An abysmal response to this week’s auction for next-generation cellphone spectrum licences means cash-strapped Pakistan will struggle to fund its budget this year, finance and IT ministry officials and telecom industry executives told the media.
Pakistan is set to hold long-awaited auctions for 3G and 4G network licences on April 23, a step the government projects will raise $2 billion to boost the country’s foreign reserves.
But officials say there has been scant interest in the bidding process and estimate Pakistan will raise no more than $850 million.
“The finance minister (Ishaq Dar) is very angry, so much so that he wants to call off the auction if we are so embarrassingly off target,” said an official on his team, who declined to be identified as he is not authorised to speak officially on the matter.
Pakistan is the only major country in the region that still does not offer 3G services. Its neighbour, war-ravaged Afghanistan, switched to 3G services in 2012.
There are about 132 million mobile phones in use in Pakistan, a country of 180 million people, according to the Pakistan Telecommunication Authority.
Warid Telecom Pakistan, owned by the privately-held conglomerate Abu Dhabi Group, did not submit a bid, said a source in the company. Neither did Turkcell and Saudi Telecom Company, two foreign companies who had earlier shown interest.
“The auction is thus expected to go for $863 million, nowhere close to $2 billion.”
Bids for 4G LTE licences were to start at $210 million. No operator has shown any interest what soever.
