ZAFAR & ASSOCIATES - LLP | Telecommunication Company - Pakistan

Telecommunication company is a company that makes communication possible on a global scale, whether it is through the phone or the Internet, through airwaves or cables, through wires or wirelessly, these companies created the infrastructure that allows data in words, voice, audio, or video to be sent anywhere in the world.

The largest companies in the telecommunication sector are telephone (both wired and wireless) operators, satellite companies, cable companies, and Internet service providers. For the incorporation and registration of a telecommunication company in Pakistan, three agencies are engaged for this purpose, namely:

Securities & Exchange Commission of Pakistan (SECP)

Federal Board of Revenue (FBR)

Pakistan Telecommunication Authority (PTA)

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Registration with SECP

The SECP is a regulator granted with the mandate to regulate the corporate sector and thereby specifically handles the object of incorporation of all public and private companies. The incorporation procedure is divided into three steps:

Reservation of Name

The first step towards the incorporation of a company is to reserve a suitable name subject to Section 10 of the Companies Act 2017. Three proposed names which fulfill the criteria provided are to be specified for approval. Such reservation can either be made by a separate application or the same can be made alongside the application for incorporation. No extra fee is chargeable for reserving a name alongside the application for incorporation of company. However, for a separate application, a fee of rupees 200/- is chargeable for an e-application and for a physical application a fee of rupees 500/- is chargeable.

After the submission of the application and due fees, the registrar will examine the names provided, and if they fulfill the criteria provided, will issue a certificate for reservation of name for up to 60 days, within which the application for incorporation of company is to be made.

Application for Incorporation

As previously stated, an application for incorporation of company can either be separate or alongside application for reservation of name. Fee for incorporation is in accordance to the type, capital and size of the company, in accordance to Seventh Schedule of the Companies Act 2017. Such application is to be accompanied by the following documents:

• Memorandum of Association duly signed by the subscribers. In case of physical submission, it shall be duly stamped under Stamp Act, 1877;

• Articles of Association duly signed by the subscribers;

• Copies of NIC/NICOP of the subscribers / directors / chief executive officers;

• Copy of NIC of witness in case of physical filing of application;

• Duly stamped authority letter of subscriber or intermediary authorizing him to file documents for incorporation for a physical submission; and

• Original paid bank challan in case of physical submission.

For an online application, all relevant documents are to be scanned and uploaded except for the memorandum and articles which will be generated online.

Issuance of Incorporation Certificate

Once all the relevant documents have been submitted to the registrar, he shall examine the same and determine if all relevant documents are complete and all requirements have been complied with. Once the registrar is satisfied, he shall register the memorandum and other documents, and will issue a certificate for incorporation of company under his signatures and authenticated by his official seal.

Registration with Federal Board of Revenue (FBR)

Previously a separate application had to be made to the FBR for issuance of BNTN number, however the SECP has introduced a one window facility, whereby which the data collected by the SECP is sent to the FBR for registration of NTN number.

Licensing with Pakistan Telecommunication Authority (PTA)

The Pakistan Telecommunication Authority provides licensing for various fields of work for a telecommunication company in Pakistan.

Cellular Mobile Licensing

Cellular Mobile Licensing is dependent on the Policy Directives provided by the respective governments of Pakistan and Azad Jammu & Kashmir and Gilgit Baltistan. Currently there are four mobile operators in Pakistan and six in Azad Jammu & Kashmir and six in Pakistan.

The Government of Pakistan grants Mobile Cellular Licenses for 15 years. The radio spectrum being a valuable public resource belonging to the State, is auctioned in blocks/ Packages. These Blocks are defined by the PTA and the Frequency Allocation Board (FAB) through the Information Memorandum and will also provide the detailed method for auction. This Information Memorandum will be provided to the pre-qualified bidders, alongside the License Template and other relevant material.

After an initial payment of 50% of bid price as down payment on acceptance of bid, the Spectrum Price will be paid by the licensee(s) in equal annual installments over the ten years. Certain conditions are applicable on Mobile Licenses:

• The mobile licensee will have the right to provide their own infrastructure within a PTCL Region and to also provide their own interconnection circuits to other operators.

• The mobile operators will have the right to self-provide inter regional circuits in case an Long Distance & International operator is unable to provide a circuit within 3 months from request or the Quality of Service falls below international standards.

