Telecom Operators Urge Spectrum Sharing Over Costly Auction

Pakistan’s telecom operators have pressed the government to adopt a spectrum sharing model instead of high-priced auctions, warning that delays and rigid pricing risk undermining digital growth.

The telecom industry has urged the government to rethink its approach to the upcoming spectrum auction, warning that high reserve prices, dollar-linked payments, and legal disputes risk stalling progress in digital connectivity. At a meeting of the Spectrum Auction Committee chaired by Finance Minister Senator Muhammad Aurangzeb in Islamabad on Monday, operators called for a shift from the auction model to spectrum sharing, while also proposing alternatives to ease financial pressures on the sector.Govt approves Rolling Spectrum Strategy

The delegation, led by Telecom Operators Association (TOA) chairman and Jazz CEO Aamir Ibrahim, presented three options for consideration. The first proposal calls for spectrum auction fees to be denominated in Pakistani rupees rather than US dollars to shield operators from currency volatility. The second is for the government to adopt a spectrum sharing model, similar to practices in other countries, where capacity is pooled and costs are distributed more equitably. The third, more radical, option is to follow Saudi Arabia’s model of allocating spectrum free of cost to accelerate digital penetration.

The proposals come amid growing frustration within the industry over unresolved disputes that have delayed the auction. A key stumbling block is the pending merger of PTCL and Telenor Pakistan, which has left portions of spectrum tied up in litigation. Government representatives acknowledged that legal hurdles were being addressed to clear spectrum currently stuck in court cases.

Global stakeholders have also raised concerns. Julian Gorman, Head of Asia-Pacific at GSMA, the global mobile industry body, told journalists that Pakistan’s spectrum policy was hampered by high reserve prices and regulatory hurdles. He noted that such policies were restricting investment in mobile infrastructure and undermining progress toward affordable connectivity.

The government, represented by Federal Ministers Shaza Fatima Khawaja and Senator Azam Nazeer Tarar, reaffirmed its commitment to building a digitally connected Pakistan. Both emphasized that the state aimed to provide inclusive, affordable, and high-quality connectivity but recognized that some issues needed to be resolved before the spectrum auction could proceed.

Despite these assurances, officials noted that telecom operators had yet to present a credible alternative plan for ensuring spectrum availability. While the industry has verbally proposed adopting models from countries like Saudi Arabia, Vietnam, and Indonesia — where spectrum was priced at around 10 percent of previous auction values — no detailed plan was tabled.

Industry representatives highlighted international precedents, pointing to India’s handling of spectrum disputes, where government interventions helped resolve litigation bottlenecks. They argued that similar actions in Pakistan would help speed up spectrum allocation and attract investment into the sector.

A GSMA report presented at the meeting, Building Digital Pakistan through Effective Spectrum Policy, underscored the urgency of reform. It warned that Pakistan risked losing $4.3 billion in potential economic benefits over the next five years if spectrum allocation continues to be delayed. The report noted that spectrum costs in Pakistan already account for about 20 percent of operators’ revenues — among the highest globally — leaving little room for network investment.

The financial burden on the industry is compounded by one of the world’s heaviest telecom tax regimes. Aamir Ibrahim, CEO of Jazz, said that “when spectrum is priced beyond the reach of operators and compounded by one of the heaviest tax regimes in the world, the entire digital ecosystem suffers.” He added that operators are forced to limit investment, customers face poor service quality, and the government ultimately loses out on the long-term dividends of a robust digital economy.

The spectrum debate has become emblematic of the policy tug-of-war between short-term fiscal gains and long-term digital development. Successive governments have relied on spectrum auctions as a major revenue source, with dollar-linked fees providing a hedge against inflation. However, this approach has also raised barriers for telecom operators struggling with currency depreciation, rising energy costs, and declining profitability.

Comparisons with regional peers highlight Pakistan’s challenges. In Saudi Arabia, spectrum was allocated without cost as part of a strategy to rapidly expand digital services. In Vietnam and Indonesia, spectrum was auctioned at significantly reduced rates to encourage investment in network expansion. In contrast, Pakistan’s auctions have consistently been priced at levels operators deem unaffordable.

Industry analysts caution that further delays in spectrum allocation could hamper the rollout of 5G services, limit coverage expansion in underserved rural areas, and erode competitiveness in the digital economy. With mobile broadband already the primary driver of internet access in Pakistan, spectrum availability is critical to maintaining quality of service and meeting surging demand.

The government now faces the task of balancing fiscal needs against the industry’s call for reform. While spectrum auctions have historically generated significant revenue for the exchequer, experts warn that excessive upfront costs risk stifling the very investments needed to sustain long-term economic growth.

For now, the spectrum auction remains pending, with no timeline confirmed. The industry’s insistence on spectrum sharing and rupee-based pricing reflects growing unease with the status quo. Whether the government will adopt a more flexible approach remains uncertain, but stakeholders agree that urgent decisions are needed to prevent Pakistan from falling further behind its regional peers in digital infrastructure.

As the GSMA report cautioned, “Not enough spectrum means mobile is less productive and less affordable.” Without a shift toward rational, investment-friendly spectrum policies, Pakistan risks losing out on billions in potential economic benefits and slowing its path toward a fully digital economy.