Industry against pricing 5G in dollars

Argues it will impede country's digital growth; cites PIA sale in rupees

ISLAMABAD:

Telecom service providers have hit out at the government over linking the auction of 5G spectrum with the US dollar, saying this policy places financial strain on the telecom industry and delays network rollout.

Pricing spectrum in foreign currency and relying on heavy upfront payments places avoidable financial strain on the sector and slows network rollout. A pragmatic, long-term approach – aligned with national objectives and grounded in domestic economic realities – is essential to deliver affordable internet at scale and unlock Pakistan's digital growth, said Aamir Ibrahim, Chief Executive Officer of Jazz.

The Economic Coordination Committee (ECC) of the cabinet has recently approved 5G spectrum rollout by linking its price with the US dollar, which has sparked calls for review by the telecom operators.

They have also drawn attention to the recent bidding for Pakistan International Airlines (PIA), which invited offers in Pakistani rupee.

Pakistan's digital future depends on whether the upcoming policy decisions are shaped by economic realism rather than short-term fiscal considerations, said Ibrahim.

Drawing a direct parallel with the PIA privatisation, he emphasised that the spectrum policy must be designed to enable long-term national value and not to maximise immediate revenue. He noted that telecom operators earn almost entirely in rupees, invest locally and operate in a highly price-sensitive market.

The telecom industry says that comparison with PIA is instructive. The airline's privatisation succeeded not because it generated large upfront proceeds, but because policymakers prioritised sustainability, transparency and competitiveness.

The government realised approximately Rs10 billion in direct revenue, while securing commitments of nearly Rs125 billion to reviving the airline's operations.

The process restored credibility precisely because it shifted focus from extraction to reform, signalling that national assets can be aligned with long-term economic goals, said the telecom players.

A similar mindset is now required for digital connectivity, which underpins nearly every growth sector of the economy, they said and mentioned that mobile broadband enables financial inclusion, freelancing, e-commerce, digital health and e-governance, yet Pakistan continues to face acute capacity constraints.

With only 274 MHz of spectrum allocated nationwide, the country is attempting to support a growing digital economy on limited infrastructure, resulting in slower speeds, service quality challenges and constrained innovation.

According to the industry, the economic consequences are already visible. Freelancers contributed around $400 million in remittances between July 2024 and March 2025, but unreliable connectivity continues to limit scale and productivity.

Nearly two-fifths of adults remain financially excluded, while digital banking and microfinance struggle to expand without consistent network performance.

At the same time, telecom service providers operate with one of the lowest average revenues per user globally, restricting their ability to reinvest when spectrum costs are misaligned with sector realities.

The industry stressed that the government's decision to release more than 600 MHz of new spectrum is, therefore, a critical reform step. What will determine its impact is auction design, it said, adding that high reserve prices, dollar-denominated costs and rigid payment structures risk delaying deployment and diluting long-term economic returns.

By contrast, pricing spectrum in local currency as elsewhere globally as well as within the region, enabling installment-based payments and providing clarity on future availability can accelerate rollout and attract sustained investment.

The cost of delay is substantial. GSMA analysis estimates that a two-year delay in assigning new spectrum could cost Pakistan $1.8 billion in gross domestic product, which will rise beyond $4.3 billion if delayed by five years. These losses translate directly into weaker exports, fewer jobs and slower innovation.

Pakistan has demonstrated through PIA that pragmatic reform can restore confidence and unlock value. Applying the same discipline to spectrum policy would transform connectivity from a one-time revenue exercise into a long-term national asset – laying the foundation for inclusive growth, digital competitiveness and economic resilience, the industry said.