• Licensees will have the right to contract for the Right of Way they need to construct their networks, subject to condition laid down by the concerned authorities.

• The Mobile Cellular Licenses will include a coverage obligation against which a licensee will be obliged to submit a Performance Bond with the PTA. The performance bond will be linked to the rolling annual capital investment requirements to meet the coverage obligations over a 4-year period.

• The Licensee will provide a set of reasonable QoS measures against which the performance of licensee will be measured on a regular basis.

• Licensees are encouraged to implement infrastructure sharing in accordance with the guidelines issued by PTA and FAB.

• Licensees are encouraged to offer National Roaming with other licensees offering reciprocal services in accordance with the guidelines issued by PTA.

• The new licensee(s) will have the right to interconnect its network with other licensed mobile and fixed networks in Pakistan.

• All operators should provide the PTA with evidence of cost for interconnection termination rates within 12 months of beginning their operation.

• All Licensees are encouraged to publish a Customer Charter, to be approved by the PTA.

• The Mobile Cellular Licensee shall submit a Standard Customer Contract before the commencement of its services to the PTA for approval.

• Licensees will pay to PTA a fixed annual fee, to reasonably cover the cost of regulation. The annual fee shall not exceed 0.5% of the previous year’s gross revenue minus inter-operator and related PTA / FAB mandated payments.

• Mobile Licensees will contribute 0.5% of gross revenue minus inter-operator and related PTA / FAB mandated payments to the Research and Development Fund.

Long Distance & International (LDI) License

The LDI license is issued for the provision of end-to-end communication between points that are located in Pakistan with points that are located outside of Pakistan. The licensing procedure after receival of application entails an evaluation by PTA, taking 10 days, the approval of PTA and Awarding of a License then takes a further 8 days.

An Applicant must provide the following:

• Letter of Application

• Checklist

• Fees in the following amounts, payable in Pak Rupees, by direct credit to the designated bank accounts of the Authority, under intimation to the Authority, through normal banking channels:

  • Application fee of US$ 500 (or equivalent Forex value in PKR)

  • Initial fee – LL License of US$ 10,000/- (or equivalent Forex value in PKR) per region applied for,

  • Initial fee – LDI License of US$ 500,000/- (or equivalent Forex value in PKR), and

  • Initial fee – Radio Frequency Spectrum, for a requested block in a Designated Band.

• For Applicants for LDI License, a completed Stand by letter of credit of US$ 10 Million (or equivalent Forex value in PKR) in favour of the Authority.

• Certificate of Incorporation of the Applicant along with its Memorandum & Articles of Association;

• Names of the Directors of the Applicant, and relation of each Director to any other Operator licensed by the Authority or any other Applicant for a License;

• Shareholders of the Applicant, including details of each shareholder’s equity ownership;

• Names of each Affiliate of a shareholder of the Applicant, where the Affiliate is an Operator or an applicant for a License, and description of the relation to the Applicant;

• Copies of National Identity Card (for Pakistani national) / Passport (foreign nationals) and other antecedents of the Directors and authorized representative of the company;

• Provide undertaking for the following:

  • That the Company or its Directors have never been declared insolvent by a court of law;

  • That the Directors of the company have never been convicted by a court of law for major offences or unethical / immoral turpitude (other than minor offences); and

  • That neither the applicant Company nor its group / consortium members are defaulter (s) with reference to other PTA licenses / transactions.

• Applicant’s National Income tax number;

• Certificate on original letter head from the Group / Joint Venture / Consortium members that they are the participants for LL/LDI license in Pakistan through the applicant company;

• Certificate of good standing with the fiscal administration;

• Resolution of the Board of Directors of the Applicant authorizing the individual who submits and signs the Application;

• Special Power of Attorney by the Applicant authorizing the individual who submits and signs the Application;

• A brief description of the following:

  • Telecommunication experience of the Applicant, its key management personnel and its shareholders;

  • Business plan for the initial five years of operations, indicating areas to be served, services to be offered, projected revenues, operating expenses and capital requirements;

  • Committed financial resources including a list of all sources and amounts of equity and debt financing required to finance the business plan in the first 5 years of operation. Capital must show at least a 20% equity component; and

  • Technical plan, including proposed network map and architecture.

