Trio challenge govt USD1.37bn demand for licence renewal

9 May 2019

Pakistani cellcos Jazz, Telenor and Zong have challenged the terms of their long-delayed licence renewals, arguing that the conditions do not provide a level playing field and claiming that their concerns were not addressed. The Business Recorder writes that the government approved plans to renew the concessions of Telenor and Jazz (the licence had originally been awarded to Warid prior to that cellco’s merger with Mobilink to form Jazz) for 15 years at a cost of USD450 million apiece, whilst Zong’s renewal was priced at USD470 million. The concessions had been issued in May (Telenor/Jazz) and October 2004 (Zong) for USD290 million each, and are due to expire in May and October this year, respectively. The Islamabad High Court will hear the operators’ complaints on 14 May.

The paper cited unspecified sources at the cellcos as complaining about the government’s use of the US dollar as a benchmark for the price, given the extent of currency movements in recent years and the fact that the providers earn and spend in the local currency. The operators also drew attention to the fact that part state-owned mobile provider Ufone had renewed its licence in 2014 for just USD291 million. As such, Telenor argued that the other licences should be renewed on the same terms to maintain a level playing field.

The operators also took issue with the limited notice given by the government for the renewal, pointing out that they had first filed requests for their licences to be extended some 18 months ago but have now been given just over two weeks to consider the policy, with one official quoted as saying: ‘We are going to invest billions of rupees, how is it possible to make a decision in such a short time?’ With no system or policy guidelines in place for licence renewals, plans for the process were drawn up at the eleventh hour, with the PM establishing a committee to oversee the matter as late as February this year.