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
Pakistan, Iran agree to strengthen bilateral ties to tackle regional militancy
- Pakistan’s planning minister meets Iran’s Ambassador to Pakistan Dr. Raza Amiri Moghaddam
- Pakistan, Iran both blame each other for not doing enough to root out militancy in border areas
ISLAMABAD: Pakistan’s Planning Minister Ahsan Iqbal and Iran’s Ambassador to Pakistan Dr. Raza Amiri Moghaddam on Thursday agreed to strengthen bilateral relations between their countries to reduce militancy in the region, state-run media reported.
Pakistan and Iran are often at odds with each other over instability on their shared border. Both countries have routinely blamed each other for not rooting out militancy. Small separatist groups in Pakistan have been behind a long-running insurgency, calling for gas and oil-rich Balochistan’s independence from the central government in Islamabad.
Pakistani anti-Iran militants have also targeted the Iranian border in recent years, increasing friction between the countries.
“Pakistan and Iran have agreed to strengthen bilateral relations to reduce tendencies of terrorism and extremism in the region,” the state-run Radio Pakistan said.
Radio Pakistan said the agreement to bolster bilateral ties was reached between Moghaddam and Iqbal during a meeting in Islamabad.
“The Planning Minister emphasized the importance of enhancing connectivity through trade routes, considering the 900-kilometer shared land and maritime border,” he said.
Tensions reached a head in January between Pakistan and Iran after they exchanged airstrikes against alleged militant targets in each other’s territories. Both countries since then have made efforts to ease tensions and promote bilateral trade with each other.
Pakistan’s stock exchange closes at all-time high amid expectations of fresh IMF deal
- Pakistan Stock Exchange closes at all-time high of 67,142.12 points, registering an increase of 594.34 points from Wednesday
- Analysts link recent surge to possibility of Pakistan reaching another bailout agreement with IMF, privatizing national airline
ISLAMABAD: The Pakistan Stock Exchange (PSX) witnessed its highest closing in history on Thursday as the benchmark KSE-100 index closed at 67,142.12 points, with analysts linking the recent surge to market expectations of the possibility of a successful deal with the International Monetary Fund (IMF) for another bailout program.
The benchmark index settled at 67,142.12 points on Thursday at the close of trading, registering an increase of 594.34 points or 0.89 percent. This makes it the stock market’s highest closing in history, the previous highest being 66,547.78 points a day earlier.
Pakistan and the International Monetary Fund (IMF) reached a staff-level agreement last Wednesday which would pave the way for the release of $1.1 billion for the cash-strapped South Asian country. Pakistan has expressed its interest in securing a new loan under the Extended Fund Facility (EFF) program with the IMF.
Financial expert and journalist Faseeh Mangi said the Pakistan Stock Exchange is one of the best performers in the world “in a rally that started last year after Pakistan avoided a default.”
“The latest surge is on possible IMF deal, PIA sale,” Mangi wrote on X on Wednesday, referring to the government’s plans to privatize Pakistan International Airlines, its national airline.
Topline Securities’ Deputy Head of Sales Ali Najib said the index had finally breached the 66,000 barrier, saying it could be attributed to “positive vibes from the IMF, rejuvenated foreign interest at historically low valuations and progress on SOE privatization.”
Shehbaz Sharif, who was elected prime minister for a second term earlier this month, faces the daunting challenge of negotiating a long-term financial bailout program with the IMF. Pakistan’s fragile $350-billion economy is in desperate need of external financing to shore up its foreign exchange reserves and escape a looming macroeconomic crisis.
For Pakistan, committing to a new IMF program, however, will mean committing to steps needed to stay on a narrow path to recovery. This would limit policy options to provide relief to a deeply frustrated population and cater to industries that are looking for government support to spur growth.
Inflation touched a high of 38 percent with record depreciation of the rupee currency under Sharif’s last government from April 2022 to August 2023, mainly due to structural reforms necessitated by the IMF program. Pakistan continues to be enmeshed in economic crisis with inflation remaining high, hovering around 30 percent, and economic growth slowing to around 2 percent.
Tickets for Pakistan’s home series against New Zealand to go on sale from tomorrow
- Pakistan will play against New Zealand in Rawalpindi and Lahore venues from April 18-27
- Series will help prepare both sides for the upcoming T20 World Cup 2024 in USA and West Indies
ISLAMABAD: The tickets for Pakistan’s upcoming T20I home cricket series against New Zealand will go on sale from tomorrow, Friday, the Pakistan Cricket Board (PCB) said in a statement on Thursday.
The five-match series is scheduled to be played in Rawalpindi on April 18, 20 and 21 and in Lahore on April 25 and 27.
“In the first phase, the pre-booking of the online tickets will start on Friday at 5pm at pcb.tcs.com.pk,” the PCB said. “The sale of physical tickets along with outlet addresses will be announced in due course.”
The PCB said tickets for the Rawalpindi leg of the matches will be available at a minimum cost of Rs500 ($1.80) and the maximum will be available for Rs7,500 ($26.98) for the VVIP Gallery. Additionally, hospitality seats will be available at a maximum amount of PKR 15,000 ($53.97) except for the first T20I where the hospitality seats will be available for PKR 12,000 ($43.17).
For the Lahore leg, ticket prices start at Rs300 ($1.08) for the general seats while the maximum ticket prices will be Rs6,000 ($21.59) for the fourth T20I while Rs7,000 ($25.19) for the fifth T20I (VVIP Gallery).
