Paktel sues PTA over $38.8m fee to go GSM

By Shahzad Raza

ISLAMABAD: Paktel, a private cellular phone operator, has refused to pay $38.8 million in fees to the Pakistan Telecommunication Authority (PTA) for starting GSM services. Instead, it has filed a lawsuit against the PTA’s demand.

PTA sources told Daily Times on Wednesday that the Lahore High Court was scheduled to hear the case on Thursday (today). They said the PTA was determined to contest the case. Sources said that the PTA had allowed Paktel to convert from the AMPS to GSM technology in October 2002. However, sources added that after PTA gave the permission, the ministry of information technology raised certain objections. Finally, it was decided that Paktel would have to pay the same licence fees as other new companies to get the GSM operating licence. On April 14, 2004, the PTA awarded two new cellular phone licences for $291 million each. The authority also ruled that the existing cellular phone operators – Mobilink, Paktel, Instafone and Ufone – would pay the same license fees on the expiry of their respective licences.

Sources said that the PTA had asked Paktel to pay $38.8 million only for the previous 15 months. They added that both Instafone and Paktel would have to pay $291 million (in instalments) to renew their licences, which expire on April 2005. Initially, the three private mobile companies were awarded licences without any fees. The state-owned company, Ufone, was the only mobile phone operator that had obtained the licence by paying fees of Rs 50 million.

The licence of Mobilink will expire on July 2007, while the licence of Ufone is valid until August 2013. Sources said the PTA had the right to cancel the licence of any company that refused to pay the renewal fees of $ 291. Sources in the telecom industry said that both Instafone and Paktel would find it difficult to pay for the renewal of their licenses. This raises serious concerns for the companies, which had a total of 846,520 clients as of February 29, 2004. The analysts believe that a Pakistan-based group, which has major shares in Paktel and Instafone, is against the idea of renewal fees. They predicted that both companies might be merged into one. Some foreign companies are also interested in buying one of the two mobile companies.

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