ISLAMABAD/KARACHI: The Pakistan Telecommunication Authority has informed the country's biggest mobile network, Jazz, and second-largest telecoms firm, Telenor, that their licences will stand expired on August 21 if the companies do not agree to pay a renewal fee of $450 million as per the PTA’s terms and conditions, PTA and Jazz officials said this week.
Pakistan’s telecoms market was deregulated in 2004 and foreign firms such as Jazz have invested heavily. But now the company fears the new renewal fee, which it says goes against an agreement struck in 2004, will pose a significant risk to the connectivity of millions of Pakistanis and jeopardize a growing digital economy.
According to PTA figures as of April 2019, Pakistan has 161 million cellular subscribers, with 59.2 million using Jazz and 44.8 million on Telenor.
“The decision by PTA to expire the licences of operators on August 21, 2019, if not renewed on their terms, is indeed concerning,” Ali Naseer, Chief Corporate and Enterprise Officer at Jazz, told Arab News in an interview this week. “This can potentially disrupt services for millions of Pakistani cell phone users.”
A Telenor spokesman did not respond to repeated calls for comment but a PTA directive to Telenor dated July 22 and seen by Arab News orders the company to pay the $450 million renewal fee by the August 21 deadline and on the PTA’s terms, or risk discontinuation of operations.
Mobile technology is the primary means of communication for millions of Pakistanis. Recent intelligence research by the GSM Association, a trade body that represents the interests of mobile network operators worldwide, estimated the total economic impact of mobiles on Pakistan’s economy was $17 billion, or 5.4% of GDP.
In 2017, total direct tax and fee payments by the mobile sector were estimated at $950 million, 29% of operator revenue, and the wider mobile ecosystem contributed a total of $1.9 billion in direct and indirect taxes in 2018, as per the GSM Association. A tax directory issued by the Federal Board of Revenue for tax year 2017 listed Telenor and Jazz among the country's top corporate taxpayers.
Pakistan’s government is currently struggling to lift revenues, cut ballooning public debt and raise foreign reserves. A recently signed loan agreement with the International Monetary Fund is aimed at shoring up fragile public finances and strengthening a slowing economy.
“It’s important that Pakistan doesn’t ... place gaining inflated revenues from spectrum licences above the connectivity of its citizens,” Brett Tarnutzer, Head of Spectrum at GSMA, said. “Spectrum prices and taxes should be set at a sufficiently low level that allows operators to deliver affordable services and deploy mobile broadband widely.”
“NEGLIGENCE AND INCOMPETENCE”
The licences of both Jazz and Telenor were originally set to expire on 25 May. In early May, the two companies took PTA to court after the Authority asked them to pay a $450 million renewal fee, more than double the dollar price at which the operators originally acquired licences at auction in 2004.
At the heart of the court challenge between the telecom firms and the Pakistan government is a 2015 telecommunications policy that replaced a 2004 version and which Jazz and Telenor say outlined the terms and conditions for auctions of new spectrums but did not lay down any guidelines regarding renewals.
Globally, licence renewal terms are to be communicated to operators 18 months before a licence is due to expire. According to PTA documents seen by Arab News, the Authority came up with new terms on May 9, a little over two weeks before the May 25 deadline and after Jazz and Telenor had taken the matter to court.
“That is the first example of negligence or incompetence because now, in 2019, when the renewals were due, we found ourselves in a situation where there is no framework,” Naseer said. “Had they [government] come out with a reasonable policy, we would have accepted that because we want predictability. Jazz is now 25 years in the market, we are one of the largest foreign direct investors in the country, we’re not going anywhere in a hurry. We are beholden to the country and we want to work and progress.”
Jazz also says that it communicated its intention to renew its licence 30 months prior to the May 25 expiry deadline, as specified in the licence terms. PTA was then required to inform the operators about the renewal terms and conditions within three months of receiving their intent for renewal, which the Authority did not. In the absence of a new set of guidelines formulated and communicated within the deadline as set by the law and the licence terms, Jazz and Telenor argued in court that the 2004 licence terms and conditions should continue to apply to the latest renewal.
