GSMA Warns Pakistan of $4.3bn Loss Without Immediate Spectrum Policy Reforms

Pakistan risks losing up to $4.3 billion in potential economic benefits over the next five years unless it urgently reforms its spectrum policy and accelerates the release of spectrum for mobile operators, the Global System for Mobile Communications Association (GSMA) has warned in a recent presentation to the government’s Spectrum Auction Committee.

The report, presented by Julian Gorman, GSMA’s Head of Asia Pacific, underscores the critical role of spectrum policy in shaping Pakistan’s digital future. The GSMA emphasized that spectrum allocation is not merely a technical requirement for mobile networks but a cornerstone of economic growth and digital transformation.

High Spectrum Costs Among the World’s Highest

According to GSMA analysis, spectrum costs in Pakistan are among the highest globally, consuming nearly 20% of operators’ recurring revenue.

Such elevated costs have direct negative consequences, including reduced mobile network coverage and slower data speeds. The report highlighted:

• A 10 percentage point increase in the spectrum cost-to-revenue ratio results in up to a 6 percentage point reduction in 4G and 5G coverage.

• The same increase leads to up to an 8% decrease in average mobile internet speeds.

These factors make mobile services less productive and less affordable, undermining Pakistan’s ambitions to expand internet access and build a strong digital economy.

Delayed Spectrum Release: A Costly Mistake

The GSMA warned that delays in releasing additional spectrum could have severe financial repercussions. It estimates a loss of between $1.8 billion and $4.3 billion in economic benefits over the next five years if reforms are not implemented promptly.

“Delaying spectrum allocation is not a neutral decision—it directly impacts national productivity, affordability, and digital competitiveness,” the report stated.

Recommendations for Sustainable Growth

To avoid these losses and support sustainable network investment, GSMA urged the Pakistani government to adopt a balanced and forward-looking approach to spectrum policy. Key recommendations include:

1. Resolve Outstanding Legal and Regulatory Issues:
   Address disputes and fiscal challenges to create a stable regulatory environment for mobile operators.

2. Set Reserve Prices Conservatively:
   Keep spectrum auction prices lower than previous auctions to encourage participation and network expansion.

3. Denominate Spectrum Fees in Local Currency (PKR):
   Reduce exposure to currency fluctuations, which currently add financial risk for telecom operators.

4. Flexible Payment Structures:
   Introduce installment-based payment options with affordable upfront fees to ease financial pressure on operators.

5. Deduct License Obligation Costs:
   Offset operators’ mandatory investment costs by deducting them from spectrum fees, promoting financial sustainability.

6. Commit to a Clear Spectrum Roadmap:
   Provide transparency and predictability to reduce uncertainty and help operators plan long-term investments.

The GSMA emphasized that the upcoming spectrum auction represents a pivotal moment for Pakistan. By implementing these recommendations, the country can fuel its digital transformation, enabling widespread mobile broadband access and fostering innovation across sectors.

Conversely, failing to act decisively risks stifling the digital economy, worsening connectivity gaps, and leaving Pakistan behind regional competitors in the race toward advanced 5G services.

As Pakistan strives to realize its vision of becoming a digitally empowered nation, the government’s spectrum policy decisions will play a defining role. GSMA’s warning serves as a wake-up call for policymakers to prioritize reforms, lower spectrum costs, and accelerate allocation processes.

Also read:

Pakistan’s Digital Future at a Crossroads: Insights from GSMA’s Julian Gorman