ALREADY more than three months behind schedule, the Spectrum Management Authority hopes to take another step closer to the sale of two telecommunications licences next month.
The government agency, charged with overseeing the auction of 700-megahertz (MHz) band licences, has scheduled a public forum for September 10, following requests for written comments in its consultation.
The consultation was postponed from its May date, in order to ensure "the involvement of all stakeholders interested in this auction process".
Now, the SMA said it is satisfied that everyone has been notified of the offering, from which the Government hopes to raise a minimum of US$85 million for the two licences.
Technology Minister Phillip Paulwell had hoped to have already opened the auction by now. In March, he told parliament that the sale process would commence in July. He also said that potential investors from Asia, Europe and North America had already expressed interest.
But with the delay in the consultation process, all dates were pushed back, and five months later the auction hasn't even begun.
The sale of the two 700-megahertz (MHz) band licences, which allow for the provision of 4G technology, such as Long Term Evolution (LTE), it is hoped, will significantly deepen broadband Internet penetration in Jamaica.
Internationally the band was used for analogue television broadcasting, but has been allocated by the International Telecommunication Union (ITU) for broadband wireless services.
The reserve prices — US$40 million for the cheaper one and US$45 million for the other -- were set so that it would be low enough to encourage multiple players in the market, while securing a "reasonable" payment for the licence, according to the information memorandum published by the SMA last month.
Locally, bids will have to include a business plan, which details the percentage population coverage after each year of expected rollout as well as the anticipated capital expenditure.
On the other hand, the Telecoms Amendment Act allows for an infrastructure sharing obligation on all licensees, which should allow new players in the sector to roll-out without taking on heavy costs of infrastructure and facilities such as cell sites and towers, landing stations and cables.
More specifically, one of the main objectives of the auction is to increase competition in the provision of the telecommunications services through the entry of a new player, according to the information memorandum. Hence, the package is designed to incentivise new entry.
Winners of the spectrum licence will be required to launch commercial services within 18 months, if they already operate in Jamaica, or no later than 24 months for new entrants.
What's more, incumbents will have to commit to 50 per cent population coverage within the first year-and-a-half and 90 per cent with four years, while newcomers will have to reach 30 per cent of the population by the end of its second year after getting the licence. They also get a year more than existing telecommunications operators to hit the 90 per cent mark.
Not meeting those requirements, means losing the licence.