The series will be important for both sides as they gear up for this year’s ICC T20 World Cup 2024 which is scheduled to be held in June in the USA and West Indies.
Pakistan will lock horns with arch-rivals India on June 9 for a big-ticket clash at New York.
Pakistani interior minister, KP CM vow to improve coordination amid surge in attacks
- Five Chinese nationals were killed in northwestern Pakistan on Tuesday in a bombing
- Interior minister, KP chief minister vow to bring perpetrators of attack to justice
ISLAMABAD: Pakistan’s interior minister and Khyber Pakhtunkhwa (KP) Chief Minister Ali Amin Gandapur on Thursday vowed to strengthen coordination between the center and the province to improve the law-and-order situation, the KP CM’s office said, amid a surge in terror attacks in the province.
Interior Minister Mohsin Naqvy arrived in Peshawar to meet Gandapur on Thursday to review the province’s law and order situation two days after five Chinese nationals and their Pakistani driver were killed in the country’s volatile northwest.
The incident took place in KP’s Shangla where a bomber rammed his explosive-laden car into the vehicle of Chinese engineers and construction workers on Tuesday.
The attack occurred in an area vital to the China-Pakistan Economic Corridor (CPEC), which encompasses various mega projects crucial for Pakistan’s economy. The victims were en route to Dasu Dam, Pakistan’s largest hydropower project, when they were targeted.
“To improve the law-and-order situation in the province, both agreed to improve the coordination between law enforcement institutions on the federal and provincial levels,” a statement from the KP chief minister’s office said.
The two condemned the attack on the Chinese nationals and expressed their condolences to Beijing and the families of those who had been killed in the attack.
“The two expressed their resolve to bring all those involved in the incident to justice and put an end to terrorism,” the statement said.
Gandapur said it was his government’s top priority to ensure law and order in the province and to safeguard people’s lives.
Pakistan’s foreign office said on Thursday that Islamabad had enhanced the security of Chinese nationals after the attack.
Foreign Office Spokesperson Mumtaz Zahra Baloch said both Pakistani and Chinese governments were in contact after the tragic incident on March 26, adding they were fully committed to bringing the terrorists, along with their facilitators and abettors, to justice.
No group had claimed responsibility for the attack but suspicion was likely to fall on separatists and the breakaway Gul Bahadur faction of the Pakistani Taliban, known as Tehreek-e-Taliban Pakistan or TTP.
The TTP is a separate group, but a close ally of the Afghan Taliban.
The TTP denied being behind the suicide bombing in a statement Wednesday, saying: “We are in no way related to the attack on the Chinese engineers.”
Tuesday’s attack came less than a week after Pakistani security forces killed eight Balochistan Liberation Army separatists who opened fire on a convoy carrying Chinese citizens outside the Chinese-funded Gwadar port in the volatile southwestern Balochistan province.
Pakistan says security of Chinese nationals enhanced after deadly attack
- Pakistan’s foreign office says the government fully understands Chinese security concerns after the attack
- It points out Pakistan has built a fence, introduced one document regime to secure its border with Afghanistan
ISLAMABAD: Pakistan’s foreign office said on Thursday the government has further enhanced the security of Chinese nationals only days after a deadly suicide bombing killed five of them along with their Pakistani driver in the country’s volatile northwest.
The incident took place in Shangla, located in Khyber Pakhtunkhwa province, where the bomber rammed his explosive-laden car into the vehicle of Chinese engineers and construction workers on Tuesday.
The attack occurred in an area vital to the China-Pakistan Economic Corridor (CPEC), which encompasses various mega projects crucial for Pakistan’s economy. The victims were en route to Dasu Dam, Pakistan’s largest hydropower project, when they were targeted.
“I can reassure you that Pakistan has further enhanced the security of Chinese nationals,” foreign office spokesperson Mumtaz Zahra Baloch told reporters in a weekly media briefing in Islamabad.
She said both Pakistani and Chinese governments were in contact after the tragic incident on March 26, adding they were fully committed to bringing the terrorists, along with their facilitators and abettors, to justice.
“At this point, we are focusing on investigating the terror attack and ensuring that the dead bodies of the deceased are transported to their home country,” she added. “This is the first priority at this stage.”
Asked about the security concerns raised by the Chinese officials following the attack, Baloch said the Pakistani government fully understood their concerns.
“We are engaged with the Chinese officials at very senior level to discuss the arrangements for the safety of Chinese nationals and for the investigation of this particular terror incident,” she informed.
The foreign office spokesperson said Pakistan would continue to work with the Chinese authorities to ensure the safety and security of Chinese nationals, projects and institutions in Pakistan.
“We have no doubt that the … terror attack [in Shangla] was orchestrated by the enemies of Pakistan-China friendship and together, we will resolutely act against all such forces and defeat them,” she emphasized.
In response to a question regarding Defense Minister Khawaja Muhammad Asif’s statement regarding the necessity for stronger border controls between Pakistan and Afghanistan, she clarified he was elaborating measures already taken by Pakistan to regulate travel between the two neighboring countries.
“Pakistan-Afghanistan border is an important border, and Pakistan has, over time, taken several measures to secure the border, including erecting a fence along the border,” she continued.
“Pakistan has also introduced one document regime under which individuals can travel to Pakistan on the basis of valid visas on their passports,” Baloch added.