value is equal to $1.57 billion or Rs 141.3 billion, which is lesser than the income estimated by the State Bank of Pakistan (SBP) at Rs 150 billion for containing fiscal deficit.
The auction set to be held for 3G/4G licences on March 28-29 separately for spectrum of 800MHz and 1900-2100 MHZ for a period of eight and 15 years respectively, with expectations that participations will be maximum in numbers by existing and new foreign and local players.
According to information memorandum, the licence for 800 MHz licence shall be issued after payment of first 50 percent of the initial spectrum fee within 30 working days from the auction date. The remaining 50 percent of the licence price shall be deposited in five equal annual instalments payable in dollars or equivalent in rupees.
The licence fee will be determined equally for three spectrum of 1900/2100 MHz, that is, the highest will be paid by winning bidders. The licence shall be awarded after payment of 100 percent of the auction winning price within sixty 60 working days from the date it is offered to the bidder. Therefore handsome inflows of FDI are likely by next two months of the auction in May 2012 and huge payment will be transferred to the governments kitty.
Experts said that winning prices in the auction may increase more than thrice of the base price depending on the interest of the bidding investors or telecom operators. In 2004, the bidding was organised in two different stages. In the first stage, the bidders placed sealed bids in a box against the base price of $61 million. The highest value of $161 million was received after participation of five operators and finally the value of $291 million was set as licence fee in the second stage of the bidding process.
If the value of $61 million was driven to $291 million in the past, the base price of $210 million should be multiplied three to four times, they added.
Besides, billions of dollars FDI and local investment may land in the country by next year in telecom sector, as licence holders start rolling out infrastructure of the 3G/4G services.
The winner of 800 MHz licence can start in current year whereas the three operators will launch their services in 2013, the PTAs IM stated.
According to an estimate, a telecom company needs one billion dollars alone for the launch of 3G services in the country, whereas there will be a number of direct and indirect employments in the engineering and telecom sectors generated besides different allied businesses.
Daily Times - Leading News Resource of Pakistan
It is estimated that the bidding process will drive the winning or final licence prices by at least twice the base prices set by the government at $210 million and $155 million for four licences of two different categories. The base prices totaled $785 million of the four licences whereas its twice value is equal to $1.57 billion or Rs 141.3 billion, which is lesser than the income estimated by the State Bank of Pakistan (SBP) at Rs 150 billion for containing fiscal deficit.
The auction set to be held for 3G/4G licences on March 28-29 separately for spectrum of 800MHz and 1900-2100 MHZ for a period of eight and 15 years respectively, with expectations that participations will be maximum in numbers by existing and new foreign and local players.
According to information memorandum, the licence for 800 MHz licence shall be issued after payment of first 50 percent of the initial spectrum fee within 30 working days from the auction date. The remaining 50 percent of the licence price shall be deposited in five equal annual instalments payable in dollars or equivalent in rupees.
The licence fee will be determined equally for three spectrum of 1900/2100 MHz, that is, the highest will be paid by winning bidders. The licence shall be awarded after payment of 100 percent of the auction winning price within sixty 60 working days from the date it is offered to the bidder. Therefore handsome inflows of FDI are likely by next two months of the auction in May 2012 and huge payment will be transferred to the governments kitty.
Experts said that winning prices in the auction may increase more than thrice of the base price depending on the interest of the bidding investors or telecom operators. In 2004, the bidding was organised in two different stages. In the first stage, the bidders placed sealed bids in a box against the base price of $61 million. The highest value of $161 million was received after participation of five operators and finally the value of $291 million was set as licence fee in the second stage of the bidding process.
If the value of $61 million was driven to $291 million in the past, the base price of $210 million should be multiplied three to four times, they added.
Besides, billions of dollars FDI and local investment may land in the country by next year in telecom sector, as licence holders start rolling out infrastructure of the 3G/4G services.
The winner of 800 MHz licence can start in current year whereas the three operators will launch their services in 2013, the PTAs IM stated.
According to an estimate, a telecom company needs one billion dollars alone for the launch of 3G services in the country, whereas there will be a number of direct and indirect employments in the engineering and telecom sectors generated besides different allied businesses.
Daily Times - Leading News Resource of Pakistan
