EDITORIAL: The long-awaited 5G spectrum auction carries far-reaching importance for Pakistan’s economy, digital vision, IT export growth and technological ambitions. It goes without saying then that it is of the utmost importance that the government ensures that the spectrum’s sale — plagued by delays much to the consternation of IT and telecom industry stakeholders — not only happens soon but is also structured in a way that brings the goal of the country’s digital transformation within reach.
In this regard, the authorities would do well to heed the concerns raised by telecom operators and other stakeholders at the recent Spectrum Advisory Committee meeting chaired by Finance Minister Muhammad Aurangzeb.
At the meeting, representatives of the Telecom Operators Association of Pakistan and the Global System for Mobile Communications Association (GSMA) flagged major flaws in spectrum policy, including high reserve prices and a regulatory framework that has discouraged investment in the telecom and IT sectors. They warned that these shortcomings were delaying the rollout of faster, more reliable networks, stifling IT export growth and denying large segments of the population the economic opportunities of genuine digital inclusion.
With the 2014 and 2021 spectrum auctions leaving significant portions of spectrum unsold — reducing the supply available to mobile operators and in turn slowing the rollout and adoption of 4G — the apprehensions over high reserve prices are entirely understandable.
The high prices in past auctions have left Pakistan with the lowest spectrum availability in the Asia-Pacific, undermining mobile infrastructure development, network coverage and service quality.
The GSMA and telecom operators’ call for the 5G auction to prioritise strengthening Pakistan’s digital infrastructure over maximising short-term government revenue, therefore, carries considerable merit.
Telecom operators, in particular, emphasised the need for fair pricing that reflects Pakistan’s market realities, along with rupee-denominated valuation to offset currency fluctuation risks. They called for payment terms aligned with the 20-year licence period alongside measures to incentivise 5G adoption through duty-free imports of equipment and smart phones.
Operators also urged the resolution of long-pending spectrum legal disputes and stressed the importance of setting realistic rollout obligations that reflect operational challenges, such as flood-related infrastructure damage.
The demand pertaining to setting fair pricing for the spectrum auction is especially significant as that could lay the foundation for the long-term strengthening of Pakistan’s digital infrastructure. It must be recognised that a substantial portion of the revenues earned by telecom operators and other stakeholders will necessarily have to be reinvested, whether in expanding network coverage to underserved regions, upgrading existing infrastructure to handle rising data demand or fortifying systems against climate-related disruptions.
Only by allowing operators the financial space to make these reinvestments can Pakistan hope to build a robust digital ecosystem capable of supporting its economic ambitions and the promise of inclusive digital access. The ambitious USD 25 billion target in IT exports over the next five years, for instance, will remain elusive if the spectrum auction faces further delays or is priced unrealistically.
Here, the government may do well to rethink the sale process for the spectrum. India, for instance, announced last year that it would administratively allocate spectrum rather than hold an auction after Elon Musk’s Starlink voiced concerns over the latter method. Research shows that flaws in auction design had driven spectrum prices disproportionately high in India, resulting in under-utilisation and slower network expansion.
Under administrative allocation, operators submit proposals, outlining their services, rollout plans, technology and other commitments, instead of spectrum simply going to the highest bidder, while many countries adopt a hybrid approach, combining both methods.
To truly align the spectrum sale with Pakistan’s economic and digital ambitions, the government must move beyond past inefficient approaches and adopt a more innovative, forward-looking strategy, as clinging to outdated models risks undermining the promise of 5G altogether.
Copyright Business Recorder, 2025