Pakistan’s delays in assigning telecom spectrum could result in substantial economic losses, with a potential $1.8 billion (Rs500 billion) reduction in GDP between 2025 and 2030 if the delay stretches to two years. If the delay extends to five years, the loss could surge to $4.3 billion (Rs1.168 trillion), according to the Global System for Mobile Communications Association (GSMA).
The GSMA, a prominent industry group representing mobile network operators globally, has called on the government to prioritize the development of digital infrastructure rather than focusing solely on revenue generation during the upcoming 2025 spectrum auction.
Pakistan’s spectrum policy has come under scrutiny, as the country allocates one of the smallest amounts of mobile spectrum in the Asia-Pacific region. Despite the success of the Digital Pakistan initiative, which has increased mobile broadband coverage from just 15% in 2010 to 83% of the adult population today, the telecom sector faces critical challenges, including high inflation, currency depreciation, and escalating energy costs, all of which are impacting network investments.
Pakistan has allocated just 270 MHz of spectrum for mobile services, far below the Asia-Pacific average of more than 700 MHz. Previous spectrum auctions in 2014 and 2021 failed to sell all available bandwidth, primarily due to high reserve prices. This has impeded the expansion of 4G networks and hindered digital growth. GSMA estimates that had all available spectrum been assigned in previous auctions, Pakistan could have gained an additional $300 million (Rs80 billion) in economic benefits.
The upcoming 2025 spectrum auction is set to offer nearly 600 MHz of spectrum 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 adopt a fair pricing strategy to prevent the mistakes of previous auctions. Spectrum costs in Pakistan have risen sharply, with charges as a percentage of recurring revenue growing from 11% in 2014 to 20% in 2022. This increase is mainly due to spectrum fees being denominated in US dollars, making telecom operators more vulnerable to exchange rate fluctuations.
GSMA also pointed out that operator revenue per MHz is declining, while bandwidth demand continues to grow, making the current pricing model unsustainable. The organization warned that excessively high pricing could stifle future investments in mobile networks, slowing Pakistan’s digital transformation even further.
To foster sustainable growth, GSMA recommended setting reserve prices more conservatively in the upcoming auction—lower than in previous rounds—to avoid unsold spectrum and let the market establish fair pricing. The organization also suggested denominating spectrum fees in Pakistani rupees to protect operators from currency volatility. Furthermore, GSMA proposed introducing payment flexibility, such as installment options over the duration of the license, and ensuring that licensing obligations do not unduly inflate costs for telecom operators.
As the 2025 spectrum auction presents a pivotal moment for Pakistan’s telecom sector, GSMA emphasized the importance of a market-driven approach. If spectrum prices remain excessively high, Pakistan’s 5G rollout could be delayed, putting the country at a disadvantage in the global digital economy.
