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ISLAMABAD: The government has decided to introduce two new mobile phone operators to comply with the substantial unmet demand in this vital sector in the country.

In this regard, Pakistan Telecommunication Authority PTA has invited Expression of Interest (EoI) (through open bidding) to award two new cellular phone licenses to interested local and foreign parties.

The initiative will kick-start and accelerate the whole process of bringing in additional mobile cellular companies which will be carried out in an open and transparent manner.

The introduction of new mobile operators, additional competition in the sector will bring the prices down and the people would be able to avail better quality of service, increased coverage and service at affordable and competitive prices.

The mobile phone sector has seen tremendous growth during the last few years especially after the introduction of Calling Party Pays (CPP) regime in 2000. There are four operators (2 GSM and 2 AMPS) are providing services to over 2.8 million cellular subscribers. The number of subscribers has more than tripled in the past two years, however, the mobile tele-density in the country is still around 1.9 and the introduction of two new mobile phone operators would help meet substantial unmet demand.

When asked about the criteria of issuing licenses, official sources said the license term will be for 15 years. The parties who are at the time of grant of the new license, directly or indirectly holders of an equity interest in one of the existing Pakistan cellular licenses will not be eligible to participate in the new licenses.

The sources said any equity holder in either an existing license or one of the new licenses, participate in more than one mobile license in Pakistan at anytime during the term of the new licenses. About Eol, the sources said it should include outline of the technical commercial and financial strength and experience of the interested party in cellular sector and an outline of how the interested party would address future mobile market requirements in Pakistan, in order to further liberalize the telecom sector.

The other points include any other relevant material in support of Eol and contact details for a single representative of the interested party. The sources said frequency bands are in the process of being determined and will be allocated in the 900/1300/1900 MHz bands.

PTA will review the EoIs received and hold conference of interested parties. The information memorandum including the draft license, the bidding process and a note on regulatory environment will be issued on January 7, 2004, the sources added. There are already four operators (2 GSM and 2 AMPS) have been providing services to over 2.8 million cellular subscribers, but a lot of complaints have been registered in the PTA complaint cell, established to address subscribers grievances.

PTA, being the regulator, had also imposed fine of Rs. 600 million to one of the GSM operator for providing low-quality services to the customers. "No doubt the number of subscribers has more than tripled in the past two years, but the existing cellular operators gave connections more than their actual capacity, resulting disturbance in their network," said a subscriber of a GSM company. He asked PTA to monitor quality of all the companies on regular basis and should not compromise on quality of service.

The government had also announced measures for the promotion of mobile phone sector and was considering to propose a uniform framework for existing and new cellular licensees. The government is also planning to announce mobile phone policy in order to offer more choices to the customers. The policy would envisage new licenses for the companies wanting to operate in the sector.

Under the proposed new policy, cellular licensees would also be required to contribute towards R&D and USF funds in the same manner as fixed line licensees. The Ministry of IT had already hired services of international consultants to advise in analysis of the mobile cellular sector, prepare detailed framework for provision of additional mobile cellular licensees, propose a complete policy with regulatory and legal framework for the sector.