Pakistan Telecom Sector Poised for Growth with New Spectrum Auction Policy
Islamabad – A new policy directive from the Ministry of IT and Telecom is set to invigorate Pakistan’s telecommunications sector, addressing long-standing concerns and paving the way for the auction of next-generation mobile spectrum. The policy, which fixes the dollar rate for spectrum fees and ties interest rates to benchmarks issued by the State Bank, has been welcomed by key industry players like Jazz and is expected to spur important investment and network expansion.
Key Features of the New Policy
The Ministry’s directive represents a significant shift in how spectrum auctions will be conducted in Pakistan. Here’s a breakdown of the key changes:
- Dollar-Denominated Fees: Spectrum fees will be fixed in US dollars, providing clarity and predictability for operators.
- Exchange Rate Stability: The exchange rate used for calculating fees will be the closing National Bank of Pakistan’s TT selling rate on the day before the auction, mitigating currency fluctuation risks.
- Flexible Payment Terms: A minimum of 50% of the spectrum fee is payable within one year of license issuance, with the remaining 50% payable in five equal annual installments at the KIBOR offer rate plus 3%. This eases the financial burden on operators.
- Longer License Duration: Licenses will now be issued for a period of 15 years, providing a longer return on investment horizon for telecom companies.
- Shift in Interest rate Benchmarks: The policy moves away from basing interest rates on the London Interbank Offered Rate (LIBOR), which has been phased out, and instead utilizes benchmarks issued by the State Bank of Pakistan.
Spectrum Bands Up for Auction
The Pakistan Telecommunication Authority (PTA) is preparing to release an Facts Memorandum (IM) outlining the details of the upcoming auction.The auction will encompass a wide range of spectrum bands, crucial for supporting both current and future mobile technologies, including 5G:
- 700 MHz Band: 15 MHz paired spectrum
- 1800 MHz Band: 3.6 MHz paired spectrum
- 2100 MHz Band: 20 MHz paired spectrum
- 2300 MHz Band: 50 MHz unpaired spectrum
- 2600 MHz Band: 190 MHz unpaired spectrum
- 3500 MHz Band: 280 MHz unpaired spectrum
The base prices for these bands have been established as follows:
- 700 MHz (1 MHz paired): $6.5 million
- 1800 mhz & 2100 MHz (1 MHz paired): $14 million
- 2300 MHz (1 MHz unpaired): $1 million
- 2600 MHz (1 MHz unpaired): $1.25 million
- 3500 MHz (1 MHz unpaired): $0.65 million
Addressing Industry Concerns and Promoting 5G Adoption
Beyond the auction specifics, the IT Ministry is proactively addressing broader challenges facing the telecom industry.Recognizing the importance of widespread 5G adoption,the Ministry has proposed several measures to the federal government:
- Tax Reduction for Local Manufacturing: Lowering taxes on locally manufactured 5G-compatible smartphones to increase affordability and market penetration.
- Duty-Free Import of 5G Equipment: Allowing duty-free import of 5G equipment to accelerate network deployment and reduce costs.
- Industrial Power Tariff: Implementing a dedicated industrial power tariff for the telecom sector through a joint task force involving the Ministry, Power Division, NEPRA, PTA, telecom operators, and power distribution companies. This aims to address the high energy costs that impact the sector’s profitability.
Industry Response and Future Outlook
the new policy has received a positive response from key industry stakeholders.PTCL has been mandated to participate in the auction, signaling the government’s commitment to broad participation. Jazz, a leading mobile network operator, has particularly welcomed the directive, with President of Jazz’s consumer division, Kazim Mujtaba, stating that it addresses “long-standing structural challenges” and will “translate into tangible progress, enabling sustained investment, network expansion and the delivery of affordable, high-quality connectivity nationwide.”
This policy directive marks a crucial step towards modernizing Pakistan’s telecommunications infrastructure and fostering a more competitive and innovative market. The upcoming spectrum auction is expected to attract significant investment, leading to improved connectivity, faster data speeds, and the wider availability of 5G services across the country.The success of these initiatives will be vital for Pakistan’s digital conversion and economic growth.
published in Dawn, January 9th, 2026
