A Pakistani cell phone user browses YouTube on his mobile phone in Quetta. BANARAS KHAN/AFP/Getty Images
Pakistan has recently had a rocky relationship with communications technology; the rest of the world has watched as the government banned YouTube in 2012, and in late 2013 when it tried to ban the use of voice-over-IP applications such as Skype and Viber. So it is no surprise that the country has not stepped up its cellular communications strategy, until now.
VISUAL CONTEXT: PAKISTAN’S BROADBAND USAGE
Source: PTA
The government will auction off 3G and 4G spectrum licenses on April 23 — news that should excite not just users who have watched the rest of the world swiftly surpass 2G speeds, but telecommunications companies who will be able to build out higher-speed networks and appeal to the growing base of mobile users. Neighbors to the north and south — Afghanistan and India respectively — have made efforts to move to 3G networks successfully, and India has announced plans to move into the 4G market, so in respect to the rest of the region, Pakistan has been slow to come by this network expansion.
Yet the telcos are not so enthused by the pending auction. Reuters reports that only four out of the five major telcos in Pakistan had submitted bids for the spectrum by the time bidding closed on Monday, April 14, with no new bidders in sight. Warid — the country’s smaller of the five major telcos — has opted out of the bidding altogether.
Officials on the Finance Minister Ishaq Dar’s team told Reuters:
The finance minister is very angry, so much so that he wants to call off the auction if we are so embarrassingly off target. This has happened because of an over enthusiastic IT ministry which oversold an undercooked plan to its fiscal managers. It looks like heads may roll on this one.
The ministry had estimated between $4 and $5 billion of revenue generated from the spectrum auction, when it will likely only make somewhere around $850 million, officials said. The telcos that have bid did not even consider aiming for 4G ownership, instead the four bid for the MHz bands available for 3G — vastly disappointing the ministry who aimed to make the most money from selling the 4G bands.
But it is not for lack of mobile usage that some telcos are opting out of spectrum ownership. Indeed, the IDC predicted in 2013 that 2014 would be the year Pakistan sees unprecedented growth in mobile usership — that mobile usage would surpass desktop usage this year. The real problem is likely one of infrastructure — or lack thereof. Still, those telcos that have bid and are looking to ramp up network speeds. Tech in Asia reports that Telenor and Mobilink — two of the largest telcos — say they have the infrastructure to get 3G up and running in a matter of weeks once they are delivered the spectrum. 4G will still need a major investment in terms of physical infrastructure overhaul as well as the implementation of more cell sites. Perhaps then the country will be ready to host a successful 4G spectrum auction.