After several hearings, the Islamabad High Court remanded the case back to PTA last month, asking the Authority to review the terms of renewal with a “fresh eye.” After quasi-judicial hearings for both Jazz and Telenor, PTA concluded on July 22 that the telecom operators would have to pay the set price of $450 million by August 21.
PTA directives to Jazz and Telenor seen by Arab News said payment terms for the $450 million renewal fee would be 100% upfront or 50% upfront with the remaining 50% paid in five equal annual installments on the London Interbank Offered Rate, plus 3%. The payment could be made in USD or its equivalent in Pakistani rupees, calculated at the market exchange rate at the time of payment.
“We are disappointed that PTA has not been able to see our point of view on these renewals,” Naseer said. “We are committed to endeavour towards improved connectivity and an enabling digital environment in Pakistan.”
A PTA spokesman declined repeated requests for an interview and only referred to public documents about the licences.
“EVALUATING ALL OPTIONS”
The decision by Pakistan’s cash-strapped government to set the new renewal fee in US dollars and not in local rupee currency, which has lost about 40 percent against the dollar in the last 20 months, is another major sticking point for the mobile operators.
The 2004 auction for a 15-year licence cost $291 million, equivalent to Rs17 billion at the 2004 exchange rate. But with the rupee plunging to record lows against the dollar, Jazz now faces paying Rs67 billion for $450 million, a 265% increase compared to what Jazz paid in 2004.
Naseer said the company earned and charged customers in local currency, not dollars, and thus setting the renewal fee in dollars was “unsound.”
“We believe in Pakistan and if word gets out that existing investors are being treated like this it makes it very difficult for us to say ‘Pakistan is open for business’,” Naseer said.
Jazz says it is now evaluating the option of renewing its licence at the PTA’s asking price, letting it expire or filing an appeal with the Islamabad High Court before August 22. Telenor’s options are similar.
“Honestly, at this stage we are evaluating all our options,” Naseer said. “Nothing has been ruled out.”
Pay $450mln renewal fee or licences expire on Aug 21, PTA orders Jazz and Telenor
Pay $450mln renewal fee or licences expire on Aug 21, PTA orders Jazz and Telenor
- Pakistan’s biggest and second-largest telecom firms have taken the government to court over the renewal process and price
- Companies believe licence price hike goes against a 2004 agreement and have challenged the PTA for setting the price in USD
President Biden’s first contact with PM Sharif signals support amid regional challenges
- Biden’s letter is the first top-level contact between the two countries in a long time, signifying a thaw in their frosty ties
- The US president describes the partnership between the two countries’ people as ‘crucial for global and local security’
ISLAMABAD: In the first top-level contact between the United States and Pakistan in years, President Joe Biden assured Prime Minister Shehbaz Sharif on Friday of his administration’s full support in addressing the critical challenges facing the region.
Biden’s letter to Sharif signifies a thaw in the frosty US-Pakistan relations following the strained ties during the withdrawal of international forces from Afghanistan and the subsequent allegations by Pakistan’s former premier Imran Khan of a US conspiracy against his administration.
The US president’s outreach marks a notable shift from the previously perceived indifference, evident in the absence of direct communication with Khan’s government.
The correspondence underscores a potential recalibration of bilateral relations, with the US president describing the partnership between the two countries’ people as “crucial for global and local security.”
“The US will stand with Pakistan in facing the most critical challenges of the time and region,” Biden was quoted as saying in an official statement released by the Pakistani authorities. “Public health protection, economic growth and education for all are shared visions that will continue to be promoted together.”
The US president also highlighted various areas where the two countries have been working together while promising to strengthen their joint efforts.
He specifically mentioned the US-Pakistan Green Alliance Framework, saying his administration would continue to work with Pakistan for environmental improvement.
