Pakistan’s Ministry of Information Technology and Telecommunication has issued its long-awaited spectrum auction policy directive, setting the stage for the country’s most ambitious frequency release ever. With nearly 560 MHz on offer across six bands, the auction represents a potential turning point for a nation struggling with chronic spectrum scarcity.
Yet as operators and analysts digest the details, a familiar tension emerges: is this genuinely a reform-oriented framework designed to accelerate digital transformation, or another revenue-maximization exercise dressed in progressive language?
The spectrum scarcity crisis
Pakistan operates as one of Asia’s most spectrum-starved markets. With only 274 MHz of commercially deployed spectrum serving 240 million people, Pakistani operators face an impossible task. The GSMA estimates Pakistan’s allocation at roughly one-third of the Asia-Pacific average of 700 MHz.
Federal Minister for IT and Telecommunications Shaza Fatima Khawaja has acknowledged the crisis, “We are a spectrum-starved country. To put this in perspective, Bangladesh, with about two-thirds of our population, provides 600 MHz.”
| Timeline of Spectrum Auctions in Pakistan | |||||
|---|---|---|---|---|---|
| Year | Band | Spectrum Offered (MHz) | Spectrum Sold (MHz) | Per MHz Base Price ($ million) | Remarks |
| 2004 | 900/1,800 | 13.6 | 13.6 | – | Bought by Telenor & Warid |
| 2014 | 850 | 7.38 | 0 | 291 | UNSOLD (was reserved for some new entrant) |
| 1,800 | 20 | 10 | 21/MHz (210) | 10 MHz sold to Zong at base price | |
| 10 MHz remained unsold | |||||
| 2,100 | 30 | 30 | 29.5/MHz (295) | 10 MHz sold to Jazz | |
| 10 MHz sold to Zong | |||||
| 5 MHz sold to Ufone | |||||
| 5 MHz sold to Telenor | |||||
| 2016 | 850 | 10 | 10 | 39.5/MHz (395) | Bought by Telenor (single bidder) |
| 2017 | 1,800 | 10 | 10 | 29.5/MHz (295) | Bought by Jazz (single bidder) |
| 2021 | 1,800 | 12.8 | 9 | 31/MHz | 9 MHz sold to Ufone at base price |
| 3.8 MHz remained unsold | |||||
| 2,100 | 15 | 0 | – | Unsold | |
The consequences are tangible. Average mobile broadband speeds hover between 15-20 Mbps while regional leaders deliver 40-60 Mbps. Monthly data consumption has exploded from 3 GB per customer in 2019 to 8.8 GB in 2025, yet infrastructure has remained largely static.
What’s on the block
The directive authorizes PTA to auction spectrum across six bands with 15-year technology-neutral licenses.
| Band | Amount | Type | Base Price (per MHz) | Total Base Value |
| 700 MHz | 15 MHz | Paired | $6.5 million | $97.5 million |
| 1800 MHz | 3.6 MHz | Paired | $14 million | $50.4 million |
| 2100 MHz | 20 MHz | Paired | $14 million | $280 million |
| 2300 MHz | 50 MHz | Unpaired | $1 million | $50 million |
| 2600 MHz | 190 MHz | Unpaired | $1.25 million | $237.5 million |
| 3500 MHz | 280 MHz | Unpaired | $0.65 million | $182 million |
The distinction between paired and unpaired spectrum is technically significant. Paired spectrum uses Frequency Division Duplex (FDD), employing two separate frequency bands for simultaneous two-way communication, one for uplink (device to tower) and one for downlink (tower to device). This full-duplex approach suits voice-centric networks requiring symmetrical communication.
Unpaired spectrum uses Time Division Duplex (TDD), where a single frequency band handles both directions by allocating different time slots for each. While only one direction transmits at any given moment, TDD offers greater flexibility for asymmetric data usage, well-suited for modern consumption patterns where downloads heavily outweigh uploads. The bulk of this auction, 520 MHz of the 558.6 MHz total, is unpaired TDD spectrum in the higher bands, reflecting the government’s 5G ambitions.
