Pakistan aims to conduct a 5G spectrum auction by early 2025.
The GSMA, a global organization representing the interests of mobile network operators, has urged the Pakistani government to eliminate the sales tax on affordable mobile phones.
In its report titled “Realising Pakistan’s Aspiration to Become a Digital Nation,” the GSMA noted that taxes on service providers, consumer devices, and services in Pakistan are among the highest globally. These high taxes, which include a 15% Advance Income Tax (AIT) on essential telecom services and a 19.5% sales tax on mobile services, create significant barriers to digital inclusion for low-income households.
To enhance digital inclusion and accessibility, the GSMA recommends removing the sales tax on affordable mobile phones. Additionally, reducing the advance tax on telecom services could promote wider usage.
The report also emphasized the need for a reasonable approach to pricing in the upcoming 5G spectrum auction, as high spectrum costs could hinder network investment and affordability for consumers. The GSMA advised the government to consider allowing spectrum payments to be denominated in local currency to provide greater certainty for operators.
The service restrictions order (SRO) imposed in Pakistan has a detrimental effect on both citizens and businesses, violating individual rights outlined in international human rights conventions, including freedoms of expression, access to information, and privacy—rights essential to democratic processes and elections.
Furthermore, the GSMA encouraged the government to support initiatives like the “Always-on Network Service” (AONS), which ensures access to business-critical mobile applications even during network shutdowns.
Pakistan plans to conduct a 5G spectrum auction by early 2025. Currently, mobile operators hold around 270 MHz of licensed spectrum, and adding new bands such as 700 MHz, 2.3 GHz, 2.6 GHz, and 3.5 GHz is necessary to expand network capacity and facilitate 5G deployment.
However, with already high spectrum costs and a declining average revenue per user (ARPU), a rational and sustainable pricing strategy for the upcoming auction is crucial.
A balanced approach to spectrum pricing will ensure that the total cost remains manageable for operators, providing the right incentives for investment in network rollout. This is essential for delivering affordable connectivity, reducing the broadband usage gap, and bridging the digital divide in Pakistan.
To support widespread and affordable 5G deployment, Pakistan must adopt a thoughtful and equitable spectrum pricing strategy that benefits both operators and consumers.
