• Consultants urge local currency auction for next-generation telecomservices
• Internet restrictions, underuse of existing spectrum flagged as keybarriers

ISLAMABAD: Foreign consultants engaged by the Pakistan Telecommunication Authority (PTA) have highlighted critical policy, business and administrative challenges that could impede the rollout of 5G spectrum technology, targeted for April 2025.

The National Economic Research Associates (NERA), a US-sponsored consultancy firm, shared its initial findings with the government on Friday after a week of consultations with stakeholders.

The consultants briefed the advisory committee on releasing the International Mobile Telecommunication (IMT) spectrum for next-generation mobile broadband services.

The committee is chaired by Finance Minister Muhammad Aurangzeb.

The meeting was attended by Minister for Industries and Production Rana Tanveer Hussain, Minister of State for Information Technology Shaza Fatima Khawaja, PTA chairman, secretaries of the IT and law ministries, and other senior officials, an official statement said.

Administrative restrictions on internet services, insufficient use of existing spectrum, and auction of next-generation spectrum against foreign exchange instead of local currency were reported to be key factors highlighted by the existing players in the market.

The consultants will submit their final report in due course. The government has set April 2025 as the target date for the 5G spectrum auction.

The consultants shared different price-determining factors for the 5G auction.

They reported that most countries have moved to local currency-based auctions, and a few others, including Pakistan, were still looking for foreign exchange inflows, which could limit the competition and thus affect the bid price as well as subsequent investment for technology rollout.

They also noted that some of the existing operators were not very upbeat about the coming auction because of capacity limitations due to economic conditions and administrative restrictions.

The finance minister, however, “highlighted the importance of digital economy and digital integration as a critical component of the economic transformation of the country”, the statement said.

He added that “the government was determined to enhance connectivity and improve digital infrastructure to ensure mass adoption of emerging digital technologies and innovative applications for cross-sector socio-economic development, transformation of economic activities and achievement of sustainable development goals”.

The statement said the meeting discussed various issues regarding the 5G auction and reviewed the progress of work done by the US-based consultant firm NERA hired by the PTA through a bidding process earlier this month to study and assess the Pakistan market, undertake consultation with stakeholders and prepare policy recommendations regarding sector reforms and a roadmap for a successful spectrum auction by April next year.

Various government and telecommunication sector stakeholders have been debating the trade-off between rolling out next-generation telecom service at rates conducive to growth and expansion in broadband facilities and higher foreign exchange earnings.

The consultants also indicated that they would come up with a model that balanced both objectives but suggested that this would require the government to minimise traffic and content restrictions.

Some of the cellular operators have been complaining about the anti-expansion and growth environment for the IT sector in the country, because of which the country had not been able to sufficiently leverage even the 4G spectrum launched three years ago.

Published in Dawn, November 30th, 2024