5G Spectrum Allocation in Pakistan– Out of Box Strategies
The fifth generation (5G) of wireless communication is an important leap forward in the world of technology. Many developed nations around the world have already started deployment and are offering 5G Services. However, many of these countries are yet to make it accessible in every corner of their territory. Undoubtedly, China is leading the race in 5G which has caused serious concerns for the west. Political Leaders in some western countries are taking steps to contain China’s ambition towards 5G. It’s a long debate and we do not want to the political side. While we heard from Political and Regulatory leadership making tall claims some years back that 5G will be introduced in 2023, one needs to ponder over the thought of how long and what steps are required in order to launch 5G in developing nations like Pakistan. And how it can benefit the economy, technological landscape, and overall condition of the country?
- Economic Crisis and its effect on Telecom Sector
Well, as a follower of the Telecom Industry, and if we see it with a conventional eye, it seems a very distant dream to bring 5G to Pakistan. As is evident, the country is going through an economic crisis never seen before. The economy is not in a very healthy shape and the balance of payment problem is exacerbating each day. The Loan-to-GDP ratio has reached an unprecedented level with inflation skyrocketing. The State Bank of Pakistan has meager foreign reserves due to which the Central Bank had to take stringent measures including import ban, increasing tax, etc. The rise in taxes and the depreciating rupee have taken a toll on the telecom sector. Telcos are grumbling about massive losses incurred upon them as they have to pay upfront the Spectrum Allocation Fee in US dollars while they earn in Pakistani rupee. Under these circumstances, the telco feels that it does not make it viable or even impossible to launch 5G in Pakistan.
However, there are some alternative unconventional ways through which 5G Spectrum can be allocated and 5G services can be launched in Pakistan. But before we discuss these alternative and unconventional ways (relating to Pakistan) on how Spectrum should make available for 5G, let’s take a deeper look at the 5G Technology, Applications, and other intricacies related to it.
What is 5G Technology and its applications?
5G is a next-generation cellular network that provides much faster download and upload speeds, lower latency, and more capacity compared to earlier wireless technologies. 5G technology utilizes greater radio frequencies and better antenna technologies, allowing for the transmission of more data at a quicker rate. However, it’s not just limited to the internet speeds as 5G is much more than that. It enables new applications and use cases, including augmented and virtual reality, driverless cars, and the Internet of Things.
5G technology has the potential to change several sectors by providing faster data transfer rates, reduced latency, and more reliable connectivity. There are several applications of 5G in different industries. These include,
Healthcare: 5G can enable remote surgeries, remote patient monitoring, and telemedicine applications.
Manufacturing: 5G can provide real-time monitoring of machines and equipment, enabling predictive maintenance and optimizing production processes.
Transportation: 5G can enable autonomous vehicles and real-time traffic management, improving safety and efficiency.
Education: 5G can enable immersive and interactive learning experiences through augmented reality and virtual reality applications.
Entertainment: 5G can enable high-quality video streaming, immersive gaming experiences, and other interactive media applications.
Retail: 5G can provide personalized shopping experiences through augmented reality and virtual reality applications.
Energy: 5G can enable real-time monitoring and control of energy grids, improving energy efficiency and reducing costs.
These are just a few examples, and as 5G technology continues to evolve, it will likely have an impact on many more industries in the future.
Spectrum Bands used for 5G deployment
Different countries use different frequency bands for 5G, depending on the availability of spectrum and local regulatory policies. In general, the mid-band spectrum is expected to be particularly important for delivering the high-speed, low-latency connectivity that 5G promises, while the high-band spectrum will likely be used for more specialized applications like fixed wireless access and industrial IoT.
Mid-band spectrum (1-6 GHz):
This includes frequency bands like 2.5 GHz, 3.5 GHz, and 4.5 GHz. Mid-band spectrum provides a good balance between coverage and capacity and is well-suited for applications like mobile broadband and IoT.
High-band spectrum (above 6 GHz):
This includes frequency bands like 24 GHz, 28 GHz, and 39 GHz. High-band spectrum offers extremely high data rates and low latency, but has limited coverage and can be affected by obstacles like buildings and trees.
To enable 5G, mobile network operators will need access to a significant amount of spectrum in these frequency bands. The specific amount of spectrum required for 5G deployment will depend on a variety of factors, including the level of demand for 5G services, the density of mobile devices and infrastructure, and the available spectrum resources in a given region. In many cases, governments will need to allocate an additional large amount of spectrum to mobile network operators in order to fully support a viable 5G network rollout.
In general, 5G networks require much more spectrum than previous generations of wireless technology in order to deliver the higher data rates and increased capacity that they promise. Generally, spectrum experts say that around 80MHz-100MHz would be a minimum viable spectrum requirement for 5G deployment.
Unconventional ways to Get 5G in Pakistan
- Limited Use Licenses (Time and Territory):
Limited use licenses for spectrum refer to the practice of granting licenses for the use of specific frequency bands for a limited period of time or in a limited territory. Limited licenses can be granted for a variety of reasons, including encouraging the development of new services, promoting competition in the market, or facilitating the introduction of new technologies such as 5G. In this regard, the Frequency Allocation Board (FAB) and PTA should offer limited licenses of 80MHz-100MHz in the 3.5GHz frequency band to deploy 5G. The Government can offer limited licenses on the 5G spectrum in 3 or 5 major cities of the country for 3 years timeframe. The scope could be enhanced after the initial time frame.
