Telenor Pakistan

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In April 2004, Pakistan Telecom Authority (PTA), Pakistan’s telecommunication regulator, awarded one of the two new nationwide GSM (Global System for Mobile Communications) licenses to Telenor ASA. The other license was awarded to Warid Telecom. The license allowed Telenor to build and operate a mobile network in Pakistan for 15 years and was renewable. The license was part of a broader reform undertaken by the Government of Pakistan to foster competition in the telecom industry and increase the infrastructure capacity to meet the rapidly growing demand for cell phones. Telenor acquired the 15 year license for US$ 291 million in an open-outcry auction, conducted by PTA in April 2004. Telenor paid 50 percent of the winning bid (US$145.5 million) upfront and the balance was paid over the next 10 years. Telenor Pakistan, a wholly owned subsidiary of Norway’s Telenor ASA, was created to execute the Pakistani operations. Telenor estimated an accumulated capital expenditure of around US$ 700 million (excluding license payments) by the end of 2007 and approximately US$ 175 million was to be spent in 2004. Telenor contracted Siemens and Nokia to set up and run the GSM network on their behalf. The license terms required Telenor to cover 70 percent of Pakistan’s 297 administrative tehsil headquarters (45 percent population coverage) by 2008. Telenor launched its GSM network for commercial service in March 2005. At the time of the launch Telenor’s network covered nearly 32 million people in Rawalpindi, Islamabad, Karachi, Lahore, Faisalabad and Hyderabad. Telenor had 344,000 subscribers within the first 17 days of operation. As of March 2005, Telenor competed with five other mobile phone operators in Pakistan – – Ufone, Mobilink, Paktel, Instaphone, and Warid.