Sale of smartphones on instalments: Telecom operators stuck in policy deadlock

ISLAMABAD: Pakistan’s telecom operators are locked in a policy deadlock over the sale of smartphones on instalments, slowing what industry officials describe as a critical step for mass 5G adoption and broader digital inclusion in the country.

The disagreement surfaced during consultations between the Ministry of IT and Telecommunication (MOITT), the Pakistan Telecommunication Authority (PTA) and telecom operators, where companies remained divided over how to deal with customers defaulting on handset instalments.

According to officials, Jazz and Ufone have backed an early rollout of the policy, arguing that affordable access to smartphones has become essential after the recent 5G spectrum auction. Zong, however, has yet to formally align with the proposed framework.

Telecom executives believe the next phase of Pakistan’s digital transition depends less on spectrum availability and more on whether ordinary consumers can afford 5G-capable devices.

“The real bottleneck in Pakistan’s digital inclusion journey is no longer just connectivity or spectrum — it is device affordability,” said Kazim Mujtaba, President Jazz GSM.

Mujtaba was of the view that millions may live within network coverage, but without access to affordable smartphones, they remain excluded from the opportunities of the digital economy.

“Smartphone financing now needs to become a national priority through a structured and enabling framework that can support mass-market adoption. While discussions and early pilots have emerged across regulators, banks, telecom operators, and industry players, efforts remain fragmented and limited in scale.

“A coordinated smartphone financing ecosystem — aligned across financial, telecom, taxation, and device management frameworks — is essential to expand access responsibly and at scale. Without this, smartphone access will remain constrained for millions, slowing Pakistan’s progress toward meaningful digital and financial inclusion,” he added.

Industry officials said Pakistan’s initial 5G rollout would largely strengthen existing 4G networks rather than instantly transform consumer experience nationwide. New 5G radio equipment will primarily be installed on existing sites, allowing operators to double network capacity and improve speeds in congested areas where user loads have exceeded planned limits.

“The first impact of 5G will actually be better 4G experience,” a senior telecom executive said during the session, explaining that most users would continue relying on 4G for the foreseeable future because 5G handset penetration remains low.

Operators said Pakistan’s mobile data consumption remains well below global averages despite rapid growth in video-based applications such as TikTok and YouTube. They warned that without additional spectrum and migration towards 5G, networks would face increasing congestion pressures over the next five years.

Executives also highlighted the strategic importance of the newly auctioned 700 MHz spectrum, describing it as the “gold spectrum” for 5G because of its ability to provide stronger rural and indoor coverage through lower frequency signals.

Industry representatives noted that one of the biggest long-term opportunities for 5G in Pakistan lies in Fixed Wireless Access (FWA), where wireless broadband could serve households in areas lacking fibre connectivity. Officials said the model would work similarly to earlier WiMAX-style outdoor receivers, offering fibre-like internet speeds in underserved areas.

However, telecom companies warned that handset affordability remains the biggest obstacle to mass adoption. According to industry estimates shared during the discussion, the cheapest 5G smartphones currently cost around Rs40,000, keeping the technology out of reach for a large segment of consumers.

Jazz has proposed creating a centralised default database under which SIMs registered against a defaulter’s CNIC could be blocked if instalments remain unpaid. The company argues that without a credible enforcement mechanism, operators cannot scale smartphone financing for millions of low-income consumers.

PTA and MOITT officials, however, expressed reservations over punitive measures involving CNICs and financial restrictions, maintaining that such actions fall outside the telecom regulator’s legal mandate.

“Blocking financial services or CNICs is not under PTA’s domain,” an official familiar with the discussions said.

The debate comes as Pakistan attempts to accelerate digital connectivity while balancing affordability concerns, taxation pressures and infrastructure gaps. Telecom operators complained that Pakistan remains among the most heavily taxed telecom markets, with taxes and duties significantly increasing handset costs.

Industry officials also pointed to persistent right-of-way problems for fibre deployment, warning that 5G performance would remain limited unless operators are allowed to expand fibre backhaul infrastructure across cities and highways.

While operators have begun limited trial deployments of 5G sites, executives acknowledged that nationwide commercial rollout would take years to mature, with initial deployments focused mainly on major urban centres.

Copyright Business Recorder, 2026