ZAFAR BHUTTA
January 11, 2026
ISLAMABAD:
Cabinet members have proposed that 50% of proceeds from the upcoming telecom spectrum auction be transferred to the Universal Service Fund (USF), the entity responsible for expanding digital infrastructure across the country.
The suggestion emerged during a recent cabinet meeting chaired by the prime minister. While reviewing preparations for the spectrum auction, members emphasized the need to channel a significant share of the revenue toward nationwide tower fiberisation.
A committee headed by the finance minister has been constituted to oversee the auction process. The panel will determine the final percentage of auction proceeds to be allocated to the USF for digital infrastructure development.
The cabinet observed that the proposed mark-up for deferred payments—Karachi Inter-Bank Offered Rate (Kibor) plus 3%—was too stringent and should be reduced to Kibor plus 1%. Some members further suggested easing the deferred payment structure by allowing licensees to pay any percentage after one year of licence issuance, with the remaining amount spread across 10 equal annual installments starting from the second year.
To ensure transparency, the cabinet directed that the entire spectrum auction process be broadcast live across all media platforms, similar to the recent privatisation of Pakistan International Airlines.
The Ministry of Information Technology and Telecommunication informed the cabinet that the auction of International Mobile Telecommunications (IMT) spectrum is aimed at increasing 4G speeds by five times and 5G speeds by 13 times.
The cabinet was briefed that Pakistan ranks lowest in South Asia for spectrum allocation, according to the GSMA Mobile Connectivity Index Report 2023. The limited spectrum availability has contributed to slow internet speeds across the country.
Under the current framework, successful bidders may opt for either full upfront payment or a deferred option, requiring a minimum 50% payment by the first anniversary of licence issuance, with the remaining amount payable in five equal annual installments beginning from the second anniversary.
The deferred amount would carry a cumulative mark-up of one-year Kibor plus 3% per annum. The spectrum licence fee would be specified in Pakistani rupees rather than US dollars.
The cabinet ratified the Economic Coordination Committee’s decision on the “IMT Spectrum Auction for Improvement of Next Generation Mobile Broadband Services in Pakistan.” It also constituted the “Cabinet Committee on IMT Spectrum Auction for Improvement of Next Generation Mobile Broadband Services” under Rule 17(2) of the Rules of Business, 1973, with the finance minister as convener and the economic affairs and IT ministers as members.
The committee will steer and monitor the auction process and may adjust payment terms, including upfront payments, deferred options, and installment structures. Decisions taken by the committee will not require further cabinet ratification. All bidding and auction proceedings carried out by the federal government or its entities will be broadcast live.
A proposal under discussion allows a public sector entity to acquire or lay optic fibre infrastructure and sell it onward to accelerate nationwide connectivity.
