3G Auction Scam – Beware Pakistan

Now, after wasting almost a year’s time, the government of Pakistan is again active in proceeding with the telecom auction of 3G spectrum. However, this time GOP or PTA has appointed three consultants for advising on the whole process of auction to ensure transparency (as being told to the general public).

In this regard, we invite the attention of all stake holders of this telecom auction, to the pit falls of the previous IM (information memorandum); and the terms of tender documents duly elaborated in my February 2012 open letter to the then PM Pakistan, Syed Yousaf Raza Gilani, reproduced as below for the benefit of the all concerned, to ensure that Pakistan is not cheated in the ensuing 3G telecom auction, planned in the coming weeks and months. Plus the mew IM must mention that any telecom company like Etisalat, will not be allowed to participate in the bidding process of the auction, if it is a defaulter of the GOP, notwithstanding the fact that it has gone to the court or got an stay order etc. Any such party must deposit the outstanding amount in lump sum. However, if at any later stage, the defaulting company gets courts order in its favour, the GOP must be bound to immediately return the disputed amount.

$10 Billion Impending 3G Auction Scam – My Open Letter to PM in February 2012, Still Relevant Today.

Honourable Syed Yusuf Raza Gilani,

AoA.

It will not be out of place to begin with a news item published in the news papers today i.e., Wednesday 1 Feb. 2012, stating that the Indian Supreme Court warned on Tuesday that corruption posed a “grave danger” to the world’s largest democracy quoted as below. Quote ” Today corruption in our country not only poses a grave danger for the concept of constitutional governance, it also threatens the very foundation of Indian democracy and the rule of law.” Unquote. The above was said by Justice A.K. Ganguly, while delivering a ruling in connection with the alleged underpriced selling of telecom licenses, which the national auditors says may have cost the country up to $39 billion.

An excerpt from a Times of India news published on Wednesday, 2nd Feb. 2012 is also given below for the information of Mr. Abdul Hafeez Sheikh, Finance Minister of Pakistan, who says he expects only $800 million from the COMBINED telecom auction of 3G, (4G LTE) and (5G LTE-A.) (India got IRS69 billion for ONLY 3G, exactly two years ago, as per TOI news quoted below.

“The 122 licences were given by Raja for over IRs 9,000 crore, while 3G auctions for a smaller number of licences had fetched the government a sum of IRs 69,000 crores.”

In the same context of selling of telecom licenses in Pakistan, a mega scandal is also brewing, for which your kind attention is invited to immediately intervene, so that the nefarious designs of unscrupulous elements to defame the PPP and its government, is nipped in the bud.

DETAILS OF THE CASE

With the recent publication of the advertisement of PTA in the news papers for “Invitation for Expression of Interest” (EOI) with application for AUCTION of Mobile License/Spectrum (3G/4G/LTE [long term evolution] etc), the following questions needs answers to safeguard the national interest by all and sundry.

1. Why the LOW base price of US $ 155 Million for one Mobile Cellular License/Spectrum (800 MHz), when this license was sold for 291 US $ Million eight years ago in the year 2004? OK, it is being auctioned for 8 years instead of 15 years, but is there no premium for above 68 % mobile teledensity which was not there eight years ago?

2. Why the license will be technology neutral? Which means no licenses will be required for any future launches of 4G, 5G so on so forth. this also means selling all future long term evolution inductions free of cost. This happens no where in the world. Even in Pakistan when 2G was sold in 2004, it was not permitted to launch 3G without fresh license. So why now 4G onwards is being sold free of cost?

3.i. Why the LOW base price of US $ 210 Million for the auction of Three Mobile Cellular Licenses/Spectrum (1900/211MHz/3G/4G/LTE etc.)?

3.ii. Here it should be noted that 2G license was auctioned by PTA in 2004 at US $ 291 Million, when there was much less teledensity than 68% as of now and in the next 15 years (the period for which new licenses are being auctioned), it will obviously increase to higher levels.

3.iii. And above all this auction is technology neutral, which means license for 3G is also valid for FREE for 4G, 5G onwards. Under this situation this base price of US $ 210 Million is ridiculously low.

4. As per IM (Information Memorandum) on PTA website all three telecom companies winning the technology neutral AUCTION of Mobile License/Spectrum (3G/4G/LTE [long term evolution] etc) will be required to pay half of the bid value within 30 days in USD or PKR. Also Rest of the amount can be paid in USD or PKR in five equal yearly installments. This virtually means that Telecom companies will NOT bring any fresh foreign investment and also the remaining 50% amount will be deposited on PAY AS YOU EARN basis. This tantamount to robbing the nation of valuable FDI in the garb of auction terms, particularly when bidding is only allowed in minimum 2 million USD and maximum 10 million USD. So when bidding is in USD, then why NOT payment should also be in USD?

5. Why PTA has shown less figures of total Teledensity of Pakistan (68.39) in 2010-11 at para 3.7 of (IM [information memorandum] on its website) whereas, according to its own figures in the graph shown in the para 3.7, the total comes to (68.43)?

6. Why the PTA advertisement published in the news papers of 24 January, 2012 states mobile teledensity as 62% against the figures of 64.9% shown in IM at their website?

7. Indian economy is about 7-9 times bigger than Pakistan, but it got IRS69 billion, that too, in April 2010, from it’s auction of ONLY 3G. Why our Finance Minister has kept a budgeted amount of ONLY $800 million as expected income from the auction of NOT only 3G but 4 & 5G as well?

Submitted for consideration and immediate corrective action before it is too late.

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It was reported recently on a TV channel, that Finance Minister Abdul Hafeez Sheikh expects 800 million USD revenue, from the auction of 3G (fast Internet) license to telecom companies.

It is also reported that government has fixed the base price for auction to held on March 28 and 29, 2012 for 3G and 4G as 210 million USD. Whereas, 8 years ago 2G was sold at 291 million USD. (Please check and confirm this data from PTA).

Here, I must forewarn all and sundry, that under no circumstances, the worth of this auction amount can be less than 10 billion dollars. India got IRS69 billion from the same auction in April 2010 i.e. two years ago. Details are available at link:- https://www.snayyar.com/3g-telecom-technology-pakistan-can-earn-billions-of-usd-by-just-selling-air.html.

It will not be out of place to state that as reported today i.e., Wednesday 1 Feb. 2012 the Indian Supreme Court warned on Tuesday that corruption posed a “grave danger” to the world’s largest democracy quoted as above.

All patriotic citizens and institutions must be alert, lest we may not be cheated again, by those who sold our valuable national assets, for even less than the peanuts, in Musharraf era.

Tags: 3g, auction, India, Pakistan, pta, scam, telecom