THE government, especially the Ministry of Finance, must have heaved a sigh of relief to learn that many top names in the world’s telecom industry are interested in obtaining the third- and fourth-generation licences it plans to auction towards the end of the coming month. The Pakistan Telecom Authority’s market intelligence shows that at least one company each from the United States, the United Kingdom, Japan, Qatar and Afghanistan is planning to bid for the licences to enter the country’s telecom market. Apart from these, five companies already operating in Pakistan also intend to compete for the next-generation licences. Some of them will go it alone. Others faced with financial problems are looking for partners to make joint bids. Just how many will actually participate in the auction is not clear at the moment, but the more there are, the merrier it will be for a cash-strapped government that is desperately looking for ways to raise foreign revenues.

The government, which plans to generate around $800m from the sale, has a lot at stake. It will be difficult for it to keep down its budget deficit for the current fiscal to manageable levels unless it is able to raise the projected funds from the auction. Even a delay in the auction could jeopardise the efforts to sell the licences at a good price and control the deficit, which is projected to balloon to over six per cent. So difficult are the economic circumstances that the advisory committee on the auction is said to be looking into the possibility of bypassing the procurement rules to complete the process within the stipulated time. It has already referred the matter to the law ministry for advice. Bypassing the rules does not appear to be the right approach. In the given political situation, it would be advisable for the government not to disregard these even if it is within its right to do so. It could delay the auction for a longer time if the matter is taken to the courts.