Mobile network infrastructure and digital connectivity reflecting IT Ministry decisions on Pakistan’s upcoming telecom spectrum auction.
The Ministry of Information Technology and Telecom has finalized important policy decisions for the upcoming auction of next-generation mobile spectrum. These decisions address several long-standing concerns raised by the telecom industry, especially around pricing, currency risk, and interest rates.
By fixing the dollar rate method and linking interest payments to local benchmarks, the ministry aims to provide more clarity and stability for telecom operators. The new policy directive sets the foundation for the Pakistan Telecommunication Authority to move forward with the auction process.
PTA to Release Auction Details Soon
Following the release of the policy directive, the Pakistan Telecommunication Authority is expected to issue the information memorandum soon. This document will outline all auction rules, conditions, and requirements for existing telecom operators as well as any new companies interested in entering the market.
The information memorandum is an important step, as it officially opens the process and allows bidders to prepare their financial and technical plans.
Dollar Rate Fixed for Spectrum Fees
Under the new policy framework, spectrum prices will be set in US dollars. However, the exchange rate will not fluctuate throughout the licence period. Instead, it will be calculated using the National Bank of Pakistan’s TT selling rate on the day before the auction takes place.
This approach reduces uncertainty for telecom companies by removing the risk of sudden currency changes after the auction. Industry players have long requested this clarity, as exchange rate volatility has previously made long-term planning difficult.
Payment Structure and Interest Rates
The ministry has also outlined clear payment terms for the spectrum fees. Telecom companies will be required to pay at least 50 percent of the total spectrum price within one year of receiving the licence.
The remaining 50 percent will be paid over five equal annual instalments. These instalments will be charged at the KIBOR offer rate plus three percent. This replaces the earlier system that linked interest rates to the London Interbank Offered Rate, which was used under the 2021 policy.
By shifting to a local benchmark, the government aims to make financing more predictable and better aligned with Pakistan’s economic conditions.
Licence Duration Set at 15 Years
Under the new framework, spectrum licences will be issued for a period of 15 years. This duration gives operators enough time to recover their investments and plan for long-term network expansion.
A longer licence period is also expected to encourage investment in advanced technologies such as 5G, which require significant upfront spending.
Details of Spectrum Bands on Offer
The spectrum auction will include a wide range of frequency bands, covering both paired and unpaired spectrum. These bands are suitable for expanding existing mobile services and launching next-generation networks.
The PTA will auction 15 MHz of paired spectrum in the 700 MHz band and 3.6 MHz of paired spectrum in the 1800 MHz band. Another 20 MHz of paired spectrum will be offered in the 2100 MHz band.
In addition, the unpaired spectrum will be auctioned across several bands. This includes 50 MHz in the 2300 MHz band, 190 MHz in the 2600 MHz band, and 280 MHz in the 3500 MHz band. These bands are commonly used for high-speed mobile data services.
Base Prices Announced for Each Band
The IT ministry has also approved base prices for all spectrum bands included in the auction. For the 700 MHz band, the base price has been set at 6.5 million dollars per 1 MHz of paired spectrum.
The 1800 MHz and 2100 MHz bands will have a higher base price of 14 million dollars per 1 MHz of paired spectrum. For an unpaired spectrum, the base price is set at 1 million dollars per 1 MHz in the 2300 MHz band.
The base price for the 2600 MHz band is 1.25 million dollars per 1 MHz, while the 3500 MHz band has been priced at 0.65 million dollars per 1 MHz. These prices will serve as the starting point for bidding during the auction.
Addressing Broader Industry Concerns
Beyond the auction itself, the IT ministry has acknowledged wider challenges facing the telecom sector. It has asked the federal government to take additional steps in consultation with industry stakeholders.
One key recommendation is to reduce taxes on 5 G-compatible smartphones. The ministry believes lower taxes could help increase adoption and support local manufacturing of devices.
Another proposal involves allowing duty-free imports of 5G equipment. This measure is intended to speed up network rollout and reduce costs for telecom operators.
Power Tariff Proposal for Telecom Sector
The ministry has also highlighted the need for lower electricity costs for telecom companies. It has been suggested to introduce an industrial power tariff specifically for the telecom sector.
To achieve this, the ministry has proposed forming a joint task force. This group would include representatives from the IT ministry, the Power Division, Nepra, PTA, telecom operators, and power distribution companies.
Lower power costs could help operators manage expenses and invest more in network upgrades.
Industry Response to the Policy
The PTA has made it mandatory for PTCL to participate in the upcoming spectrum auction. Meanwhile, Jazz has welcomed the new policy directive.
Kazim Mujtaba, president of Jazz’s consumer division, said the policy addresses several long-standing structural issues faced by the telecom industry. He added that these changes are expected to support continued investment, network expansion, and the delivery of affordable and reliable connectivity across the country.
Overall, the new policy framework is seen as a step toward creating a more stable and investor-friendly environment for Pakistan’s telecom sector.
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