ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Tuesday cleared the long-delayed 5G spectrum auction, approving key recommendations of the Auction Advisory Committee (AAC), including dollar-linked pricing fixed on auction day, a 50 percent upfront payment with the remainder payable over five years and regional benchmarks to determine prices for new spectrum bands. Well-placed sources revealed this after the ECC meeting, which was held here with Finance Minister Muhammad Aurangzeb in the chair. The government is planning to offer 600 MHz of spectrum for auction, expected in February 2026; however, no recommendation has been approved regarding tax relief or a 10-year interest-free installment plan for spectrum payments. High spectrum pricing: Govt finds itself in a catch-22 situation Sources revealed that prices for new bands, including 2600 MHz, 700 MHz, 3500 MHz, and 2100 MHz, would be set, while keeping in view the benchmark prevailing in the region. National Economic Research Associates Inc (NERA), a US-based international consultancy firm hired by Pakistan for the 5G spectrum auction, had presented its report to AAC, which had also recommended lower prices and a longer payment period. The consultant warned that high spectrum prices could reduce the number of players in the market and weaken competition, potentially leading to lower innovation, higher prices, and other adverse outcomes for consumers. The consultant has also recommended extended payment terms, saying that given the substantial investment required in networks and systems, there is a need for extended payment terms (like Vietnam, Indonesia, Bangladesh, etc.) Additional incentives may be required regarding the 3.5 GHz band (which is 5G only), even with growth in 5G FWA opportunities. PTA had also supported lower prices for the spectrum auction, with the objective to attract investment in the sector and give more focus on the rollout obligation to improve telecom services in the country. Addressing a joint televised press conference after the ECC meeting, Finance Minister Muhammad Aurangzeb said the approval reflects the government’s commitment to fast-tracking digital transformation and attracting investment in the telecom sector. He noted that the recommendations aim to ensure a transparent, competitive and investor-friendly auction framework while safeguarding consumer interests and fiscal considerations. Federal Minister for Information Technology and Telecommunication, Shaza Fatima Khawaja, said that the ECC has approved the Spectrum Advisory Committee’s recommendations for the auction, which would soon be submitted to the cabinet for approval. The approval would pave the way for the Pakistan Telecommunication Authority (PTA) to move forward with the next steps, including finalizing auction rules and timelines. She added that the 5G rollout is critical for boosting productivity, innovation, and new digital services across key sectors, such as industry, health, education, and agriculture. All processes would be finalized within the next four to six months. The auction would not only strengthen 3G and 4G networks in the country but would also help facilitate the rollout of 5G in the next five months, she added. The minister said that Pakistan currently has access to only 274 MHz of telecom spectrum, compared to Bangladesh with 600 MHz of spectrum. The auction would help improve broadband quality and meet the rising demand for internet services, she said. She said that internet speeds were not at par with international standards due to the unavailability of adequate spectrum. Internet services were experiencing slow speeds because of congestion, she added. She emphasized the importance of consultations with stakeholders, including telecom companies, to ensure the smooth implementation of the 5G rollout. The government is committed to further enhancing the Digital Pakistan programme under the vision of Prime Minister Shehbaz Sharif, she added. She stated that under the Connect 2030 plan, to be inaugurated soon by Prime Minister Shehbaz Sharif, minimum internet connectivity of 100 Mbps would be available to users over the next five years. The AAC had reviewed spectrum valuation, auction design, payment terms, and rollout obligations, and proposed measures to balance affordability for operators with sustainable revenue for the government. The ministers said further details, including the proposed auction date and available spectrum bands, would be shared by the IT ministry and PTA in due course. Copyright Business Recorder, 2025