The GSMA has issued a paper criticising Pakistan over spectrum policy highlighted that the country has among the lowest spectrum in Asia Pacific region and rising cost of spectrum is unsustainable and poses a major threat to the future development of mobile services.
The paper by the GSMA has highlighted that mobile network infrastructure was crucial for Pakistan’s digital transformation, serving as the backbone for wide-reaching connectivity and socioeconomic growth, whereas countries including Philippines, Vietnam, Thailand, Bangladesh and Indonesia have more spectrum compared to Pakistan.
GSMA is a global organisation representing mobile operators and organisations across the mobile ecosystem and adjacent industries, unifying mobile ecosystem.
The GSMA has said that while ‘Digital Pakistan’ is government’s flagship initiative launched in 2018, to enhance digital infrastructure and enable the rapid delivery of innovative digital services but Pakistan face several challenges that threaten the sustainability and growth of its mobile infrastructure.
The analysis by GSMA Intelligence shows that if spectrum had been fully assigned in previous auctions, additional benefits of some $300 million or Rs80 bn would have been realised in the national economy.
The GSMA paper has referred to the past auctions in Pakistan that have resulted in unsold spectrum, like in 2014 and in 2021 leading to reduced spectrum supply for mobile operators.
“This has contributed to slower 4G rollout and adoption,” the GSMA paper has added.
Pakistan’s upcoming spectrum auction should focus on enhancing the country’s digital infrastructure rather than maximising government revenue.
It added that the 600 MHz set to be made available in the upcoming auction, including over 500 MHz in the core mid-bands such as 2.3 GHz, 2.6 GHz and 3.5 GHz, which will be essential to addressing the country’s current shortfall.
It said that excessive spectrum pricing has serious consequences for industry and consumers, and referred to the study by GSMA Intelligence and others that there was a causal link between high spectrum prices and slower mobile data speeds, worse coverage and slower rollout.
Unsold spectrum in previous auctions has already led to lost economic growth for Pakistan.
“For the upcoming auction, the impact of unsold spectrum because of excessive reserve prices will be even more substantial,” the GSMA has warned.
It added that the two year delay to the availability of new spectrum is projected to result in a loss of $1.8 bn or around Rs500 bn in GDP over the 2025-2030 period compared to a baseline scenario in which all bands are sold.
While over the last decade, Pakistan has seen significant progress, with mobile broadband networks expanding rapidly and its 83 percent of the adult population resides in areas covered by 3G or 4G networks, compared to 15 percent in 2010.
At the same time Pakistan has among the lowest amount of assigned spectrum for mobile in the Asia Pacific region at around 270 MHz, compared to the Asia Pacific region average of more than 700 MHz in low and mid-bands.
And several reasons for this increase includes depreciation of the Pakistani Rupee against the dollar, that is unlike in most countries globally where spectrum fees are paid in local currency, the spectrum charges are in US dollars, putting operators at risk of fluctuations in financial markets.
The other reason is that the operator revenue per megahertz (MHz) of spectrum was falling while the bandwidth needed to meet user demand is rising.
“With the total supply of mobile spectrum set to increase potentially by threefold, the trend of rising spectrum costs is simply not sustainable, for operators to be able to fund sufficient investment in future spectrum and networks change is needed,” the GSMA paper added.
The GSMA has said that while auctions were a common mechanism for assigning spectrum, particularly where this is excess demand, however good auction design was crucial to have a balanced approach.
The GSMA has recommend that actions are needed to set reserve prices for all bands conservatively, and lower than in previous auctions, to allow the market to determine a fair price and to reduce the risk of leaving spectrum unassigned.
The government has to commit to a spectrum roadmap to reduce uncertainty about future spectrum availability and aid network planning. Ends
GSMA warns Pakistan over current spectrum auction.