Payment terms and flexibility
The directive introduces several operator-friendly provisions. A one-year moratorium allows licensees breathing room before payments commence. Thereafter, operators can choose between full upfront payment or a deferred option, 50% at the first anniversary, with the remainder spread over five annual installments at KIBOR plus 3%.
Spectrum assignments are technology-neutral, allowing deployment for 4G, 5G, or future technologies. Spectrum trading and sharing provisions offer operational flexibility. A 40% overall spectrum cap prevents market concentration, with additional limits of 55 MHz on aggregate low-band holdings and band-specific caps of 140 MHz for 2600 MHz and 200 MHz for 3500 MHz.
The directive also acknowledges broader sectoral challenges, proposing a joint task force to address industrial power tariffs, infrastructure sharing, fiber backhaul expansion, and duty-free 5G equipment imports.
The pricing problem
Yet the directive’s base prices have drawn immediate criticism. The 1800 MHz and 2100 MHz bands at $14 million per MHz are levels that industry experts consider high given Pakistan’s market realities, where average revenue per user sits at just $1.10-1.30, among the lowest globally. It is to be noted that for the last auction conducted in 2021, the base price for the 1800 MHz and 2100 MHz bands was $31 million and $29 million, respectively.
Telecom lawyer and regulatory expert Aslam Hayat offered a pointed assessment: “Reserve price is still high. Dollar denomination of spectrum fee instead of Pakistani rupees interest on payments is objectionable. The base price of 1800MHz and 2100MHz is exceptionally high, compared to other spectrum blocks.”
The GSMA has consistently advocated for conservative reserve pricing, recommending spectrum costs remain within 12-15% of operator revenue. Pakistan’s previous auctions demanded 25-30%, levels that left significant spectrum unsold in both 2014 and 2021. The industry body also urged rupee-denominated pricing to shield operators from currency volatility, a recommendation the new directive ignores.
Since 2020, the Pakistani rupee has depreciated approximately 80% against the dollar. An operator locked into a $100 million commitment in 2020 now faces Rs 27.8 billion rather than the original Rs 15.4 billion, capital diverted from network expansion into currency hedging.
However, the recent directive does lock-in the dollar price this time around. The USD/PKR conversion rate will be locked a day before the auction, which will remain applicable for payments in 5 years.”The spectrum fee shall be set in the license in equivalent Pak Rupees. For USD/PKR conversion, National Bank of Pakistan (NBP) TT selling rate prevailing on the date preceding the date of spectrum auction shall be locked/used,” the directive reads.
Structural gaps
Hayat’s critique extends beyond pricing to governance concerns. “The Policy only mentions the spectrum to be auctioned and base prices, whereas the rest has been delegated to PTA without any guidance,” he noted, adding that quality of service requirements and rollout obligations, critical determinants of investment requirements, remain unspecified pending PTA’s Information Memorandum.
On the directive’s reform provisions, he was equally skeptical: “Clause 3(n) acknowledges structural bottlenecks like power costs, infrastructure sharing, fiber backhaul, device affordability, and spectrum pipeline planning but no binding commitments, timelines, or enforceable policy actions are there to resolve these.”
His verdict was unsparing: “Sorry but I still see it a revenue-maximization exercise rather than a genuine enabler of next-generation services.”
What to expect
Pakistan’s auction history offers cautionary lessons. The 2014 auction left the entire 850 MHz allocation unsold while only half the 1800 MHz spectrum found buyers. The 2021 auction repeated the pattern with the 2100 MHz band going entirely unsold. In both cases, high reserve prices prioritized immediate government revenue over long-term infrastructure development.
Industry analysts suggest operators may bid selectively this time, prioritizing lower bands suited for 4G coverage expansion while avoiding premium-priced mid-band spectrum. The economic calculus favors a market-aligned approach: lower reserve prices might yield less auction revenue but would enable significantly greater network investment and economic impact over time.
The directive represents progress, acknowledging structural challenges, offering payment flexibility, and releasing substantial spectrum. But with USD pricing intact, base prices still high, and reform commitments lacking enforcement mechanisms, the fundamental question remains unanswered.
The Information Memorandum will reveal whether PTA can bridge the gap between policy rhetoric and market reality.
