5G and the need for prudent decision-making

Pakistan’s digital ecosystem set to expand into a new realm, resulting in economic development and growth.

With the announcement from Caretaker Prime Minister Anwarul Haq Kakar about completing the launch of the 5G auction in the next ten months, Pakistan’s digital ecosystem is set to expand into a new realm, resulting in economic development and growth.

The 5G technology is designed to offer “high speeds, superior reliability and negligible latency; it will impact every industry, making safer transportation, remote healthcare, precision agriculture, digitised logistics — and more — a reality.”

Although Pakistan started acquiring 5G in 2021, its efforts were marred by complex policy direction, the telecom industry’s resistance due to high cost, and judicial intervention.

The telecom industry in Pakistan is hesitant to adopt 5G technology as it believes that it would not be a practical option without the complete penetration of the 4G network. It is still being determined whether it is a valid concern or not. However, the major reason behind this reluctance is the high cost of the 5G auction, which is estimated to be around $330 million or more.

The lack of access to 5G-supported mobile handsets among the general public is another factor holding back progress in this area. This is due to the heavy taxes imposed on these handsets, commonly known as the PTA tax, which are the highest in the region. Currently, less than one per cent of the population has access to 5G-supported handsets, which is a significant hindrance. Additionally, building the necessary infrastructure requires a considerable investment, which poses another challenge.

The Government of Pakistan is, however, determined to introduce the revolutionary 5G technology into the country. To ensure this, an advisory committee has been formed under the Ministry of Finance to push the proposal forward. The government hopes the upcoming auction will attract new bidders and investors, thus giving a much-needed boost to the struggling economy. The auction proceeds are expected to act as a catalyst for economic growth.

The IT sector boasts $2.6 billion in exports and employs approximately 150,000 professionals in the country. According to the Minister of Information Technology, Dr Umar Saif, with the introduction of 5G and further increase in the penetration of 4G, the financial benefit to the economy could come to something around $10 billion in the next three years.

Pakistan is the world’s seventh largest mobile phone market, with 190 million users. As per the IT Minister, the government plans to encourage local production of high-quality mobile phones to address the market’s lack of 5G-supported mobiles.

Pakistan’s freelancer market is currently ranked fourth globally in size, and millions of people are earning a staggering income from this avenue. With the development of 5G technology, this segment could become even more effective. Recent research by US technology company Qualcomm supports this argument, showing that the new technology is set to generate over 2.5 million employment opportunities and revenue of over $12 trillion globally before the end of the decade. Pakistan needs institutional and stakeholder support to make the most of this opportunity.

Notwithstanding infrastructural and financial issues confronting the IT industry, the problems related to institutional capacity have significantly delayed 5G’s arrival in Pakistan. Take the case of spectrum, for instance.

In telecom jargon, spectrum relates to an invisible entity that enables devices, such as mobile phones, televisions, microphones, satellites, etc, to communicate wirelessly using radioactive waves. Spectrums are used in various sizes, depending on requirements, and they come at a cost. An idle spectrum is akin to an unused iron, gathering rust. Pakistan has enough spectrum to operate 5G, but it does not have the right to use it because of institutional hurdles.

Pakistan currently possesses 269.2 megahertz of spectrum, which can be doubled with the spectrums held by the Pay TV operator, SNL, and the CMPak. Both parties retain 140 MHz and 1.6 MHz of spectrum respectively and have gone into litigation to control them. It is crucial that the respectable courts, in the interest of the public, lift the stay. The advisory committee must also work towards resolving the two-decade-long legal disputes, which have negatively affected the national treasury and deprived people of their right to access the latest technological advancements.

In the near future, additional spectrums will become necessary. Due to the high cost of purchase in dollars, telecom companies are hesitant to make a purchase. As a result, the government must intervene with policy measures to create a win-win situation for all stakeholders. However, the telecom industry should focus on maximising profits and providing consumers with new, fast and unbeatable technologies, such as 5G, that offer value for money.

Other areas waiting for reforms include consolidation and penetration of optic fibre.

Based on reliable reports, influential business magnates are allegedly involved in the litigation and are attempting to exploit the spectrum sale for their gain. It is urged that the courts examine this issue from this perspective and make a ruling that permanently ends such detrimental actions that go against the interests of the public and Pakistan’s economic development.

Published in The Express Tribune, November 30^th, 2023.

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