Pakistan’s Telecom industry is undergoing its most crucial time since the
deregulation of the telecom industry back in 2004. Amid spectrum auction of 3G
and 4G licenses, there have been serious confusions – particularly amongst the
media – which is not only causing serious damage to the people of Pakistan but
to our economy as well.
Through this post we will try to help you understand 3G, 4G and the whole
auction process, in plain simple language.
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| 3G / 4G Process |
What is 3G / 4G?
For an easy understanding, 3G and 4G are wireless technologies that enable
mobile phone users to get high-speed internet on their cellular devices.
Practically speaking, 3G technology allows operators to offer wireless
broadband speeds of 512Kbps to 2Mbps, while with 4G technology, operators can
offer from 2Mbps to 10-15Mbps internet speeds. (P.S. Theoretical speeds for 3G
and 4G are different to what are mentioned here)
Internet’s speed with 3G and 4G depends on your distance from the cell site
and number of users connected with the particular cell site. The nearer you are
from the cell site, the higher the speed and vice versa. Similarly lesser
number of users on a cell site means higher speeds and vice versa.
So basically its just the addition of wireless broadband services that we
will get with 3G and 4G. However, with this broadband on mobile phones the
entire echo system is going to get reshaped.
For example, you will be able to enjoy Video calling through Skype or other
similar apps, browse websites on the go, make financial transactions online,
collaborate with colleagues, and so on.
A practical example is about shooting a video with your smartphone and then
sending it to your news-room instantly. The whole process will require just a
phone and a 3G/4G connection and you are all set to report for virtually
anything – that too without the high-tech TV Van with VSAT connectivity and
all.
Basic Information
In order to offer 3G and 4G services operator needs a spectrum. The
Government of Pakistan decided to auction this required spectrum from 2100Mhz
and 1800Mhz bands for 3G and 4G services respectively.
If you aren’t familiar with the term spectrum then please
click on
this link to know what spectrum means and how it is used for telecom
services.
Spectrum is a limited resource, i.e. its not unlimited and hence it is
considered a valuable national asset. Spectrum is always auctioned through
bidding, unlike LDI or Local Loop licenses, just because a government can sell any number of LL licenses (because you don’t need any
limited resource for LDI or LL); however this is not the case with
spectrum.
Therefore, we will have this auction for spectrum taking place for 2100 and
1800Mhz bands.
Operators were invited to bid for the said spectrum through which they will
be able to offer wireless broadband services.
Available Lots
Government of Pakistan allocated 30Mhz from 2100Mhz band for 3G licenses
while 20Mhz from 1800Mhz for 4G licenses. This allocated spectrum from both
bands is then divided into Lots that are put on sale through auction.
Lot details are as following:
- Lot A:
- One
3G spectrum of 10 MHz from 2100Mhz
- One
4G spectrum of 10 MHz from 1800Mhz
- Lot B:
- One
3G spectrum of 10 MHz from 2100Mhz
- One
4G spectrum of 10 MHz from 1800Mhz
- Lot C:
- One
3G spectrum of 5MHz from 2100Mhz Band
- Lot D:
- One
3G spectrum of 5MHz from 2100Mhz Band
Base Price
- Base price
for 10Mhz block from 2100Mhz is US 295 million
- Base price
for 10Mhz block from 1800Mhz is US 210 million
Auction Process
Above mentioned lots will be auctioned separately, hence, operators were
asked to show their interests for the Lots mentioned above.
Here are the rules for bidding:
- Operators
must show interest in at least 10Mhz for both 3G and 4G spectrum
- Operators
can not show interest in more than 15Mhz for 3G spectrum and 10Mhz for 4G
spectrum
- All lots
are to be bought in a bundle. For example Lot A comprises of 10Mhz for 3G and
10Mhz for 4G spectrum, and hence the base price for Lot A would be US 505
Millions (base price of 10Mhz of 3G plus the base price of 10Mhz of 4G
spectrum).
With these rules in place, let’s assume few possible bids that operators
might have placed:
