Can Pakistan adopt 5G?

KARACHI: Despite growing broadband penetration, Pakistan faces a tough shift to 5G, according to the Pakistan Telecommunication Authority (PTA)’s 2024 annual report. While the use and penetration of wireless telecommunication services in Pakistan like mobile and broadband continues to expand, there are concerns about the financial challenges that come with the country’s transition to 5G wireless technology.

The global shift towards 5G has coincided with a decline in investment in the Pakistan telecom sector from a peak of around $1.6 billion in 2021-22 to $765 million in 2023-24. And though average revenue per user continues to rise in rupee terms, it has reportedly declined in dollar terms compared to other comparable countries.

According to Chairperson of the Wireless and Internet Service Providers Association of Pakistan (Wispap) Shahzad Arshad, this “reflects that the market is very price sensitive...data usage is increasing [but] operators face challenges in monetising it effectively. This impacts their ability to invest in large-scale projects like 5G, which requires significant capital”.

The heavy financial burden on telecom operators that the 5G transition entails is also acknowledged in the PTA report, which notes that the return on large up-front capital investments may take time and make telecom companies cautious.

CEO of Jazz Aamir Ibrahim, the country’s leader in mobile broadband subscribers, pointed to the lack of 5G-capable devices in Pakistan and the high price of these devices as an obstacle to widespread 5G adoption. Per Ibrahim, the devaluation of the Pakistani rupee has raised operational costs for telecom operators.

According to the PTA’s report, the number of mobile telecom subscribers in the country has risen from an estimated 168.6 million subscribers in 2020 to 193.4 million subscribers as of September 2024. Mobile broadband subscribers rose from less than 100 million in 2020 to 138.7 million subscribers as of September this year, representing an over 20 per cent increase in broadband penetration within the same period. As of now, 95.5 per cent of the cellular mobile sites in Pakistan operate on 4G or fourth-generation wireless technology, which accounts for just over 94 per cent of the country’s mobile broadband subscribers.

However, the world is quickly moving beyond 4G to the faster next generation of wireless network technology represented by 5G. As of today, 5G networks are live in over 70 countries and over 100 additional countries have either 5G spectrum allocations planned through 2025 or 5G-ready commercial infrastructure deployments underway.

As per the PTA report, 5G delivers radical improvements over its 4G predecessor across key metrics such as peak data rates (20 Gigabits (Gbps) per second against just 1 Gbps for 4G). In simple terms, it is thought that the rollout of 5G will make internet connections across the world a lot faster and more reliable.

The PTA report claims that this “ultra-fast, low-latency connectivity” will help “stimulate economic growth and social development, create job opportunities, bridge the digital divide, and position Pakistan as a key player in the global digital economy”.

The PTA report also cites the urban-rural digital divide as a potential challenge to the country’s 5G rollout. These concerns are shared by Arshad, who highlights the need for “substantial policy reforms and incentives” to avoid a delayed or limited/urban-centric 5G rollout. Similarly, the PTA report claims government incentives and public-private partnerships may be crucial to ease the financial strain that comes with 5G and promote the needed investments in the next generation of networks.