Pakistan’s delays in assigning spectrum could lead to significant economic losses, with a two-year delay potentially costing $1.8 billion (Rs500 billion) in GDP between 2025 and 2030, and a five-year delay resulting in losses of up to $4.3 billion (Rs1.168 trillion), according to the Global System for Mobile Communications Association (GSMA).Â
The telecom industry body has urged the government to prioritize digital infrastructure development over revenue generation in the upcoming 2025 spectrum auction.
The GSMA, a global representative body of mobile network operators, has raised concerns over Pakistan’s spectrum policy, warning that the country has one of the lowest assigned mobile spectrum allocations in the Asia-Pacific region. While the government’s Digital Pakistan initiative, launched in 2018, has expanded mobile broadband coverage to 83% of the adult population—compared to just 15% in 2010—Pakistan’s telecom sector now faces critical challenges, including high inflation, currency depreciation, and rising energy costs, which are straining network investment.
Pakistan has allocated only 270 MHz of spectrum for mobile services, significantly lower than the Asia-Pacific average of over 700 MHz. Past spectrum auctions in 2014 and 2021 resulted in unsold bandwidth due to high reserve prices, slowing 4G expansion and negatively impacting digital growth. GSMA estimates that if all available spectrum had been assigned in previous auctions, Pakistan could have gained an additional $300 million (Rs80 billion) in economic benefits.
The upcoming 2025 spectrum auction is expected to make nearly 600 MHz available across key frequency bands, including 700 MHz, 1800 MHz, 2.1 GHz, 2.3 GHz, 2.6 GHz, and 3.5 GHz. GSMA has urged policymakers to ensure fair pricing to avoid repeating past auction failures. The organization noted that spectrum costs in Pakistan have risen dramatically, with spectrum charges as a percentage of recurring revenue increasing from 11% in 2014 to 20% in 2022. This is largely due to spectrum fees being denominated in US dollars rather than local currency, making operators vulnerable to exchange rate fluctuations.
GSMA also highlighted that operator revenue per MHz is declining while bandwidth demand continues to rise, making the current pricing model unsustainable. It warned that excessive pricing could hinder future investment in mobile networks, further slowing Pakistan’s digital transformation.
To ensure sustainable growth, GSMA has recommended setting reserve prices conservatively, lower than in previous auctions, to prevent unsold spectrum and allow the market to determine fair value. It also urged the government to denominate spectrum fees in Pakistani rupees to shield operators from currency volatility. Additionally, it suggested introducing payment flexibility through installment options over the duration of the license and ensuring that licensing obligations do not inflate costs for operators.
With the upcoming spectrum auction offering a critical opportunity to reshape Pakistan’s telecom landscape, GSMA emphasized the need for a market-driven approach. If spectrum pricing remains excessively high, it could stall 5G development and limit Pakistan’s ability to compete in the global digital economy.
