Pakistan raises $1.1 billion with 3G, 4G licence auction

Pakistan on Wednesday raised more than $1.1 billion in its long-delayed auction of next-generation telecommunications licences, snapped up by the country's four existing mobile network providers.

The government sold off four licences to provide 3G services, which allow broadband-speed internet on mobile phones, and one for superfast 4G connections.

The total is close to the $1.2 billion estimated for the sale in the federal budget for 2013-14 but below a bullish prediction of $2 billion made by Finance Minister Ishaq Dar in January.

The government of Prime Minister Nawaz Sharif was elected last year on a platform of boosting Pakistan's floundering economy and ministers hope the licence sale will bring a boost by improving communications.

Pakistan has more than 132 million mobile phone subscribers but has lagged behind its neighbours in setting up 3G, which is now the norm in many countries.

Even Afghanistan, Pakistan's far less developed western neighbour with a weaker economy and more fragile state, has had the technology since 2012.

The successful bidders for 3G services were Norway's Telenor, Russian-owned Mobilink, Ufone, owned by the Pakistani government, and Zong -- part of China Mobile.

All four operators are already established players in the Pakistani mobile market.

Zong also won one of two licences available for 4G services. The second will be auctioned later.

GDP boost

Sikanadar Naqi, a Zong advisor, told AFP the company would begin 3G services in the cities of Lahore and Karachi immediately.

The final bids for the 3G licences totalled $902.82 million, while the 4G licence went to Zong for the reserve price of $210 million.

Dar said the government would receive half of the money up front and the rest in five annual installments.

The chief executive of Mobilink congratulated fellow bidders and the Pakistan Telecommuncations Authority (PTA) on what he said had been a "transparent" process.

"After this auction, not only 132 million subscribers but the whole Pakistani nation has taken the road of progress," Rashid Khan said.

A study by the UK-based Plum consultancy in August last year said 3G could boost Pakistan's GDP by between 380 billion and 1,180 billion rupees ($3.8 billion to $11.8 billion) by 2020.

Up to 900,000 extra jobs could be created and between 23 billion and 70 billion rupees in additional tax revenue generated by 3G, the Plum report said.

Cheap mobile phone telephony took Pakistan by storm in the early 2000s, but only 3.3 million people are signed up to broadband internet, according to PTA figures, offering a huge, untapped market for faster web speeds.

Information Technology Minister Anusha Rehman hailed the auction as a boon for Pakistanis unable to afford computers and fixed-lined internet connections.

"Through this, the cheap mobile phones of the under-served people having a price of eight to ten thousand rupees will be become their computers," she said.

But while many welcomed the long-awaited advent of 3G, some on social media lamented the continuing government ban on video-sharing website YouTube.