By Staff Reporter
ISLAMABAD: The government has cleared the way for a long-awaited auction of spectrum for next-generation mobile services, addressing key telecom industry demands by pegging fees to the dollar and shifting interest rates to local benchmarks, according to a policy directive issued by the Ministry of Information Technology and Telecommunication.
The move, approved by an auction supervisory committee chaired by Finance Minister Muhammad Aurangzeb, sets base prices and volumes across six bands, paving the path for 5G rollout in a market where operators have long complained about structural hurdles to investment and expansion.
The Pakistan Telecommunication Authority will conduct the sale through a transparent and competitive process, covering 15 megahertz of paired spectrum in the 700 MHz band, 36 MHz paired in the 1800 MHz band, 20 MHz paired in the 2100 MHz band, 50 MHz unpaired in the 2300 MHz band, 190 MHz unpaired in the 2600 MHz band and 280 MHz unpaired in the 3500 MHz band.
Base prices are fixed at $6.5 million per MHz for paired spectrum in the 700 MHz band, $14 million per MHz for both the 1800 MHz and 2100 MHz bands, $1 million per MHz for unpaired in the 2300 MHz band, $1.25 million per MHz in the 2600 MHz band and $0.65 million per MHz in the 3500 MHz band.
Spectrum fees will be denominated in dollars but reflected in licenses in equivalent Pakistani rupees, converted at the National Bank of Pakistan’s telegraphic transfer selling rate on the day before the auction.
Payment terms include a one-year moratorium from license issuance, during which no payments or markup are due. Licensees can then pay the full fee by the first anniversary or opt for a deferred plan, with at least 50% due by then and the balance in five equal annual installments starting from the second anniversary.
Deferred amounts will accrue markup at one-year Karachi Interbank Offered Rate plus 3%, based on rates published by the State Bank of Pakistan on relevant payment dates. Early repayment, in full or part, is allowed without penalty, though markup applies up to the final payment date.
Licenses will run for 15 years and include provisions for spectrum trading and sharing under the approved regulatory framework. The assignment is technology-neutral, usable for all existing and future advanced mobile technologies.
Both existing cellular mobile operators and new entrants can bid, subject to a 40% cap on total post-auction spectrum holdings. Additional limits include 55 MHz aggregate in low-band IMT spectrum across the 700 MHz, 850 MHz and 900 MHz bands, 140 MHz in the 2600 MHz band and 200 MHz in the 3500 MHz band.
Post-auction, all existing operators must comply with a spectrum rationalisation plan issued by the PTA in consultation with the Frequency Allocation Board, aimed at optimising contiguous holdings in the 1800 MHz and 2100 MHz bands within a PTA-determined timeframe.
The PTA will soon release an information memorandum outlining the auction mechanism, eligibility criteria and participation steps, with the sale to follow in the minimum reasonable time. Phased rollout obligations for next-generation services — including city coverage, site numbers, fiber-to-the-tower connectivity and enhanced quality-of-service standards — will be baked into licenses as recommended by an advisory committee, targeting faster mobile broadband penetration and better nationwide service. Operators winning the spectrum will see current rollout obligations replaced with new ones, plus revised financial instruments, per the memorandum’s mechanism.
The directive shifts from the 2021 framework’s use of the London Interbank Offered Rate for interest, aligning with local benchmarks amid broader industry pleas. The ministry has urged the federal government to consult stakeholders on measures like cutting taxes on 5G-compatible smartphones to boost local manufacturing and market penetration, and allowing duty-free imports of 5G equipment to speed adoption.
It also called for an industrial power tariff for telecoms via a joint task force involving the ministry, Power Division, National Electric Power Regulatory Authority, PTA, operators and distribution companies. The PTA has required Pakistan Telecommunication Co. to join the auction, while market leader Jazz welcomed the directive. “Long-standing structural challenges faced by the telecom sector have been addressed,” said Kazim Mujtaba, president of Jazz’s consumer division. “These will translate into tangible progress, enabling sustained investment, network expansion and the delivery of affordable, high-quality connectivity nationwide.”
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