Biden also spoke of sustainable agricultural development, water management and recovery from the devastating effects of the 2022 floods in Pakistan.
He also expressed dedication to protecting human rights and promoting development together with Pakistan amid previous US concerns over freedom of speech and expression in the wake of period social media disruptions in the South Asian country.
“The strong partnership established between the two nations will be strengthened,” he said in the letter.
Pakistan’s finance minister eyes fresh IMF loan deal by fiscal year-end
- Muhammad Aurangzeb plans to discuss the contours of the new loan program during his meetings in Washington
- Pakistan has successfully completed the second and final review under a short-term IMF agreement for $1.1 billion
ISLAMABAD: Pakistan plans to reach a staff-level agreement with the International Monetary Fund (IMF) for a new loan program by the end of the current fiscal year, said finance minister Muhammad Aurangzeb on Friday, adding the issue would come up for discussion in his upcoming meetings in Washington.
Pakistan successfully completed the second and final review under a short-term IMF stand-by arrangement amounting to $3 billion earlier this month, clearing the way for the disbursement of the final tranche of nearly $1.1 billion.
However, the country’s fragile $350-billion economy continues to be in desperate need for external financing to shore up its foreign exchange reserves and escape yet another macroeconomic crisis. This was also indicated by Prime Minister Shehbaz Sharif who pointed out it was “inevitable” for his government to seek further IMF assistance after taking over the top political office of his country.
The Pakistani finance minister said he was going to attend the spring meetings in Washington where he would meet the IMF and World Bank officials and discuss the contours of a fresh Extended Fund Facility (EFF).
“Those discussions will go into end April, into May,” he informed. “We can expect, because no final discussion or agreement [with IMF] has taken place yet, but it is our desire that by the time we wrap up this fiscal year, so end June, early July, we at least reach the staff-level agreement [for the EFF].”
Committing to a new IMF program will require Pakistan to implement steps needed to stay on a narrow path to recovery. The country has already tried to implement stringent economic reforms like raising fuel and power rates that have led to spiraling inflation in the country.
Getting into another IMF program would further limit the government’s policy options to provide relief to a deeply frustrated population and cater to industries that are looking for government support to spur growth.
PCB meets to discuss national team captaincy amid reports of Babar Azam comeback
- Meeting takes place amid widespread speculation Babar could take over as Pakistan captain for upcoming T20 series against New Zealand
- Babar stepped down as all-format captain last November following the team’s failure to reach ICC Men’s World Cup semifinals with five defeats
KARACHI: The chairman of the Pakistan Cricket Board (PCB) met the body’s selection committee and other key officials to discuss the national team’s captaincy, the PCB said on Friday, amid reports former all-format captain Babar Azam’s name was under consideration for the position.
PCB Chairman Mohsin Naqvi chaired the meeting at the PCB headquarters in the eastern city of Lahore, according to the cricket board.
PCB Chief Operating Officer Salman Naseer, Selection Committee members Muhammad Yusuf, Wahab Riaz, Abdul Razzaq and Bilal Afzal, and PCB International Cricket Director Usman Wahla attended the conference.
“The members of the selection committee made recommendations to Chairman PCB Mohsin Naqvi about the captain of the national cricket team,” the PCB said in a statement.
“Coaches were also consulted at the meeting.”
Local media has widely speculated this week that Babar could make a comeback as Pakistan captain in the upcoming five-match T20 series against New Zealand.
The series is scheduled to be played in Rawalpindi on April 18, 20 and 21 and in Lahore on April 25 and 27.
The PCB, under former chief Zaka Ashraf, had appointed Shaheen Shah Afridi as Pakistan captain for the limited-over format after the national team’s poor show at the 2023 ICC Men’s Cricket World Cup in India. Shan Masood was given the Test captaincy at the time.
In November last year, Babar announced he was stepping down as all-format captain following the team’s failure to reach the World Cup semifinals with five defeats — including a seven-wicket mauling by India in front of more than 100,000 fans — and four wins. The team also lost to Afghanistan for the first time.
