Telecom power tariff framework: PM directs task force to finalise recommendations
ISLAMABAD: The Prime Minister’s Office (PMO) has directed a special task force, in consultation with the Power Division and Finance Division, to finalise recommendations, including financial implications and a proposed mechanism for absorbing the tariff differential, for providing industrial electricity tariffs to cellular companies for consideration by the federal government.
The direction follows a joint letter addressed to Prime Minister Shehbaz Sharif by the chief executive officers (CEOs) of Jazz, CMPak (Zong), PTMIL (Ufone and Telenor) and PTCL, seeking government intervention to extend industrial electricity tariffs to licensed telecommunications infrastructure.
The telecom operators maintained that the sector had repeatedly been recognised as an industry under government policies and legislation but continued to be denied industrial electricity tariff treatment, exposing its infrastructure to substantially higher commercial electricity rates.
On June 29, 2026, a task force headed by the Secretary, Ministry of Information Technology and Telecommunication (MoIT&T), was constituted to examine and implement industrial power tariffs for the telecom sector, deliberate upon smart-grid solutions and explore dedicated power feeders to mitigate prolonged electricity outages.
The task force comprises the Chairman Pakistan Telecommunication Authority (PTA), representatives of the Power Division and National Electric Power Regulatory Authority (NEPRA), telecom operators, distribution companies (DISCOs) and Member Telecom, MoIT&T.
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According to the operators, the task force subsequently held its first meeting on August 4, 2026, under the chairmanship of the Special Secretary, MoIT&T, with participation from relevant government entities, DISCOs and telecom industry representatives.
The telecom companies have now sought a policy decision to translate the initiative into a revised electricity tariff arrangement, arguing that rising power costs are undermining investment in 5G networks, fibre connectivity and artificial intelligence (AI)-ready data centres.
The operators stated that the telecom industry had committed approximately USD 2 billion in investment over the next three years for deployment of 5G network infrastructure and expansion of fibreisation. They are also investing in AI-ready, Tier-III data centre infrastructure to meet the growing computing and connectivity requirements of Pakistan’s digital economy.
They argued that the continued application of commercial electricity tariffs to telecommunications infrastructure was becoming increasingly unsustainable as power consumption rises with the deployment of 5G technology and AI-enabled services.
According to the CEOs, commercial electricity tariffs applicable to telecom sites have increased by approximately 197 percent since 2018, while fuel costs have risen around 300 percent. In contrast, average revenue per user (ARPU) has declined by approximately 22 percent during the same period, alongside an additional five percent withholding tax burden.
The operators contended that the classification of telecommunications as an industrial undertaking was supported by existing policy and legislation.
They cited the Mobile Cellular Policy, 2004, and a subsequent notification issued by the Ministry of Industries and Production on April 20, 2004, which, according to the industry, classified telecommunications as an industry.
They also referred to the Finance Act, 2021, which amended Section 2(29C) of the Income Tax Ordinance to expressly include PTA-licensed telecom operators within the definition of an industrial undertaking for taxation purposes.
The companies further cited a precedent set by Nepra, which extended industrial electricity tariffs to dairy and poultry farms on November 9, 2018, arguing that the telecom sector had an equally strong, if not stronger, claim to industrial tariff treatment.
The operators also referred to a policy directive issued by MoIT&T on January 6, 2026, concerning the auction of International Mobile Telecommunications (IMT) spectrum. Under paragraph (n)(vii) of the directive, a joint task force was mandated to examine and implement industrial electricity tariffs for the telecom sector, alongside smart-grid solutions and dedicated power feeders to address prolonged outages.
The industry maintained that the proposed tariff rationalisation would provide financial relief to operators and enable them to redirect savings towards 5G deployment, rural connectivity and fibre-to-the-home (FTTH) expansion.
The CEOs argued that extending industrial tariffs to cellular towers, switching centres, data centres and other eligible telecommunications infrastructure would reduce operating costs and strengthen the financial sustainability of telecom operations.
They also claimed that tariff rationalisation could benefit DISCOs by encouraging operators to increase reliance on the national electricity grid rather than shifting towards solar and other off-grid arrangements in response to prohibitive commercial electricity prices.
According to industry projections, extending industrial tariffs to eligible telecom infrastructure could reduce the growth of solar off-grid operations from 15 percent to 5-7 percent while increasing grid utilisation by an estimated 15-20 percent.
The operators maintained that higher grid consumption could offset potential revenue losses for DISCOs over two to three years through increased electricity sales and improved utilisation of existing capacity.
These projections, however, represent industry estimates and have not been independently verified.
To prevent misuse of the proposed tariff concession, the telecom companies proposed a strict eligibility framework to be certified by PTA.
Eligible infrastructure would include core hub sites, base transceiver stations (BTS), cellular towers, mobile switching centres (MSCs), exchanges, AI and cloud data centres, FTTH nodes and network operating centres (NOCs).
Corporate administrative offices, customer service centres, franchises and retail outlets would remain excluded from the proposed arrangement.
The operators also pledged that savings generated through electricity tariff rationalisation would be reinvested directly into 5G network expansion, rural connectivity and FTTH fibreisation.
They maintained that the proposed safeguards would ensure that the benefit remained confined to essential telecommunications infrastructure rather than extending to companies’ broader commercial operations.
The telecom companies have requested the federal government to issue a policy directive extending industrial electricity tariffs to telecommunications infrastructure.
Alternatively, where reclassification under the existing tariff framework requires a separate regulatory process, they proposed the creation of a dedicated “Digital/Telecom Infrastructure” consumer category carrying industrial electricity rates.
They have also sought directions to DISCOs to implement the revised tariff category within a clearly defined timeframe.
The operators said the proposed reform was essential for accelerating digital infrastructure investment, improving the competitiveness of Pakistan’s telecom sector and advancing the government’s Digital Nation Pakistan vision.
Copyright Business Recorder, 2026