• The Applicant must specify which radio frequency spectrum it requests, by frequency band, block and Region. If the Applicant requests radio frequency spectrum in the Designated Bands, the Applicant must provide an expected roll-out scenario projected at 18 months following the Effective Date, including (i) a map showing the expected service contour for the Licensee’s service using the requested radio frequency spectrum, and (ii) the number and approximate locations of radio base stations to be deployed in serving the service contour.

• If an Applicant for a LL License requests blocks in alternative radio bands in a Region, the Applicant must provide the information described in (p)(ii), (iii), (iv) and (q) above for each such block that is applied for. This information can be provided for a preferred block, with an explanation of the differences if an alternative block is employed by the Applicant.

• Affidavit of the person granted the power of attorney by the Applicant.

• The Applicant shall submit one original and two copies of the complete Application package to the Authority before the deadline for the submission of Applications. The original package and the copies shall be clearly marked “original application” and “2nd”, “3rd” copies, as applicable. In the event of discrepancy between two copies, the original shall prevail. Each Application package shall be clearly marked as follows:

  • Application for LL or LDI License (as the case may be)

  • Name of the Applicant

  • Local contact name, telephone, fax and e-mail

• The three copies of the Application shall be packaged together in a single box or other container. The container shall be sealed; that is securely packed and closed, so that it is not possible to open it without visual evidence thereof.

• Upon receipt, the Authority will provide a written receipt confirming the delivery of each Application received.

The following are the eligibility requirements for a License:

• The applicant shall be an incorporated or registered company in Pakistan under the Companies Act, 2017.

• The applicant submits all the documents mentioned above.

• The applicant submits all required initial fees to the Authority by the applicable deadlines referred to in this Information Memorandum.

• The applicant satisfies the Authority that:

  • Technical plan and business plan are feasible;

  • Adequate financial resources are available to implement the business plan;

  • The applicant’s key management personnel demonstrate the minimum degree of required experience.

Local Loop (LL) Licensing

A LL License will authorize the licensee to construct local network facilities in licensed Region and to provide basic public telephone access and other telecommunication services in that Region. This license may either be a Fixed Local Loop (FLL) license which is issued for the provision of fixed line telecommunication services within a telecom region using medium excluding wireless; or it can be a Wireless Local Loop (WLL) License issued for the provision of fixed line telecommunication services within a Telecom Region using mediums including wireless, with limited mobility.

An Applicant shall make a separate application for LL License and LDI License. In case Applicants are interested to obtain LL license in more than one region, separate application shall be filed for each region along with necessary documents. Total number of regions is 14. As part of the Application, an Applicant must provide the following:

• Letter of Application

• Checklist

• Fees in the following amounts, payable in Pak Rupees, by direct credit to the designated bank accounts of the Authority, under intimation to the Authority, through normal banking channels:

  • Application fee of US$ 500 (or equivalent Forex value in PKR)

  • Initial fee – LL License of US$ 10,000/- (or equivalent Forex value in PKR) per region applied for,

  • Initial fee – LDI License of US$ 500,000/- (or equivalent Forex value in PKR), and

  • Initial fee – Radio Frequency Spectrum, for a requested block in a Designated Band.

• For Applicants for LDI License, a completed Stand by letter of credit of US$ 10 Million (or equivalent Forex value in PKR) in favor of the Authority.

• Certificate of Incorporation of the Applicant and its Memorandum & Articles of Association;

• Names of the Directors of the Applicant, and relation of each Director to any other Operator licensed by the Authority or any other Applicant for a License;

• Shareholders of the Applicant, including details of each shareholder’s equity ownership;

• Names of each Affiliate of a shareholder of the Applicant, where the Affiliate is an Operator or an applicant for a License, and description of the relation to the Applicant;

• Copies of National Identity Card (for Pakistani national) / Passport (foreign nationals) and other antecedents of the Directors and authorized representative of the company.

• Provide undertaking for the following:

  • That the Company or its Directors have never been declared insolvent by a court of law;

  • That the Directors of the company have never been convicted by a court of law for major offences or unethical / immoral turpitude (other than minor offences); and

  • That neither the applicant Company nor its group / consortium members are defaulter (s) with reference to other PTA licenses / transactions.