Babar was particularly under fire for the poor show of a team that was ranked as the world’s top ODI side before the tournament.
This was the fifth time in the last six World Cups that Pakistan failed to reach the semifinals.
Babar was appointed T20I and ODI captain in 2019 before eventually captaining the Test side since 2020.
Pakistan briefs Chinese investigation team on security measures after deadly suicide bombing
- Five Chinese nationals were killed on Tuesday in northwestern Pakistan when a suicide bomber targeted their vehicle
- Pakistan has since then enhanced security for Chinese personnel in the country, vowed to punish culprits of the attack
ISLAMABAD: Pakistan’s Interior Minister Mohsin Naqvi on Friday briefed a Chinese investigation team on a suicide attack in Pakistan’s Shangla, which killed five Chinese nationals this week, promising to bring to justice the perpetrators of the deadly bombing.
Five Chinese nationals and their Pakistani driver were killed on Tuesday in the northwestern Pakistani district of Shangla, when a bomber rammed his explosive-laden car into their vehicle.
The victims were en route to a hydropower project when the attack occurred in an area vital to the Chine-Pakistan Economic Corridor (CPEC), part of Beijing Belt and Road Initiative (BRI).
Naqvi visited the Chinese embassy in Islamabad to brief the special investigation team that arrived from China, according to the Pakistani interior ministry.
“In the meeting, measures for the protection of Chinese citizens and overall security were discussed,” Naqvi’s ministry said in a statement. “The real culprits of the Shangla attack will be brought to justice,” the statement quoted the minister as saying.
Naqvi also met the Chinese ambassador and shared with him updates regarding the attack, according to the statement.
Tuesday’s attack came less than a week after Pakistani security forces killed eight Balochistan Liberation Army (BLA) separatists, who opened fire on a convoy carrying Chinese citizens outside the Chinese-funded Gwadar port in the volatile southwestern Balochistan province.
Hundreds of Chinese engineers and technicians have been working on projects, primarily in Pakistan’s northwest and southwest, under CPEC — a network of roads, railways, pipelines and ports in Pakistan that will connect China to the Arabian Sea and help Islamabad expand and modernize its economy.
Beijing has pledged to invest over $65 billion in energy and infrastructure projects in Pakistan as part of the corridor.
The interior minister’s meeting with the Chinese team came a day after Chinese foreign ministry spokesperson Lin Jian said his government believed Islamabad would hold accountable the perpetrators of the deadly attack.
“The Pakistani side is working intensively to investigate and handle the aftermath and has taken concrete steps to enhance security for Chinese personnel, projects and institutions,” Lin told reporters during a press briefing.
“We believe Pakistan will get to the bottom of the attack and bring the perpetrators to justice as soon as possible.”
In a first, foreign minister replaces finance chief in Pakistan’s largest decision-making body
- The CCI decides matters like distribution of natural resources upon which there is disagreement between center, provinces
- Members of the council include four provincial chief ministers as well as foreign, defense and frontier regions ministers
ISLAMABAD: The Pakistani government this week constituted the Council of Common Interests (CCI), with the foreign minister replacing the finance chief in the decision-making body.
The CCI is a constitutional body and its members are appointed by the president on the advice of the prime minister. The council resolves power-sharing and other disputes between the federation and the provinces.
Members of the council include four provincial chief ministers, Foreign Minister Ishaq Dar, Defense Minister Khawaja Asif, and State and Frontier Regions Minister Ameer Muqam, according to a government notification.
“In exercise of the powers conferred under Article 153 of the Constitution of Islamic Republic of Pakistan, the president, on the advice of the prime minister, has constituted the Council of Common Interests, with effect from 21st March,” read the notification dated March 25.
“This supersedes Secretariat of CCI’s notification of even number, dated 9th January.”
The CCI is the largest decision-making body in the country that decides matters like the distribution of natural resources, upon which there is a disagreement between the center and provinces.
The top forum is headed by the prime minister.