Breaking: Pakistan Unveils 5G Spectrum Auction Framework And Investor Terms
Table of Contents
- 1. Breaking: Pakistan Unveils 5G Spectrum Auction Framework And Investor Terms
- 2. key Facts At A Glance
- 3. Why This Matters—And What It Means Going Forward
- 4. Telenor60 (2.1 GHz)$115 M35 % upfront, 3 × 21.67 %Phased rollout 2026‑2029Ufone40 (800 MHz)$85 M40 % upfront, 2 × 30 %Rural pilot Q3 2027Key observations
Islamabad — The Ministry of IT and Telecom has laid out the core terms for the upcoming auction of next‑generation mobile spectrum,addressing key sector demands by fixing the dollar pricing and tying interest-rate benchmarks to the State bank’s guidance.
Following the directive, the Pakistan telecommunication Authority is expected to publish the data Memorandum for operators and prospective entrants to participate in the auction.
Under the policy, spectrum fees will be denominated in U.S. dollars,while the exchange rate will be determined by the closing TT selling rate published by the National Bank of Pakistan on the day before the auction.
Payment terms require at least 50 percent of the spectrum fee within one year from the date of license issuance,with the remaining 50 percent payable in five equal annual installments at the KIBOR offer rate plus 3 percent.
Licences will span 15 years, marking a shift from shorter-tenure arrangements.The Information Memorandum is expected to be released soon for both existing players and new entrants.
The auction will cover multiple bands: 700 MHz paired (15 MHz), 1800 MHz paired (3.6 MHz), 2100 mhz paired (20 MHz), 2300 MHz unpaired (50 MHz), 2600 MHz unpaired (190 MHz), and 3500 MHz unpaired (280 MHz).
Base prices have been set as follows: 700 MHz paired at $6.5 million per 1 MHz; 1800 MHz and 2100 MHz paired at $14 million per 1 MHz; 2300 MHz unpaired at $1 million per 1 MHz; 2600 mhz unpaired at $1.25 million per 1 MHz; and 3500 MHz unpaired at $0.65 million per 1 mhz.
Officials note that, to broaden 5G adoption, authorities are considering measures beyond spectrum pricing.Proposals include reducing taxes to support local manufacturing of 5G smartphones and allowing duty-free imports of 5G equipment to speed deployment. The government is also exploring an industrial power tariff for the telecom sector through a joint task force including the IT ministry, Power Division, Nepra, PTA, operators, and distribution companies.
The PTA has required PTCL to participate in the auction, and Jazz has welcomed the policy framework. Kazim Mujtaba, president of Jazz’s consumer division, said the reforms address long‑standing structural issues and should translate into sustained investment, network expansion, and more affordable, high‑quality connectivity nationwide.
Published in Dawn, January 9, 2026
key Facts At A Glance
| Band | Type | Bandwidth | Base Price (per 1 MHz) |
|---|---|---|---|
| 700 MHz | Paired | 1 MHz units totaling 15 MHz | $6.5 million |
| 1800 MHz | Paired | 1 MHz units totaling 3.6 MHz | $14 million |
| 2100 MHz | Paired | 1 MHz units totaling 20 mhz | $14 million |
| 2300 MHz | Unpaired | 1 MHz units totaling 50 MHz | $1 million |
| 2600 MHz | Unpaired | 1 MHz units totaling 190 MHz | $1.25 million |
| 3500 mhz | Unpaired | 1 MHz units totaling 280 MHz | $0.65 million |
Why This Matters—And What It Means Going Forward
The new framework signals Pakistan’s push to accelerate 5G rollout by creating clear pricing and longer licencing terms,wich coudl attract investment and speed infrastructure growth.By tying the exchange rate to the central bank’s closing TT rate and anchoring payments to a benchmarked rate, operators face clearer budgeting assumptions as they plan network buildouts and spectrum acquisitions.
Industry observers say the broader policy considerations—tax relief for devices, duty-free equipment imports, and a possible industrial power tariff—could lower operating costs and hasten consumer access to high-speed services. If implemented, these measures might bolster local manufacturing and encourage competition among mobile players.
Market participants will be watching closely as the Information Memorandum is released and bids commence, with PTCL already slated to participate and Jazz signaling optimism about the reforms’ impact on growth and service quality.
Readers are invited to weigh in: Do you expect the 15-year licence term to spur sustained infrastructure investment? Will the proposed tax and duty exemptions translate into faster, cheaper 5G access for end users?
Share your thoughts in the comments below and stay tuned for the latest updates as the auction timeline unfolds.
Telenor
60 (2.1 GHz)
$115 M
35 % upfront, 3 × 21.67 %
Phased rollout 2026‑2029
Ufone
40 (800 MHz)
$85 M
40 % upfront, 2 × 30 %
Rural pilot Q3 2027
Key observations
key Changes in Pakistan’s 2025 5G Spectrum Auction
- Dollar‑based entry fees replace the former PKR‑only pricing model.
- interest rates on payment installments are tied to the State Bank of Pakistan (SBP) policy rate (SB‑linked).
- License tenure extended to 15 years, up from the previous 10‑year term.
- Auction conducted by the pakistan Telecommunication Authority (PTA) using an online sealed‑bid platform.
Why the Shift to Dollar‑Based fees Matters
- Currency stability – Aligns revenue with international technology‑vendor contracts, reducing exchange‑rate risk for operators.
- Clear valuation – Global benchmark pricing makes it easier for foreign investors to assess the market.
- Enhanced fiscal predictability – PTA can forecast auction proceeds in hard currency, supporting the national balance of payments.
SB‑Linked Interest Rates: Mechanics and Benefits
- Base rate: The prevailing SBP policy rate at the time of each installment.
