ISLAMABAD: The Ministry of IT and Telecom has acknowledged key demands of the telecom sector in its policy directive for the auction of next-generation mobile spectrum by fixing the dollar rate and determining interest rates based on benchmarks issued by the State Bank.
Following the issuance of the policy directive, the Pakistan Telecommunication Authority (PTA) is expected to release the information memorandum (IM) for telecom operators and new entrants to participate in the upcoming spectrum auction.
Under the policy framework, spectrum fees have been fixed in dollars, while the exchange rate will be determined at the closing National Bank of Pakistan’s TT selling rate prevailing on the day preceding the auction date.
A minimum of 50 per cent of the spectrum fee will be payable within one year from the date of licence issuance. The remaining 50pc will be payable in five equal annual instalments at KIBOR offer rate plus 3pc.
Previously, interest rates were based on the London Interbank Offered Rate under the 2021 policy directive issued by the IT ministry. Under the new framework, licences will be issued for a period of 15 years. The PTA is expected to issue the IM shortly for telecom operators and any potential new entrants.
The auction will be conducted by the PTA for 15 MHz paired spectrum in the 700 MHz band, 3.6 MHz paired spectrum in the 1800 MHz band, 20 MHz paired spectrum in the 2100 MHz band, 50 MHz unpaired spectrum in the 2300 MHz band, 190 MHz unpaired spectrum in the 2600 MHz band, and 280 MHz unpaired spectrum in the 3500 MHz band.
The base prices for the various spectrum bands have been set at $6.5 million for 1 MHz paired spectrum in the 700 MHz band, $14m for 1 MHz paired spectrum in both the 1800 MHz and 2100 MHz bands, $1m for 1 MHz unpaired spectrum in the 2300 MHz band, $1.25m for 1 MHz unpaired spectrum in the 2600 MHz band, and $0.65m for 1 MHz unpaired spectrum in the 3500 MHz band.
At the same time, the IT ministry has taken note of broader concerns of the telecom industry and has asked the federal government to take measures in consultation with relevant stakeholders.
It has suggested that to enhance the market penetration of 5G-compatible smartphones, taxes should be reduced to promote local manufacturing. Another proposal is to allow duty-free import of 5G equipment to accelerate adoption.
The IT ministry has also asked the government to implement an industrial power tariff for the telecom sector through a joint task force comprising the ministry, Power Division, Nepra, PTA, telecom operators and power distribution companies.
The PTA has obligated PTCL to participate in the upcoming spectrum auction, while Jazz has welcomed the policy directive.
Kazim Mujtaba, president of Jazz’s consumer division, said that long-standing structural challenges faced by the telecom sector have been addressed, adding that these will translate into tangible progress, enabling sustained investment, network expansion and the delivery of affordable, high-quality connectivity nationwide.
