2 min read
The Pakistan Telecommunication Authority (PTA) has assured prospective bidders that ambiguities identified in the spectrum auction Information Memorandum (IM), particularly relating to processed pricing and assignment-stage mechanics will be formally clarified in the final IM and through upcoming bidder engagement sessions, including an information session, bidder seminar and mock auction.
The move comes after cellular mobile operators (CMOs) submitted detailed queries pointing out potential gaps in the clock-stage pricing rules and the assignment-stage process. Operators had highlighted scenarios where the current IM wording could lead to unexpected outcomes, such as the Processed Price remaining at the Opening Price even when bids are accepted or rejected at higher levels.
Pricing Rules Under Review
PTA confirmed that if bid processing results in aggregate demand matching the supply exactly, even without rejected decrease bids, the Posted/Processed Price will be set at the highest price where excess demand was observed. This is usually reflected by the last accepted decrease bid. Officials admitted that the current drafting does not explicitly cover such scenarios and promised a clear explanation in the final IM.
Operators had warned that reading Section 5.2.1(e)(ii)(7) literally could result in Processed Prices remaining at the Opening Price despite active bidding, which would not align with international auction standards or economic logic.
Mechanical Concerns Highlighted
Bidders also raised concerns about how prices are applied mechanically during the clock stage. In examples submitted to PTA, demand sometimes starts at supply, then bid processing occurs at higher prices, and finally ends at supply again, potentially with a different bidder-to-lot configuration. Under current wording, the Processed Price could remain unchanged even though price discovery occurred. PTA responded that the final rules will ensure prices reflect the highest level of excess demand, removing any confusion.
Assignment Stage Details Pending
CMOs also raised concerns over the limited guidance provided for the Assignment Stage, PTA stated that:
- Worked examples will be shared during the information session and mock auction.
- Unallocated spectrum in the 3500 MHz band will be assigned to the top of the band, just below 3580 MHz.
- Bidders will not have default extension rights.
- Bidders can freely switch ranks across rounds, with no priority from previous uncontested positions.
- Processed prices are rank-specific and can only increase or remain unchanged
Clear guidelines will allow companies to bid strategically while ensuring the process is fair and transparent.