• Applicant’s National Income tax number;

• Certificate on original letter head from the Group / Joint Venture / Consortium members that they are the participants for LL/LDI license in Pakistan through the applicant company;

• Certificate of good standing with the fiscal administration;

• Resolution of the Board of Directors of the Applicant authorizing the individual who submits and signs the Application;

• Special Power of Attorney by the Applicant authorizing the individual who submits and signs the Application;

• A brief description of the following:

  • Telecommunication experience of the Applicant, its key management personnel and its shareholders;

  • Business plan for the initial five years of operations, indicating areas to be served, services to be offered, projected revenues, operating expenses and capital requirements;

  • Committed financial resources including a list of all sources and amounts of equity and debt financing required to finance the business plan in the first 5 years of operation. Capital must show at least a 20% equity component; and

  • Technical plan, including proposed network map and architecture.

• The Applicant must specify which radio frequency spectrum it requests, by frequency band, block and Region. If the Applicant requests radio frequency spectrum in the Designated Bands, the Applicant must provide an expected roll-out scenario projected at 18 months following the Effective Date, including (i) a map showing the expected service contour for the Licensee’s service using the requested radio frequency spectrum, and (ii) the number and approximate locations of radio base stations to be deployed in serving the service contour.

• If an Applicant for a LL License requests blocks in alternative radio bands in a Region, the Applicant must provide the information described in (p)(ii), (iii), (iv) and (q) above for each such block that is applied for. This information can be provided for a preferred block, with an explanation of the differences if an alternative block is employed by the Applicant.

• Affidavit of the person granted the power of attorney by the Applicant.

• The Applicant shall submit one original and two copies of the complete Application package to the Authority before the deadline for the submission of Applications. The original package and the copies shall be clearly marked “original application” and “2nd”, “3rd” copies, as applicable. In the event of discrepancy between two copies, the original shall prevail. Each Application package shall be clearly marked as follows:

  • Application for LL or LDI License (as the case may be)

  • Name of Applicant

  • Local contact name, telephone, fax and e-mail

• The three copies of the Application shall be packaged together in a single box or other container. The container shall be sealed; that is securely packed and closed, so that it is not possible to open it without visual evidence thereof.

• Upon receipt, the Authority will provide a written receipt confirming the delivery of each Application received.

The following are the eligibility requirements for a License:

• The applicant shall be an incorporated or registered company in Pakistan under the Companies Act, 2017.

• The applicant submits all the documents mentioned above.

• The applicant submits all required initial fees to the Authority by the applicable deadlines referred to in this Information Memorandum.

• The applicant satisfies the Authority that:

  • Technical plan and business plan are feasible;

  • Adequate financial resources are available to implement the business plan;

  • The applicant’s key management personnel demonstrate the minimum degree of required experience.

Class VAS Licensing

The Class Value Added Service (CVAS) Licensed Service regime consists of only one type of license i.e., Data CVAS License for Vehicle Tracking Services. Such licenses remain valid for a period of 15 years. Under CVAS license, the initial license fee is Rs. 100,000/- per Province, with a further 50% reduction in case of Baluchistan, and in case of a Nationwide CVAS, the licensing fee would be Rs. 300,000/. Whereas the Annual License Fee is only 0.5% of the Annual Gross Revenue. In the case of a Not-for-Profit entities, the initial licensing fee is 50% of the General CVAS license with an annual license fee of Rs. 5000/-. A registration fee of Rs. 10,000/- is also applicable.

The Application for a Data CVAS license is to be accompanied by the following documents:

• Covering letter addressed to DG (Licensing), PTA HQsF-5/1, Islamabad.

• Form including the following:

  • Authorization Letter on Covering Letter in favor of contact person / director / member / BoD etc. for correspondence with PTA;

  • Applicant Profile Form;

  • Category Selection Form;

  • Detail of all directors / members / BoDs etc showing names, designations, mailing addresses, contact numbers, emails and directorship in other companies (if any).

• Application Processing / Registration Fee

• True Copies of Legal Documents by SECP including the following:

  • Certificate of Incorporation

  • Memorandum & Articles of Association

  • Form 29

• In case of documents issued by Organizations other than SECP where applicable:

  • Firms, Form-C, Partnership Deed

  • Trust – Trust Deed registered, Detail of Trustees

  • NGO’s – Certificate of Registration issued by concerned authority duly attested, Memorandum & Articles of Association, bye-laws etc.

