Import of items: Telecom operators demand 5G with free spectrum, zero taxes for 5 yrs

ISLAMABAD: Telecom operators have demanded 5G with a free spectrum for five years and zero taxes on the import of equipment and 5G handsets/devices for the launch of services in the country, official documents revealed.

Official sources revealed that the government is considering upon several proposals to launch 5G at least in major cities of the country, before their ends. The previous government had planned to auction 5G spectrum latest by end March 2023 in the country with the initial launch in big cities. However, due to political instability in the country, it was not made possible, official sources added.

The industry stakeholders as well as senior government officials are terming it next to impossible while some are of the view that 5G launch is difficult even by end of December 2023, keeping in mind the economic situation in the country in general and the telecom market in particular.

Official documents revealed that telecom operators have submitted some recommendations to the government for the launch of 5G services in the country.

Operators demanded the introduction of innovative, radically different and implementable 5G policy with following to be considered; (i) free spectrum for first five years with zero taxes on import of equipment and 5G handsets/device, (ii) any proposal of auction should be after five years, once the use cases have developed and (iii) policy intervention required to ban 2G/3G handset local production as well as import.

The Pakistan Telecommunication Authority (PTA) while responding to telecom operators’ demands stated that the government of Pakistan will issue a policy directive for the launch of 5G in the country.

Based on the directions of the government, consultant will be hired to provide recommendation who will work in close consultation with stakeholders, carry out a detailed market study, review international regulatory practices for 5G launch and other relevant aspects. Cellular mobile operators (CMOs) may like to share their input for consideration and subsequent development of recommendations for the government, the Authority responded.

The Authority has also stringed several challenges and impediments including low handset and optic fibre cable (OFC) penetration, increasing inflation, low average revenue per user (ARPU), and rising operating expenses (OPEX) coupled with high taxation to launch 5G services in the country.

To begin with, 5G handset penetration in the Pakistani market is a major impediment; the percentage of 5G-supported handsets in the country is less than one per cent. While many developed countries have deployed 5G technology, Pakistan is beset with challenges in offering the said services, said the Authority.

Further low OFC penetration, fewer potential use cases, lower tower density, increasing inflation, low ARPU, and rising OPEX such as an increase in the prices of fuel and electricity, coupled with high taxation are some of the key factors that can potentially impact 5G launch.

International projections suggest that by the end of 2026, 5G will attract 3.5 billion subscriptions, thereby generating approximately 45 percent of the world’s total mobile traffic data. The Authority further stated that the introduction of 5G is extremely important for Pakistan to keep pace with regional developments. Despite challenges, which need to be addressed before a comprehensive 5G policy is issued by the government.

Copyright Business Recorder, 2023