Pakistan may face loss of up to $4.3bn if spectrum auction delayed, warns GSMA

ISLAMABAD: The GSMA on Monday informed the Auction Advisory Committee (AAC), chaired by the finance minister, that Pakistan could face a loss ranging from $1.8 billion to $4.3 billion in economic benefits due to delays in spectrum release over two and five years, respectively. 

It is reported that due to a two-year delay in the spectrum auction, the loss will be $1.8 billion. However, if the delay were to occur over five years, the loss to the national exchequer would balloon to $4.3 billion. Islamabad wants the spectrum auction within the first half of the current fiscal year by the end of December 2025. The telecom operators asked the government to resolve litigation for undertaking spectrum action and then come up with viable solutions on the fiscal front to make the upcoming spectrum auction successful.

They argued that the spectrum was provided to market players without any fees in many parts of the world, but linked with investment to rollout and quality of service for the maximum population. However, in the case of Pakistan, it might not happen but the reserve price needs to be fixed keeping in view the ground realities.

The government assured the participants that the lingering litigation would be resolved so that the spectrum could be released and sold out to the market players in a transparent manner through open bidding.

“The delay in spectrum release could lead to loss of $1.8 to $4.3 billion in economic benefits over the next 5-year period,” the GSMA briefed the ASC in a meeting held here on Monday. Julian Gorman, Head of Asia Pacific from GSMA, briefed the ASC meeting.

Total six recommendations were presented to the government including resolving outstanding legal, regulatory and fiscal issues, setting reserve price lower than previous auction, denominating spectrum fees in local Pak rupees to reduce risk from currency fluctuations, offering payment flexibility with installment options and affordable upfront fees, deducting cost of license obligations from spectrum fees to ease operations’ financial burden and committing to clear spectrum roadmap to reduce uncertainty and support network planning.

The cellular operators also shared their thoughts with the government, arguing that dollar rate should be frozen on the day of the spectrum auction and then remaining installments secured at the frozen exchange rate.

According to an official statement issued by the Ministry of Finance, a meeting of the Spectrum Advisory Committee was held on Monday at the Finance Division under the chairmanship of the Federal Minister for Finance and Revenue, Senator Muhammad Aurangzeb.

The meeting was attended by Federal Minister for Information Technology & Telecommunication Ms. Shaza Fatima Khawaja, Federal Minister for Law and Justice Senator Azam Nazeer Tarar, Julian Gorman, Head of Asia Pacific, GSMA, senior officials from relevant ministries and regulators, and representatives of leading mobile operators.

Participants from the telecom industry and GSMA shared perspectives on advancing Pakistan’s digital transformation through an effective spectrum policy. Discussions underscored the importance of spectrum in enabling the growth of IT and telecom services, supporting exports, jobs, and wider digital adoption.

Senator Muhammad Aurangzeb welcomed the insights of the industry and GSMA, appreciating the value of global best practices for Pakistan’s spectrum roadmap. The minister also emphasised timely progress on the spectrum process to capture emerging opportunities for Pakistan’s economy and society.

Federal Ministers Ms. Shaza Fatima Khawaja and Senator Azam Nazeer Tarar reaffirmed the government’s focus on enabling a digitally connected Pakistan with inclusive, affordable, and high-quality connectivity.