China Mobile Pakistan (CMPak), Zong, is ready to invest 0.6 to 1 million to roll out international outgoing and incoming calls through their own network by acquiring a Long Distance and International (LDI) license in the coming months.
The company has sought request of LDI licence separately for Pakistan, Azad Jammu and Kashmir and Gilgit Baltistan from Pakistan Telecommunication Authority (PTA) having upfront cost of US$ 0.5 million and US$ 20,000 in addition to network expenses and different charges to regulatory body and contribution to Universal Service Fund.
Zong approached telecom authority again after five years in order to scale up its business through different telephony and corporate services. The cellular operator initially requested for the license back in 2008, which has been approved by the then federal cabinet and parliament as well.However the license has not been awarded to Zong after lapse of five years due to strategic deal between Pakistan and UAE on the privatization of Pakistan Telecommunication Company Limited (PTCL) by Etisalat.
The Cabinet Committee on Regulatory Bodies put a watch hold on the new licensing since 2006, which has been still intact despite the period of seven years have been completed on March, 23, 2013. Meanwhile local loop and LDI licenses were given in the region of Azad Jammu and Kashmir in 2008, which it deemed injustice.
At present, Zong has been using network of different LDI operators to provide its customers international calls which is costly operation for them as margins are quite low against the payment to service providers. Now, Zong management is looking forward to availing license of LDI in two regions as the contract between the two nations has been ended as if March 23.
The acquisition of license by Zong will enhance its revenue streams, curtail in operations and better service of international calls to its customers at competitive rates.
Sikandar Naqi, Advisor to CEO Zong said that LDI license will be a big business venture of Zong because it will provide the company various opportunities to earn handsome revenues in the future.
But the company said that it has been denied for giving level playing field barring it from entering in the arena of high-class and lucrative service market, he added. The company is looking forward to get license as soon as possible but dysfunctional telecom authority halted its plans and investment in Pakistan.
We can launch international calling services and enterprises solutions to corporate sectors within two months if license is awarded to us in near future, Zong official added.
Since Zong has already paid heavy price to honor Government of Pakistan commitments with Etisalat, it is high time that Government of Pakistan honor its commitments and award long distance and international license to CMPak. This act will enhance investor confidence in Government of Pakistan policies and commitments and will ensure high proceeds for Government of Pakistan in the upcoming 3G spectrum auction.
Zong is the only cellular operator which does not have a Long Distance & International (LDI) License in both Pakistan and AJK & GB which puts the company in a position of competitive disadvantage viz-a-viz other cellular mobile operators.
Zong management has requested the government to review its demand and implement the recommendation of cabinet committee as a due right of investor which will help strengthen confidence in Pakistan’s government and allow telecom operators to continue their investment plans in future.
CMPak is the first foreign subsidiary of China Mobile Communications Corporation, the biggest telecom giant of the world, with having long-term friendly relationship between the two countries. It has invested more than US $ 2 billion so far in Pakistan since 2008 and it has planned to further expand its network along with network up-gradation and 3G license acquisition in future.