Decision on 5G auction yet to be finalised

ISLAMABAD: The Auction Advisory Committee (AAC), led by the Minister for Finance, has been unable to finalise its decision on the proposed structure for the sale of 5G technology, primarily due to pending litigation before the superior court. 

In the meanwhile, the consultant for the 5G Spectrum has proposed that the government fix the base price for the next auction at a level that attracts existing telecom operators to invest in the new technology.

“If the base price is pitched on the higher side, it will become difficult to attract the interest of telecom players in the upcoming transaction,” a top official told The News on Saturday. He added that the AAC met on Friday under the Chairmanship of Minister for Finance Muhammad Aurangzeb, but it failed to finalise the proposed structure for the sale of 5G technology.

Prime Minister Shehbaz Sharif has set a deadline to sell the 5G spectrum on the 2600 MHz (megahertz) band by mid-February 2026. The Ministry of Information Technology appears confident of meeting the deadline, but the ongoing litigation in the Sindh High Court has prevented the government from making any decision on the issue. “We are waiting for the verdict of the court before deciding on the auction of 5G technology on 2600 MHz,” said the official. This 2600 MHz frequency is essential for the launch of 5G technology, so resolving the litigation related to it will pave the way for the auction.

The Pakistan Telecommunication Authority (PTA) hired a US-based consultant to propose the structure of the transaction. The consultant has recommended setting a reasonable base price to lure telecom players to participate in the bidding process, subsequently upgrade their networks, and acquire 5G-enabled cellular phones. The existing taxation on the latest cellular mobile phones is phenomenal, so there is a need to reduce the tax rates.

The consultant outlined recommendations for the auction, including its design, methodology, base price, duration and other related terms and conditions. Different bands can be offered, including 700MHz, 1800MHz, 2100MHz, 2300MHz, 2600MHz, and 3500MHz. The best usage of 5G services is in the 2600MHz band, and 190MHz is likely to be offered in this band.

After finalising the structure of the upcoming auction, the government will need to seek approval from Economic Coordination Committee (ECC) of the Cabinet and then the federal cabinet to proceed with the sale of this spectrum in the ongoing fiscal year. The Ministry of Finance has estimated it will receive Rs22.04 billion from the instalment of the 4G licence fee in the current fiscal year. The government has also estimated collection of Rs12 billion through the mobile handset levy in the current fiscal year.