  • Government Departments – Application signed / authorized by Head of Department, contact person on behalf of the department, copy of mandate / scope / charter under which the proposed services will be provided

  • Individual – Proof of identity

• Attested Copies of Computerized National Identity Card for Pakistani national shareholder directors / board of directors / trustees / members etc. In case of Foreign Nationals, attested copies of Passports duly attested by Ministry of Foreign Affairs (MoFA) after security clearance.

• Undertaking on duly notarized stamp paper stating that neither the applicant Company nor its shareholder directors are defaulter(s) of PTA and any bank in Pakistan. In the case of NGO and trusts members of the Board have never been declared insolvent or convicted by a court of law.

• Bio-data of key management personnel (CEO / CTO / Directors / Board / members etc.)

• Brief Description of the Applicant's Business Plan Including Bank statement in the name of the applicant, 3 to 5 years business plan (projected balance sheet, profit and loss account, cash flow statement, project cost).

• Network Plan Showing that:

  • Type of Services

  • Purpose

  • Mechanism for provision of Services

  • Subscription procedure and promotion campaign details

• Copy of Service Level Agreement(s) with operator(s) for SMS Aggregator Services

Infrastructure License

The Infrastructure License is further divided into two categories, the Telecom Infrastructure Provider (TIP) License, which authorizes to establish and maintain the following telecom infrastructure facilities to lease, rent out or sell end-to-end links to Telecom Operators. These includes Earth Stations & Satellite Hubs, Optic Fiber Cables, Radio Communication Links, Submarine cable landing center within fifteen miles of costal area of Pakistan subject to approval by the Authority & clearance of Ministry of Defense and Ministry of Interior, Towers, poles, ducts and pits used in conjunction with other infrastructure facilities; and such other Telecommunication infrastructure as the Authority may, by Regulation, require.

Under the Telecom Tower Provider (TTP) License authorizes a firm /person to establish and maintain to lease, rent out or sell to Telecom Operators s licensed / registered by the Authority on mutually agreed terms strictly keeping in view their license / license conditions, Telecommunication Towers and any such other Telecommunication infrastructure as the Authority may, by Regulation, require.

Application processing fee for National TTP License for Pakistan is Rs 5000/- while for Provincial TTP is Rs. 500/-. The initial license fee for TIP License for Pakistan is US$ 100,000/- (Or equivalent in Pak rupees). Furthermore, the initial license fee for National TTP License for Pakistan is Rs 100,000/-, Rs 40,000/- for initial license fee for Provincial TTP License for Pakistan, and Rs 10,000/- for Initial license fee for Baluchistan TTP License.

The Application for a TIP / TTP license is to be accompanied by the following documents:

• Letter of Application including the complete details of the contact person, office address, email, telephone no. and fax no.);

• Application Processing Fee;

• Initial License Fee;

• Company Information including:

  • Certificate of Incorporation / registration

  • True copy of Memorandum & Articles of Association

  • List of Directors with details of their shareholdings, and relation to other operators and applicants for a License

  • List of Shareholders Affiliates that are operators or applicants for a License, and description of relation to Applicant

  • Copies of National Identity Card (for Pakistan National) / Passport (for foreign nationals) and other antecedents of the Directors and authorized representatives of the company

• Undertaking for the following:

  • That the company or its directors have never been declared insolvent by a court of law;

  • That the Directors of the company have never been convicted by a court of law for major offences or unethical / immoral turpitude (other than minor offences);

  • That neither the applicant company nor its group / consortium members are defaulter(s) with reference to other PTA licenses / transactions.

• National Income Tax Number (if any)

• Certificate on original letter head from the Group / Joint Venture / Consortium members that they are the participants for Infrastructure license in Pakistan through the applicant company.

• Certificate of good standing with the fiscal administration.

• Resolution of the Board of Directors of the applicant authorizing the person who submits and signs the letter of Application.

• Duly notarized Special Power of Attorney granted to the person who submits and signs the letter of Application.

• Brief description of telecommunications qualifications and experience of the applicant, its key management personnel and its shareholders.

• Brief description of the applicant’s Business Plan for the initial five years of operation.

