Telcos Demand Reforms Ahead of 5G Spectrum Auction

Telecom operators have submitted a set of unified policy proposals and key demands to the government ahead of the planned 5G spectrum auction, calling for structural reforms to ensure affordability, investment viability, and faster infrastructure rollout. The operators warned that existing pricing and tax structures could hinder the sustainable deployment of 5G services across the country if left unchanged. According to the proposals, telecom companies have asked that spectrum prices be set in Pakistani rupees instead of US dollars to reduce exposure to currency volatility. They also proposed linking spectrum payments to a stable exchange rate mechanism and offering a 10-year, interest-free installment plan to ease the financial burden of long-term investments. The operators further recommended introducing a minimum price threshold to improve market sustainability. They set a target to increase Average Revenue Per User (ARPU) to USD 2 within three years, stating that realistic pricing benchmarks are necessary for operators to invest in next-generation networks while keeping services affordable. Addressing taxation issues, telecom companies sought exemptions on 5G equipment, mobile phones, and related infrastructure to accelerate network deployment. They also called for reducing the withholding tax from 15 percent to 8 percent and harmonizing the General Sales Tax (GST) at 16 percent to improve affordability and increase usage. In addition, they urged the government to offer industrial electricity tariffs to lower operational costs in the telecom sector. To support infrastructure expansion, the operators proposed suspending Universal Service Fund (USF) and Research and Development (R&D) contributions for two years, followed by a reduction in the contribution rate from 2 percent to 1 percent. They also called for improvements to the Right of Way (RoW) policy by simplifying, standardizing, and making procedures uniform across the country. The operators further demanded the immediate finalization of the spectrum sharing framework, handset financing framework, and Mobile Virtual Network Operator (MVNO) framework, stating that these measures are critical for faster and more inclusive 5G deployment.