Government sets reserve prices and spectrum bands for 5G auction

WEB DESK: The federal government has formally announced the reserve prices and spectrum volumes for the upcoming auction of next-generation mobile services, paving the way for the launch of 5G in Pakistan.

The policy directive was issued by the Ministry of Information Technology and Telecommunication following approval from the auction supervisory committee, headed by Finance Minister Muhammad Aurangzeb. Under the directive, the Pakistan Telecommunication Authority (PTA) will oversee the auction through an open and competitive process.

According to the notification, spectrum fees will be recorded in Pakistani rupees, with conversions from US dollars calculated using the National Bank of Pakistan’s TT selling rate applicable on the day before the auction.

The auction will cover six frequency bands, including both paired and unpaired spectrum. A total of 15 MHz of paired spectrum will be offered in the 700 MHz band, 36 MHz in the 1800 MHz band, and 20 MHz in the 2100 MHz band. In addition, unpaired spectrum will be available across the 2300 MHz (50 MHz), 2600 MHz (190 MHz), and 3500 MHz (280 MHz) bands.

The government has set the reserve price for paired spectrum at $6.5 million per MHz in the 700 MHz band, while the 1800 MHz and 2100 MHz bands will carry a base price of $14 million per MHz each. For unpaired spectrum, reserve prices have been fixed at $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.

Payment terms include a one-year grace period following licence issuance, during which no payment or markup will be charged. After the moratorium, successful bidders may either clear the full spectrum fee at once or opt for a deferred payment option. Under the instalment plan, half of the fee must be paid by the first anniversary of the licence, while the remaining amount will be paid in five equal annual instalments, starting from the second year. The deferred balance will attract 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 issued for a period of 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 to optimise contiguous holdings in the 1800 MHz and 2100 MHz bands. This plan will be developed by the PTA in consultation with the Frequency Allocation Board.

The PTA will soon issue an Information Memorandum outlining auction procedures, eligibility requirements, and timelines. The spectrum will be assigned on a technology-neutral basis, allowing use across current and future mobile technologies. Both existing operators and new entrants may participate, subject to spectrum holding limits, including a cap of 40 per cent of total available spectrum after the auction.

Additional limits will apply to specific bands, including a maximum of 55 MHz for low-band spectrum holdings and separate caps 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 enhanced service quality standards. For existing operators, new rollout requirements will replace current obligations upon securing additional spectrum.

Web Desk