Limited licenses on the existing spectrum however can have both advantages and disadvantages. Here are some of the pros and cons:
Pros:
- The limited use spectrum essentially means less money that telcos or new entrants have to pay for licenses upfront easing up on the adoption of the 5G technology and investing the monies on infrastructure development. Limited licenses will help to reduce costs for telcos as they may only need to pay for the limited scope of the spectrum that they are using for a limited time rather than having to pay for access to the spectrum for the entire 15 or 20 years and larger coverage. The operators should be allowed to increase scope of the licenses after the initial period both in terms of time and coverage after the initial period to make it more conducive for the rollout of their network for long-term business viability.
- Limited licenses can help attract newer players to the market (in case existing MNOs show reluctance) to ensure the availability of applications by new entrants or for specific uses, such as for IoT devices.
Cons:
- With limited licenses, companies may be less likely to make significant investments in infrastructure, research, and development because they may not have the certainty that they will have access to the full spectrum in the future. This can lead to less innovation and slower development of new services.
- License to one Infrastructure Company
Providing a license to a single infrastructure company for leasing it to all mobile network operators (MNOs) can also be advantageous for 5G deployment, as it can assist in overcoming some of the obstacles related to deploying new 5G infrastructure. On the other hand, if each MNO is responsible for building its own infrastructure, deploying 5G infrastructure can be time-consuming and costly. Therefore, by granting licenses to a single infrastructure provider, deployment can be made in a more efficient manner by accelerating the process and reducing expenses.
In addition to that, MNOs can lower their expenses by leasing infrastructure from a single company because they do not need to invest heavily upfront on the license and infrastructure but rather concentrate more on service delivery. This can increase market competition by making it simpler for even new entrants to enter the market.
Pros:
- By sharing infrastructure, the utilization of resources such as spectrum and physical infrastructure will be made more efficient. The infrastructure provider will be able to distribute resources more efficiently, resulting in improved coverage and service quality for all MNOs.
- This can reduce capex and opex for 5G service providers by leasing infrastructure from a single company because they do not need to invest in their own infrastructure. This can increase market competition by even making it simpler for new entrants to enter the market.
Cons:
- Allowing one infrastructure firm to lease to all MNOs can lead to a lack of diversity in the market. This might result in less innovation since fewer companies would compete to create new products and services.
- The single infrastructure provider could turn into a monopoly, resulting in higher pricing and fewer options for MNOs and their customers.
- Trial licenses to OEMs for R&D.
In order to bring 5G into the country, the Government can also provide trial licenses to Original Equipment Manufacturers (OEMs) like Huawei, Ericsson, ZTE, etc., for research and development purposes. By providing OEMs with trial licenses for 5G research and development, it may be possible to encourage OEMs and other entities to innovate and test new technologies and solutions that will benefit the 5G ecosystem.
Pros:
- The deployment process of 5G will be accelerated by allowing OEMs facilitate R&D with trial licenses ensure HR development in understanding and managing newer technology and even complementing the downstream industries such software development industry in Pakistan
- Trial licenses can be less expensive than full-scale licensing, making R&D by OEMs more useful.
Cons:
- There may be restrictions on the number of users and the amount of data that may be transferred with a trial license. This can reduce the efficiency of the R&D process and OEMs’ capacity to thoroughly test their products and services.
- OEMs may be unwilling to share their intellectual property with the licensing provider, which might hinder the license provider’s capacity to properly serve OEMs.
- License now pay later
The Government can also offer ‘license now pay later’ option to telcos for the quick deployment of 5G in Pakistan. The “License now, pay later” system for spectrum is a policy that allows telecommunication operators to buy licenses for spectrum that they will use for network services, but instead of paying the whole cost upfront, they are allowed to pay over a certain time period. This strategy aims to reduce the financial burden on telecommunications providers, particularly those that must make substantial expenditures in building new networks such as the transition to 5G.
Pros:
- In the context of the 5G rollout, the “License now, pay later” strategy for spectrum can prove to be a great approach for telecommunications providers, especially in a country like Pakistan that has high spectrum prices.
Cons:
- This option also carries some financial risk, both for the operator and for the government. If an operator fails to make payments on the spectrum, it could lead to financial losses for the government and potentially disrupt the operator’s operations.
- Revenue Share License
The authorities in Pakistan can also go for a revenue share license scheme for awarding spectrum for 5G deployment. A revenue share license scheme for spectrum in 5G deployment is a model in which the government grants a license to an operator to use the spectrum for a certain period of time and in exchange, the operator agrees to share a portion of the revenue generated from the use of that spectrum. This can prove to be really beneficial in the current atmosphere, given the financial outlook of telcos.
Pros:
- A revenue share approach can assist governments in generating more cash through spectrum licensing, which can be used to finance programs such as infrastructure development, education, and healthcare.
- The government and the operator share the risk involved with the deployment of a 5G network under a revenue share model. If the network is successful and generates income, both partners will profit, however, if it fails to do so, both parties will bear the loss.
Cons:
- A revenue share model might be more difficult to run than other licensing models since it needs revenue tracking and the enforcement of revenue sharing agreements.
The government of Pakistan should act with prudence by working on one of these unconventional ways to bring 5G into the country as the conventional way does not seem to bear any fruits as the ecosystem at present does not allow a conducive atmosphere for 5G deployment and roll-out of any sort by the existing MNOs or new entrants. 5G holds the key today and the countries that will be the pioneers in fully adopting this technology will shape the technological landscape of the future.
