Loud Thinking

Posts Tagged ‘auction’

Mian Muhammad Nawaz Sharif Sb.

Salaam.

Today (31 May, 2013) it has been reported that ministry of finance expects to earn $1 billion from the auction of 3G telecom license, during the first three months of your government. Link:- http://jang.com.pk/jang/may2013-daily/31-05-2013/u148138.htm

In this regard, some facts are placed before you to judge for yourself that why this telecom auction can and must generate much more than $1 billion.

PPP government finance minister Abdul Hafeez Sheikh, had budgeted a figure of ONLY $800 million income in the FY 2011-12 (this is on record and can be confirmed from the documents), for which auction was planned in March, 2012, for NOT ONLY 3G but 4G LTE and 5G LTE-A.

Just imagine 4G LTE and 5G LTE-A were to be given free with the auction of 3G. Whereas, in April, 2010 India ONLY auctioned 3G, for a whooping amount of $15 billion. Now after over 3 years, this figure almost may be equal to $20 billion.

Here, the question arises was Indian economy or telecom density size (at that time in 2011-12 when Pakistan went for the aborted auction) was more than 18.75 times bigger than Pakistan’s economy and telecom density? Sir, all this gap was to be made up with corruption and corruption alone.

Plus the mother of all corruption was the plan (clearly written in the tender that 4G LTE and 5G LTE-A license was to be given free along with 3G) to plunder the national wealth with future telecom technology licenses, to be gifted free of cost.

Here, again the question arises that when in the year 2004 Pakistan auctioned the 2G telecom license we didn’t give 3G license for free. And now when in 2012, we went for the auction of 3G, why advance technologies of the future were being given for FREE. (currently we are on 2G, whereas Kabul, India has 3G and Oman 4G LTE).

In view of the foregoing, I am more than 100% sure that now when we are entering middle of the year 2013, if the 3G (along with 4G LTE & 5G LTE-A) auction is done in an intelligent, smart and honest manner, Pakistan can very easily fetch anything between 2-5 billion USD.

Last but not the least, I would humbly like to inform that by the grace of Allah, first I single handedly convinced the government in 2011 to go for the auction of the 3G license. And, later on again in the year 2012, I had to wage a full fledged war to stop the government after the issuance of tender, to abort their nefarious designs and plans to indulge in mother of all corruptions.

In this regard, I had the FULLEST support from Senator Pervaiz Rashid and Ms Anusha Rehman & Prof. Ahsan Iqbal Sahab. Geo, Dunya & Ary TV media also fully supported me in this Jihad against the mother of all scandals. Moreover, Mr. Zahid Malik of Pakistan observer and Transparency International Pakistan, also played a very active part in stopping the government going the wrong way in this case. My salute to all these patriotic Pakistanis.

Best regards,

Syed Nayyar Uddin Ahmad

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.

—————————————
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.

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 $69 billion for ONLY 3G, exactly two years ago, as per TOI news quoted below.

“The 122 licences were given by Raja for over Rs 9,000 crore, while 3G auctions for a smaller number of licences had fetched the government a sum of Rs 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 2002? 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 2002 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 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. India is not 70 times bigger than Pakistan in economy or any way, but it got $69 billion, that too, two years ago, 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.

————————————————

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 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 69 billion USD 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 below.
 
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.

Pakistan passed the 100 million subscriber milestone in Oct 2010, with five operators fighting for the market share day in & day out, but  still waiting for the introduction of 3G WCDMA technology (High Internet Speed Mobile Access with International Roaming),  to take the telecoms market to the much needed next level.

The 3G Licenses auctioned last year in our neighboring country fetched multi billion dollars, in license fee in addition to a similar amount of foreign direct investments, creating a spree of jobs for not only the highly educated, but also for the less educated  skilled hands, working on things like tower construction.

The question remains why we are shying away from this golden opportunity, to give the much needed life saving shot to our economy?

May be the reason lies in the situation, where the current operators are shying away from the investments that they would have to make, when the licenses are made available and are just keeping a few individuals at the right places “happy”, so that it is deferred, as long as they wish.

With the 3G services available in most of the countries of South Asia and even Africa, why  we are being deprived of the technological and economical benefits and playing the catch up game?

The 3G License or Spectrum auction, which is just like selling “air” is the easiest way to slightly mitigate the ever increasing unemployment rate in the country. Our peoples representatives in the both the houses should take this up seriously, to expedite the ever delayed process.

                                                                                        By A. Muiz Khan

                                         An update by the writer

Although, 100 Million subscribers may seem a big figure in absolute terms yet, in the backdrop of Pakistan, this amounts to only about 60% Mobile penetration; which is far from saturation, with some developed countries having around about the 100% mark. These figures are obtained after the implementation of the standard active subscriber definition in the industry, which has forced the operators to adopt data cleaning process, so the data comes mostly from the active subscribers, hence, a fairly accurate estimate.

Now, the point of adopting 3G is not necessarily to add new subscribers. But if 60 people out of 100 have mobile connections, then to make lets say initially, 15 people out of the active 60, to switch to using the new technology. This will generate new high profit margin revenue streams from data intensive applications, like video calling & HD Video streaming etc.

Now, we as a country can benefit from this situation, by putting the technology on the table for Sale. Surely the existing operators cannot shy away from spending on the candy bar, which will ensure a greater revenue stream for them. However, their aim is to delay it as much as possible, so that they do not have to take out cash at this moment of the financial crunch.

Once we put the technology or as stated in the article “AIR” on sale, we will get instant payments from the operators on acoount of license fee and as the race to launch the first 3G network kicks off to obtain the First-Mover advantage, huge FDI (Foreign Direct Investment) will take place in modernizing and building the network infrastructure, resulting in effective billions of dollars in earnings and creating thousands of jobs in the process.

In the recent auction of the 3G licenses in our neighboring country, only the licenses fee fetched close to USD 15 Billion, which is a huge amount in itself, excluding all the FDI and other positive impacts on the economy, like reduction in unemployment rate.

                                                                                       By A. Muiz Khan