Telcos and GSMA Make Major Demands Ahead of Pakistan’s 5G Auction

Pakistan’s telecom operators and the Global System for Mobile Communications Association (GSMA) have presented a series of demands to the government, seeking significant concessions ahead of the long-awaited 5G spectrum auction. These include a lower reserve price than previous auctions, rupee-denominated pricing, 15-year interest-free payment plans, and duty-free imports of equipment and smartphones. However, the Spectrum Advisory Committee, chaired by Federal Minister for Finance and Revenue Muhammad Aurangzeb, stopped short of offering any immediate relief. According to reports, the telecom sector’s proposals were met with no concrete assurances, leaving the industry in limbo as it awaits clarity on the auction framework. During the meeting, GSMA and the Telecom Operators Association of Pakistan warned that delays in the spectrum release could cost the country between $1.8 billion and $4.3 billion in economic benefits over the next five years. Both organizations highlighted several barriers to the 5G rollout, including unresolved merger decisions, a lack of a clear spectrum roadmap, and ongoing legal disputes, particularly over the 2600 MHz band, which is currently claimed by Sun TV. The operators emphasized the need for fair pricing aligned with Pakistan’s economic realities, rupee-based spectrum fees to mitigate currency fluctuation risks, and payment terms spread over the 20-year license period. They also called for a five-year moratorium on payments, 15 years of interest-free installments, and duty-free imports of 5G equipment and smartphones to incentivize adoption. GSMA officials noted that spectrum costs in Pakistan are already among the highest globally, accounting for 20 percent of operators’ revenue. They urged the government to adopt a balanced approach to ensure sustainable network investment. Their recommendations included setting reserve prices conservatively, lower than previous auctions, denominating fees in local currency, offering flexible payment options, and deducting the costs of license obligations from spectrum fees to ease financial pressures on operators. The association also stressed the importance of resolving outstanding legal, regulatory, and fiscal issues, particularly disputes over the 2600 MHz band, to ensure a level playing field. They further called for rollout obligations to account for challenging operating conditions, such as security concerns in FATA and Balochistan and damages caused by recent floods.