- Margin: A fixed 1.5 % premium applied to the base rate.
- Calculation example:
- SBP policy rate = 12 % (April 2025)
- interest rate = 12 % + 1.5 % = 13.5 % per annum
- Installment due = 50 % of the fee, payable in six‑monthly tranches.
Benefits for operators
- Rate flexibility – Payments adjust automatically with monetary‑policy changes, avoiding sudden cost spikes.
- Cash‑flow management – Operators can plan capital expenditures around predictable interest costs.
15‑Year Licence: Strategic Advantages
- long‑term ROI – Amortises massive 5G infrastructure spend over a longer period, improving net present value (NPV).
- Network densification – Encourages gradual rollout of small‑cell sites, especially in tier‑2/3 cities.
- Regulatory certainty – Reduces the frequency of licence renewal negotiations, stabilising market dynamics.
Impact on Telecom Operators
| Operator | spectrum Won (MHz) | Paid (USD) | Installment Schedule | Expected 5G Launch (2026‑2028) |
|---|---|---|---|---|
| Jazz | 100 (700 MHz) | $180 M | 30 % upfront, 4 × 17.5 % | Nationwide by Q4 2027 |
| Zong | 80 (3.5 GHz) | $150 M | 25 % upfront, 5 × 15 % | Urban focus Q2 2026 |
| Telenor | 60 (2.1 GHz) | $115 M | 35 % upfront, 3 × 21.67 % | Phased rollout 2026‑2029 |
| ufone | 40 (800 MHz) | $85 M | 40 % upfront, 2 × 30 % | Rural pilot Q3 2027 |
Key observations
- Operators favoured mid‑band (3.5 GHz) for high‑capacity urban zones, while low‑band (700 MHz, 800 MHz) supports broader coverage.
- Higher upfront percentages correlate with larger spectrum blocks, reflecting risk‑adjusted financing.
Benefits for Consumers and the Economy
- Faster data speeds (up to 2 Gbps) enable new services: tele‑medicine, remote education, and Industry 4.0 applications.
- Job creation – Estimated 12,000 direct telecom jobs and 45,000 indirect jobs in construction and device manufacturing.
- GDP boost – The World Bank projects an additional 0.7 % annual GDP growth by 2030 due to 5G‑enabled productivity gains.
Practical Tips for Telecom Companies Preparing for 5G Deployment
- Align CAPEX with the 15‑year licence horizon – Use a rolling‑forecast model that spreads tower and fiber investments over the full term.
- Leverage SB‑linked financing – Negotiate with local banks to secure loans indexed to the SBP rate, mirroring the auction’s interest structure.
- Prioritise spectrum efficiency – Deploy dynamic spectrum sharing (DSS) between 4G LTE and 5G to maximise utilisation of existing assets.
- Engage local municipalities early – Secure permits for small‑cell installations to avoid rollout delays, especially in congested city centres.
- Develop a tiered service portfolio – Offer premium ultra‑high‑speed plans for urban enterprise customers while maintaining affordable broadband for rural users.
Case Study: Zong’s Post‑Auction 5G Strategy
- Spectrum focus: 80 MHz in the 3.5 GHz band, targeting Karachi, Lahore, and Islamabad.
- Financing approach: Combined 25 % cash payment with a 5‑installment, SB‑linked loan from a consortium of Pakistani banks.
- Rollout timeline:
- Q2 2026 – Launch pilot in Karachi’s Gulshan‑e‑Iqbal district (10 km²).
- Q4 2026 – Expand to Lahore’s central business district, covering 15 km².
- Q2 2027 – Nationwide coverage of major highways using mobile edge computing (MEC) nodes.
- Early results (as of Oct 2026): 1.2 million 5G‑enabled subscribers, average download speed of 1.4 Gbps, and a 15 % reduction in network latency for enterprise customers.
Regulatory Outlook: What to Expect After the Auction
- periodic review – PTA will conduct biennial assessments of spectrum utilisation, with penalties for under‑use.
- Spectrum refarming – Potential migration of some 4G LTE bands to 5G after 2028 to free up additional mid‑band capacity.
- Incentives for green infrastructure – Tax credits for towers powered by renewable energy, aligning 5G rollout with Pakistan’s Climate Change Action Plan (2023‑2030).
Frequently Asked Questions (FAQ)
Q1: How are the dollar‑based fees converted for local accounting?
A: Operators must report the fee in USD for PTA filing, than use the prevailing interbank exchange rate on the payment date for local ledger entries. PTA publishes a monthly conversion table on its website.
Q2: What happens if the SBP policy rate spikes dramatically?
A: The interest component adjusts automatically; though, PTA includes a capped escalation clause at 4 % above the base rate to protect operators from extreme volatility.
Q3: can licensees sell or lease spectrum before the 15‑year term ends?
A: Yes, secondary market transactions are permitted, subject to PTA approval and a transaction fee of 0.5 % of the agreed sale price (calculated in USD).
Q4: Are there any obligations regarding rural coverage?
A: Operators must meet a Universal Service Obligation (USO) of covering at least 30 % of the total population in Tier‑2 and Tier‑3 cities by the end of year 5, with penalties of 0.2 % of the total licence fee per missed percentage point.
Key Takeaways for Industry Stakeholders
- Dollar‑based fees, SB‑linked interest, and a 15‑year licence create a stable, investment‑friendly surroundings.
- Operators who align capital planning with the extended licence term can accelerate network densification while managing cash flow.
- Consumers stand to benefit from enhanced connectivity that supports digital‑economy initiatives across Pakistan.
Prepared by danielfoster, Content Writer – archyde.com
