Government Plans to Cut Smartphone Taxes to Support 5G Rollout

The government is moving to slash taxes on mobile handsets in the upcoming budget, brushing aside concerns over low 5G device penetration as it prepares what officials and industry experts are calling the upcoming spectrum auction, a turning point for mobile network quality.

Officials revealed that a high-level committee led by the Secretary of Finance and the Chairman of the Federal Board of Revenue (FBR) is working on rationalizing handset taxes before the 2026–27 budget, a step aimed at accelerating the uptake of 5G-ready smartphones and supporting local manufacturing.

Government Plans to Cut Smartphone Taxes to Support 5G Rollout

Against this backdrop, the upcoming spectrum auction will play a decisive role in easing chronic network congestion and improving the quality of service across the country. The auction will follow a technology-neutral model, allowing mobile operators to deploy spectrum for 2G, 3G, 4G, 5G, and even future technologies such as 6G, depending on market demand.

Pakistan currently operates with around 274 MHz of spectrum — the lowest among regional peers. In the new auction, the government will likely offer approximately 600 MHz, potentially more than doubling the country’s available spectrum for mobile services.

Industry experts say limited spectrum has been a key driver of deteriorating service quality, particularly in densely populated urban centres. Additional airwaves are expected to reduce congestion, improve call quality, and significantly boost data speeds.

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Officials said concerns over low 5G handset penetration will not derail the auction. The Pakistan Telecommunication Authority (PTA) is already engaging with local mobile manufacturers to begin production of 5G-enabled devices, while the initial 5G rollout — expected to take around six months in major cities — is likely to coincide with a sharp increase in compatible handsets.

Analysts also cite Sri Lanka’s recent spectrum auction, conducted when 5G smartphone penetration was close to one percent, as evidence that early spectrum allocation can successfully support long-term digital strategy.

Under the technology-neutral framework, operators will be able to immediately refarm newly acquired spectrum to strengthen existing 4G and 3G networks, delivering immediate benefits to the vast majority of mobile users without waiting for mass 5G adoption.

With mobile data consumption continuing to rise, the auction is a critical step toward strengthening Pakistan’s telecom infrastructure and supporting broader digital and economic goals. Further details on pricing, timelines, and spectrum bands will be official in the coming weeks.