Licensing Pre-Qualification Criteria
This Practice Note provides more information about pre-qualification criteria. Pre-qualification criteria are minimum requirements that must be met in order for a person to participate in a competitive licensing process. As a general rule, pre-qualification criteria establish a baseline of financial capability and technical competence.
The 2007 Nigerian 800 MHz spectrum auction featured a pre-qualification stage. During the pre-qualification stage, applicants were required to confirm that they met all pre-qualification criteria in order to be designated an Approved Bidder, i.e., eligible to participate in the actual auction. Box 1 sets out the pre-qualification criteria applied in this auction. Applicants were also required to pay a deposit into a designated account. This deposit, called an “Intention-to-Bid Deposit”, was returned to applicants who failed to pre-qualify. Applicants were informed five days prior to the first round of the auction whether they had met the pre-qualification requirements and had therefore been deemed an Approved Bidder.
The Saudi Arabian Telecommunications By-law requires the Saudi regulator, the Communications and Information Technology Commission (CITC) to include a pre-qualification stage when licences are issued through auctions or comparative evaluation processes. The By-law states each applicant in either an auction or a comparative evaluation process must provide:
(a) clear evidence that the applicant has the financial capability to provide the proposed services an implement the proposed network; and
(b) clear evidence that the applicant has the technical capability and experience or has access to the technical capability and experience to provide the proposed services and implement the proposed network.
The CITC has the authority to establish the specific form and substance of the evidence that applicants must provide in order to satisfy these pre-qualification criteria. In 2004, the CITC released a Request For Pre-Qualification (RFPQ) for the licensing process for cellular mobile services. Pursuant to its authority under the Telecommunications By-law, the CITC established a set of criteria that applicants were required to meet in order to pre-qualify to participate in the competitive licensing process for cellular mobile services. In the RFPQ, the CITC stated that, in order to pre-qualify, candidates were required to demonstrate that they had:
- appropriate technical experience and capabilities for deploying and operating a cellular mobile service;
- appropriate commercial experience and capabilities for running a cellular mobile services company;
- adequate financial resources; and
- a commitment to comply with the CITC statutes and all relevant and applicable Saudi laws and regulations, in particular Article 4 of the Act (which requires that fixed and mobile telecommunications services shall only be provided through joint-stock companies that place their stock for public subscription).
The RFPQ also included specific criteria to determine whether a candidate had complied with the above criteria. Box 2 provides further information about these specific criteria.
|Box 2: Specific Pre-Qualification Criteria for the Saudi Cellular Mobile Services Licensing Process, 2004|