• Brief Description of Committed Financial Resources

• Feasibility of the project including:

  • Details of market studies identifying target market as perceived by your company

  • Statement showing capital cost of the project

  • Forecast of balance sheet and profit and loss account, for each of the five years following commencement of commercial operations

  • Proof of financial resources of the company to establish and maintain infrastructure. A reference of your banker including copy of bank balance certificate/statement, saving certificate, shares or other moveable or immovable property

  • Costs of establishing and maintaining the infrastructure facilities

  • Complete details of pricing structure of the facilities proposed

  • vii. Cash flow analysis / projections incorporating assumptions on market risks, and method employed to minimize risk factors involved

• Letter of Intent from financer (if involved)

• Technical Documents applicable only to infrastructure license including:

  • Detailed technical specifications and design of the proposed system

  • Complete diagrammatic view of proposed network showing equipment and communication links

  • Details of the proposed backbone network, the network topology and the network management system

  • Complete list of hardware / software used in the system

  • Manufacturer’s literature of equipment and software

  • Complete details of facilities required from other network operators (if any)

  • Location of proposed points-of-extension of infrastructure facilities

  • Specific measures proposed for network security and system security

  • Network Standards to be deployed

• Support Facilities documents, applicable only to the TIP license, including:

  • Details of existing / proposed technical support facilities

  • Network redundancy or backup system

  • Plan for preventive maintenance of the system and breakdown or system failure

• Affidavit as per specimen duly notarized (On Rs. 20 Stamp Paper, Sample attached at Flag A)

• Proof of clearance of PTA dues in case previously licensed

• Complete scanned copy of application (Soft Copy).

Type Approval

Terminal equipment which can be directly or indirectly connected with public switched network has to be approved by the PTA. Terminal equipment includes Tracking System Devices with SIM / IMEI based functionality, transmitting Location details (Vehicle Tracking, Smart Watches with SIM / Tracking, Equipment Tracking); Satellite Terminal Equipment; Wireless Radio Trans/Receiver, Repeaters Sets (e.g. VHF, HF, UHF, Two Way Radio, Maritime etc.); Terminal Devices operating in ISM as defined PTA ISM band regulations, RFID, Bluetooth, Immobilizer, Short Range, Devices, Ultra-Wide Band, Machine to Machine, IoT devices, Inductive loop systems, smart metering, telecontrol telemetering, GNSS, etc. within FAB prescribed band & usage conditions etc; IP Phones, Video Conferencing, VoIP Systems, Gateway etc.; PABX / IP – PABX; SIM / IMEI / Wi-Fi based Mobile Devices e.g. Mobile Handsets, Wi-Fi Tablets, Dongles, Wingles etc. The processing fee for Locally Manufactured equipment is Rs. 5000/- and for imported equipment is US$ 100.

The documents to be accompanied with the Application, include:

• The Application Form

• Application Fee

• Undertaking from applicant that PTA Regulations / Directives will be followed

• After Sales Service Facility / Customer Service Center

• In case of a new company NTN, SECP, City Government, Company Profile etc. details where applicable

• Declaration of Conformity (DoC) by the manufacturer reflecting the applied device standards e.g. RF, Safety, SAR, EMC / EMI etc.

• Provision of Type Allocation Code (TAC) details (e.g., GSMA TAC Certificate or GSMA TAC Code programmed on applied model device etc.) from GSMA Association in case of device offering IMEI / SIM based functionality. As part of evaluation of type approval request PTA will verify applied TAC with GSMA database and if needed further verification can be asked directly from GSMA for specific TAC. Upon approval of type approval request, all GSMA TAC (excluding those TAC which is placed on blacklist by the Authority) issued against the specific model to be included. Furthermore, manufacturers/type approval holder / persons will ensure that device IMEI cannot be modified and no such provision will be built in the mobile device for user to perform such change.

• Undertaking from manufacturer that device being type approved is for mass produce consumer purpose only and all native applications installed do not support any customized in-built encryption as part of its primary device functions. Provided that PTA reserves the right to forward relevant device information to concerned government bodies for evaluation / clearance as and when deemed necessary.

• Undertaking from manufacturer that sanctity/privacy of the user data shall be ensured.

• Technical Data Sheet, reflecting Specifications for the device e.g., output power, operating frequency, range etc.

• System based testing / checking e.g., Operating system, firmware etc.

• Test Reports for standards reflected within DoC.

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