PTA renews Jazz license for $486 million

On Tuesday, Jazz Pakistan and Pakistan Telecommunication Authority signed an agreement for license renewal. In a bid to renew its spectrum in the country, Jazz Pakistan committed to one of the largest investments in the telecom industry in the country’s history. Jazz Pakistan invested $486 million (roughly 888,125,634 rupees) to renew the license for another 15 years. Shortly after the renewal, CEO Jazz Aamir Hafeez Ibrahim wrote on Twitter that the investment “reflects our commitment to improve our services to 75m customers.” He also thanked the Pakistan Telecommunication Authority and the Ministry of Information technology and telecommunication for a transparent and efficient license renewal process.

#jazzpk commits $486m to renew its spectrum for another 15 years – the largest investment in the history of telecom sector in Pakistan & reflects our commitment to improve our services to 75m customers. Thank you #pta & #moit 4 a transparent n efficient license renewal process pic.twitter.com/YwAAhJcPtX

— Aamir Hafeez Ibrahim (@aamir_ibrahim01) April 12, 2022

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Under the agreement signed between the two parties, Jazz Pakistan has deposited 50 percent of the amount upfront, while the remaining payment would be made in five equal annual installments amounting to ten percent of the total cost along with applicable markup of LIBOR+3pc. The license renewal meeting was held at the Pakistan Telecommunication Authority office and was attended by PTA Chairman Major General (retd) Amir Azeem Bajwa, Federal Secretary IT & Telecommunication Dr. Sohail Rajput, and PTA Member Compliance & Enforcement Dr. Khawar Siddique Khokhar. Other Jazz and PTA senior officials were also present at the occasion.

The current operating license given to Jazz by PTA was awarded to it in 2007 and is set to expire on July 5. According to the current operating license, the cost for each megahertz (MHz) frequency was around $39.5 million for 900 MHz and approximately $31million for the 1800 MHz. However, the renewed license policy directive has stated that the renewal cost would be in accordance with the latest price benchmarks. The renewed license also has enhanced terms and conditions to ensure widespread coverage and quality of service. 

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Talking about the importance of the license renewal fee, the former minister for IT and Telecommu­nication Syed Aminul Haq said in an interview that it is a significant source of non-tax revenue for the government. It is pertinent to mention that Warid and Telenor also renewed their licenses last year for around $440 million. 

Meanwhile, the state-run telecommunication authority -PTA- is also set to roll out 5g in the country this month. According to PTA Chairman Amir Azeem Bajwa, “PTA has developed a framework and it will be made available after successful trials of the next-generation wireless network by telecom operators,.” It is also expected that open bidding would be conducted before rolling out 5g technology. Before 5g technology is rolled out in the country, its bidding and license distribution is also expected to drive significant revenue into the national exchequer.