Licensing licensing renewal lessons from Pakistan Muhammad Aslam

Licensing & licensing renewal – lessons from Pakistan Muhammad Aslam Hayat Regulatory Consultant aslamhayat@gmail. com

Evolution of telecom sector ■ Mobilink license renewed n Approval of Cellular Mobile Policy n PTCL exclusivity for fixed line telecom sector terminated Teledensity % growth n Decision to convert erstwhile T&T to corporation n Award of licenses to 2 Cellular Mobile operators n Granting of another GSM based Cellular Mobile license n Conversion of PTC into PTCL, creation of government operator NTC, Regulator PTA, Frequency Allocation Board (FAB) 1993 1990 2002 1998 n Promulgation of Telecom reorganization ordinance n IPO issue of PTCL exchangeable vouchers of 2% of PTC shares 2007 2004 2003 1995 1994 n Issuance of licenses to 2 new Cellular Mobile, 12 LDI, and more than 80 LL operators through open auction 2005 n Fixed line deregulation policy approved n Privatization of PTCL through selling of 26% strategic shares to Etisalat n Renewal of Paktel / Instaphone licenses n Licenses granted to two new subsidiaries of PTCL namely PTML (4 th Cellular Mobile Operator) and Paknet (ISP) n PTCL privatization process restarted 19

Key factors in telecom growth Enabling regulatory framework Technology neutral approach Independence of regulator Public consultations Transparency and predictability Incumbent privatized Lower taxes and periodical regulatory fee 100% foreign ownership allowed Certainty about license terms and guaranteed renewal

Licensing certainty in Act o Sec. 22 of Pakistan Telecommunication (Reorganization) Act, 1996 Regulator can only modify a licence or its conditions with consent of licensee In case of disagreement (1) both shall resolve difference or dispute by consultation/negotiation (2) either party may approach High Court or ICT Tribunal for decision No such amendment shall very tenure or scope of a license

License renewal o Rule 8 of Pakistan Telecommunication Rules, 2000 After expiry of initial term, license shall be renewed Renewal will be on terms and conditions consistent with policy of Federal Government at relevant time If license is not to be renewed Regulator shall serve a written notice on licensee of at least 1/4 th of initial license term This notice shall terminate license on expiration of initial term Notice & termination are subject to appeal & judicial review

Commitment to licensing certainty continues…. . S. 5. 4 of Mobile cellular policy 2004 o Mobile Cellular License under this policy will replace existing licenses as soon as possible or at latest upon expiry of current licenses o Existing operators will be encouraged to come under the purview of Mobile Cellular policy even before expiry of their existing License o Fees for renewed licenses will also be paid using the same payment profile and be based upon same per MHz per annum price as determined in the auction Rule 4 of USF Rules, 2006 o Every licensee having a license containing provision regarding USF contribution, issued, renewed or validated, shall contribute 1. 5%, from date of grant of such license, of its annual gross revenues for recently completed financial year of licensed services minus inter-operator and related PTA/FAB payments o Federal Government may at any time reduce percentage of USF contribution but shall not increase it beyond 1. 5% without consent of USF contributors