WEB DESK: The federal government has formally announced the reserve prices and spectrum volumes for the upcoming auction of next-generation mobile services, clearing the way for the launch of 5G in Pakistan.
According to a policy directive issued by the Ministry of Information Technology and Telecommunication, and approved by the auction supervisory committee headed by Finance Minister Muhammad Aurangzeb, the Pakistan Telecommunication Authority will conduct the auction through an open and competitive process.
Under the notification, spectrum fees will be denominated in Pakistani rupees, with US dollar conversions calculated using the National Bank of Pakistan’s TT selling rate applicable on the day preceding the auction.
The auction will cover six frequency bands, comprising both paired and unpaired spectrum. Paired spectrum includes 15 MHz in the 700 MHz band, 36 MHz in the 1800 MHz band and 20 MHz in the 2100 MHz band. Unpaired spectrum will be offered in the 2300 MHz (50 MHz), 2600 MHz (190 MHz) and 3500 MHz (280 MHz) bands.
Reserve prices for paired spectrum have been set at $6.5 million per MHz for the 700 MHz band, while both the 1800 MHz and 2100 MHz bands carry a base price of $14 million per MHz each. For unpaired spectrum, the reserve price is $1 million per MHz in the 2300 MHz band, $1.25 million per MHz in the 2600 MHz band and $0.65 million per MHz in the 3500 MHz band.
The payment structure includes a one-year grace period after licence issuance, during which no payment or markup will be charged. After the moratorium, bidders may choose to pay the full spectrum fee upfront or opt for a deferred payment plan. Under the instalment option, 50 per cent of the fee will be payable on the first anniversary of the licence, with the remaining amount paid in five equal annual instalments starting from the second year. The deferred balance will carry markup at one-year KIBOR plus three per cent, based on rates published by the State Bank of Pakistan. Early repayment will be allowed without penalty.
New spectrum licences will be valid for 15 years and will include provisions for spectrum trading and sharing under the existing regulatory framework. Following the auction, all cellular mobile operators will be required to comply with a spectrum rationalisation plan aimed at optimising contiguous holdings in the 1800 MHz and 2100 MHz bands. The plan will be developed by the PTA in consultation with the Frequency Allocation Board.
The PTA is expected to issue an Information Memorandum soon, detailing auction procedures, eligibility criteria and timelines. Spectrum will be assigned on a technology-neutral basis, allowing its use for current and future mobile technologies. Both existing operators and new entrants will be eligible to participate, subject to spectrum caps, including a limit of 40 per cent of total available spectrum after the auction.
Additional band-specific caps will apply, including a maximum of 55 MHz for low-band spectrum holdings, along with separate limits for the 2600 MHz and 3500 MHz bands. Licence conditions will also include phased rollout obligations for next-generation mobile networks, covering network expansion, fibre connectivity and improved service quality standards.
