Telenor Pakistan reconsiders 3G auction

Telenor Pakistan reconsiders 3G auction

Lars Christian Luel, chief executive at Telenor Pakistan, has told local reporters the company may review its involvement with Pakistan’s upcoming 3G spectrum auction.

The country’s government approved the auction just two days ago, and appointed three members of the Pakistan Telecom Authority (PTA) to conduct it.

Luel, however, has expressed concern over the high taxes and tight regulations in Pakistan, which he believes may put pressure on Telenor’s revenues as customer spend reaches its limit.

“If viable business terms are not put in place on the auction of 3G then we will invest somewhere else,” he told local reporters.

“The telecom companies are not money-making machines so the new government will have to come forward with the right kind of policies to attract more investment.”

The Pakistani government expects to collect $1.2 billion from the auction, an increased estimate from $800 million, which Luel believes is unattainable given the 5% increase in tax rates for mobile companies.

“We think it’s reckless to impose these kinds of taxes on small men in the streets while the people who that have the ability to pay are not taxed accordingly,” he said.

In November last year Telenor was set to participate in India’s spectrum auction but eventually pulled out as it believed the price was too high, and it appears Luel is not afraid to act similarly here.

The speculation follows Telenor’s recent success as one of two licence holders in Myanmar, and last week, announced it would roll-out commercial 3G services in the countrywithin the next five years.

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