Govt allocates billions for IT sector

KARACHI: The government is expected to receive Rs27 billion from 3G/4G licenses under non-tax revenue for the next fiscal year 2020-21.

This is much compared lower than Rs52.73 billion budgeted for the current fiscal year which was later revised to Rs125 billion. However, the matter of license renewal will be decided in court.

According to the budget documents 2020-21, under the head of income from property and enterprise (Pakistan Telecommunication Authority (Surplus), cellular licenses were issued by Pakistan Telecommunication Authority (PTA) to two new cellular mobile operators i.e. M/s Telenor Pakistan and M/s Warid Telecom on 26th May 2004, for a period of 15 years, under the Mobile Cellular Policy 2004, on payment of $291 million after the auction.

The cellular license of M/s Paktel Limited, now China Mobile Pakistan (Zong), was also renewed by PTA under the 2004 Policy on 24th October 2004, for a period of 15 years on payment of $291 million.

These licenses were due for renewal on 25th May 2019, and 22nd October 2019, respectively. In 2014, the government of Pakistan renewed the license of Ufone at $291 million.

Mobile licenses of Telenor and Jazz expired on 26th May 2019. PTA had passed a verdict relating to license renewal of Jazz and Telenor which said, “Fee for renewal of the license will be $39.5 million per MHz for frequency spectrum of 900 MHz and $29.5 million per MHz for frequency spectrum of 1800 MHz.”

However, mobile operators have approached the Islamabad High Court (IHC) with respect to the renewal of mobile licenses.

The government had approved the renewal of licenses of two mobile operators i.e. Jazz and Telenor Pakistan at $450 million each while the third operator – CM Pak at $470 million.

Three mobile operators have deposited around Rs. 107 billion in Federal Consolidated Fund (FCF) for license renewal including $238.6 million (Rs. 37.16 billion) by China Mobile (CM Pak), $224.6 million (Rs. 35.262 billion) by Telenor Pakistan and Jazz each.