Telcos Unite Before Pakistan’s 5G Spectrum Auction
Telecom operators in Pakistan have submitted a joint set of proposals to the government ahead of the planned 5G spectrum auction. Instead of negotiating separately, the industry has come forward with unified demands, highlighting that the current situation is not sustainable for a successful and affordable 5G rollout.
The operators argue that if spectrum prices, taxes and regulatory costs are not fixed, Pakistan risks a slow, limited or uneven launch of 5G services. They warn that high costs could reduce network investment, delay new coverage and keep packages out of reach for many users, especially low and middle-income customers.
Why Telcos Want Spectrum Pricing in Rupees
One of the key demands from the industry is related to how spectrum is priced. At present, spectrum prices and obligations are heavily exposed to the US dollar. With currency fluctuations and rupee depreciation, this makes long-term planning very difficult for operators.
Telecom companies have proposed that future 5G spectrum prices should be set in Pakistani rupees instead of US dollars and linked to a stable exchange rate mechanism.
They have also requested a 10-year, interest-free installment plan for spectrum payments. According to the operators, this model will reduce financial shocks, support long-term investment and allow them to focus money on building towers, fibre and coverage instead of just paying upfront licence fees to the government.
Tax Cuts, ARPU Targets and Affordability
Pricing pressure is another major concern. The operators have suggested introducing a minimum price threshold in the market and have set a target to raise Average Revenue Per User (ARPU) to around USD 2 within three years. They argue that without a realistic ARPU, companies will not be able to recover the heavy cost of 5G networks, devices and spectrum.
On the taxation side, they have called for exemptions on 5G equipment, mobile phones and related infrastructure to speed up network rollout. The proposals also include reducing withholding tax on telecom services from 15 percent to 8 percent and harmonising General Sales Tax (GST) at 16 percent across the country. In addition, telcos want access to industrial electricity tariffs to cut operating costs, especially as data usage continues to rise and networks consume more power.
Easing USF, R&D and Right of Way Rules
To free up more cash for direct network investment, the industry has asked the government to suspend contributions to the Universal Service Fund (USF) and Research and Development (R&D) fund for two years. After this pause, they propose that the contribution rate should be reduced from 2 percent to 1 percent of eligible revenues.
The operators also see the Right of Way (RoW) policy as a major bottleneck for fast rollout.
They want simpler, standardised and uniform RoW procedures across provinces, cities and authorities. Clear and predictable rules on permissions, fees and timelines for laying fibre or installing towers can significantly speed up the expansion of 4G and 5G networks, especially in underserved and high-demand urban areas.
Regulatory Frameworks Needed for Fast 5G Growth
Beyond pricing and taxes, the telecom industry is also pushing for quick decisions on several important policy frameworks. They have demanded the immediate finalisation of the spectrum sharing framework, handset financing framework and Mobile Virtual Network Operator (MVNO) framework.
Spectrum sharing can help operators make better use of existing frequencies, especially in areas where it is too costly to deploy separate networks. Handset financing can make 5G smartphones more affordable for users through easy instalment plans, while MVNOs can bring in new digital players that rent capacity from existing networks and introduce innovative packages.
According to telecom operators, these reforms and frameworks are critical if Pakistan wants 5G to be widely available, affordable and attractive for both users and investors.
Without them, there is a risk that the 5G spectrum auction becomes a short-term revenue exercise for the state instead of a long-term digital infrastructure success story for the country.
