Pakistan’s Spectrum Auction: A Defining Moment for Digital Transformation

Pakistan’s telecommunications sector stands at a critical crossroads. With nearly 600 MHz of spectrum scheduled for release across multiple frequency bands, the upcoming auction is being framed not merely as a licensing exercise but as a test of the country’s digital readiness. The outcome will determine whether Pakistan accelerates toward regional digital competitiveness or continues to lag behind its peers.

As highlighted in a recent article in Profit by Ahtasam Ahmad, the country remains heavily spectrum-starved, operating on just 274 MHz of commercially deployed spectrum. To put this in perspective, Bangladesh, with roughly two-thirds of Pakistan’s population, has more than 600 MHz of spectrum.

The consequences are visible: average mobile broadband speeds hover between 15–20 Mbps, while regional leaders deliver 40–60 Mbps. Monthly data consumption in the country has surged from 3 GB per user in 2019 to 8.8 GB in 2025, yet network capacity has not kept pace, frustrating users and limiting the growth of e-commerce, cloud adoption, and digital services.

Policy design has also been a critical factor. Historically, spectrum auctions were treated primarily as revenue sources to earn foreign exchange, with reserve prices set at levels that discouraged full participation. The 2014 and 2021 auctions are notable examples where spectrum went unsold or under-subscribed. In contrast, India’s approach — which combined reasonable reserve prices with long-term payment tenors — enabled rapid 5G deployment across 200+ cities, illustrating that operator interest exists when the auction framework aligns with commercial realities.

Moreover, financial pressures compound these challenges. The fierce competition in the sector has pushed data costs to $0.12 per GB, and average revenue per user remains below $1.30. High taxation, including a 34.5% ICT levy, plus regulatory fees and import duties, leaves operators with limited capital to invest in critical infrastructure. Past auctions, requiring 25–30% of operator revenue upfront, have historically constrained network expansion, delaying benefits from spectrum ownership.

In the article, Ahmad also emphasized that regional cautionary tales are instructive. In Bangladesh, the government raised $1.2 billion across multiple bands during the 2022 spectrum auction, but nearly three years later no commercial 5G services have been launched, primarily due to fiber limitations, device availability, and the focus on expanding 4G coverage. The lesson is clear: spectrum sales without corresponding infrastructure and market-aligned pricing risk turning billions of investments into stranded assets.

The immediate priorities for Pakistan are pragmatic. Spectrum bands below 2,000 MHz are better suited for expanding 4G coverage, while higher bands above 2,600 MHz can support 5G capacity once device penetration and backhaul infrastructure improve. Ahmad argued that market-aligned pricing, targeting 12–15% of operator revenue, extended payment tenors, and rupee-denominated obligations could free significant capital for network deployment. Complementary measures such as tax holidays on 5G capital expenditure and duty exemptions on network equipment, and industrial electricity tariffs for telecom infrastructure could unlock $700 million to $1.5 billion for deployment.

A strategic approach may yield slightly lower auction proceeds than extractive models, but it enables $3.5–4.5 billion in network investment and a potential $10–15 billion in economic impact over five years. This is a clear case where prioritizing long-term digital growth over short-term revenue extraction is both economically and socially sound.

The upcoming auction is more than a licensing exercise; it is an opportunity to reset Pakistan’s digital trajectory. With legal hurdles largely cleared and a three-player market structure now in place post-Ufone-Telenor merger, the country can leverage this spectrum to improve 4G coverage, lay the foundation for 5G, and advance the Digital Pakistan vision.

The choices made in the coming months — from pricing to payment structures — will define the sector’s growth trajectory. Pakistan must treat spectrum as national infrastructure to be cultivated and not merely as a source of revenue if it intends to drive meaningful digital transformation.