Non-auctioning of the 5G network will incur huge financial loss

Additional spectrum release/auction will help enhancement of 4G services and subscribers base which is necessary for the successful launch of 5G technology in the country.

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The Pakistan Telecommunication Authority (PTA) prepared a policy framework aimed at rolling out 5G and advanced technology for it will be available by April 2023. PTA Chairman Major General (retd) Amir Azeem Bajwa has said the government has kicked off the auction process of the 5G spectrum on the recommendation of the advisory committee formed by the government. The process was expected to conclude by the end of this year or early next year and services were to be rolled out subsequently.

According to Ministry of IT and Telecom sources, Pakistan is likely to incur a financial loss of $2-3 billion because of the non-auctioning of the 5G network till December of this year.

The Ministry imported the equipment, and frequency bands for the 5G network were also freed up. Last year, the Ministry of IT and Telecommunications also released a 5G strategic plan and policy guidelines. In January 2022, the former government appointed a high-powered committee to adopt the 5G Strategic Plan and oversee the process of releasing next-generation technology and auctioning off spectrum.

Read more: PTA bashes telecom operators over price issues

Additional spectrum release/auction will help enhancement of 4G services and subscribers base which is necessary for the successful launch of 5G technology in the country.

The high-level committee was proposed to provide recommendations for incentives to be included in the Finance Bill 2022, according to sources. Due to the country’s political situation, the previous government was unable to hold the committee meeting, and the current government has reconstituted the auction advisory committee.

However, the federal government has chosen to hold another auction for extra 3G/4G spectrum. Preparations for the 5G auction have been hampered by both political instability in the country and the previous government’s increase in telecom taxation.

Mini budget during former regime announced increase in taxes on the telecom sector. The advance income tax was raised from 10% to 15% in the supplementary finance bill without consulting the industry. The telecom industry had informed the government in its recommendations that the launch of 5G is not viable in the presence of such a heavy tax. Even the Ministry of IT and Telecom and PTA demanded the government to lower taxes on the telecom sector.

On August 1, neighboring country India staged a 5G auction, which raised Rs.1.3 trillion for the national exchequer. Nepal and Bangladesh are also preparing for 5G deployment and conducting trials. The 5G network currently has around 1.2 billion users worldwide, with that figure predicted to grow to 2.5 billion by the end of 2022.

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