Pakistan’s ambition to enhance information technology exports to $25 billion in the next five years is under pressure as prolonged delays in spectrum auctions risk slowing digital growth. Industry stakeholders have warned that without timely allocation, the country will face not only missed economic opportunities but also compromised network expansion essential for its digital economy.
The government’s spectrum auction advisory committee was recently briefed on the consequences of further delays. Industry analysis shows that if the auction is postponed by two years, the economy could bear losses of around $1.8 billion, while a five-year delay could result in nearly $5 billion in costs. The delay is attributed to ongoing litigation and uncertainty surrounding the merger of Pakistan Telecommunication Company Limited (PTCL) and Telenor, coupled with concerns over high reserve prices. Stakeholders have stressed that IT exports rely heavily on reliable and affordable connectivity, which can only be achieved if spectrum is allocated promptly and on reasonable terms.
Pakistan’s digital goals, which include building a cashless society, expanding connectivity, and increasing exports, are closely tied to the quality of broadband services. Mobile operators have highlighted that without immediate spectrum allocation, improvements in 4G networks will stagnate and the introduction of 5G will be pushed back by at least two years. This would directly affect the government’s vision of promoting instant payment systems such as Raast, which require robust and high-speed broadband to function effectively. Industry experts have also underscored that in previous auctions, much of the spectrum remained unsold due to unaffordable reserve prices, a factor that discouraged both operators and investors.
To address these issues, recommendations have been put forward for a comprehensive review of current policies. Suggestions include resolving outstanding legal, regulatory, and fiscal challenges, setting reserve prices conservatively compared to earlier auctions, and denominating spectrum fees in local currency rather than in US dollars to mitigate risks linked to exchange rate volatility. Operators have further demanded flexible payment structures, including instalment options and affordable upfront fees, while also proposing that costs of license obligations be deducted from spectrum fees to reduce financial pressure on companies. Importantly, stakeholders have called for a clear spectrum roadmap to eliminate uncertainty and allow operators to plan network investments more effectively.
Industry voices warn that the cost of spectrum in Pakistan is nearly double the regional average, accounting for about 20% of telecom revenues. They point to the rupee’s instability in past years, which has increased the financial burden on operators, limiting their ability to invest in new infrastructure. Comparisons with international markets show that where spectrum auctions once attracted tens of billions of dollars, valuations have now reduced substantially, making it necessary for Pakistan to adjust its expectations in line with current realities. Without these adjustments, the industry argues, the country risks being unable to mobilise the investment required for next-generation networks.
The last spectrum allocation in Pakistan took place around four years ago, and since then delays have created uncertainty in the market. Industry players maintain that the state must decide how urgently it wants to achieve its digital ambitions. Addressing court cases and clarifying the position on pending mergers are seen as critical steps to unlocking the process. Without timely decisions, the country’s vision for a digitally enabled economy and its target of $25 billion in IT exports could remain unattainable.
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