Telecom Operators Demand Flexible Payments and Tax Reforms for 5G Rollout

Telecom operators in Pakistan have laid out critical prerequisites for the successful rollout of 5G services in the country. These include payment flexibility, such as local currency transactions and staggered payment plans, as well as lower tax rates. Additionally, operators have emphasized the need for sufficient spectrum availability in the 2600 MHz band, which is crucial for enabling 5G technology.

To streamline the process, the Pakistan Telecommunication Authority (PTA) has engaged National Economic Research Associates Inc. (NERA), a global consultancy firm, to provide recommendations on the allocation of 5G spectrum. The firm’s input will shape Pakistan’s 5G policy framework, aligning it with international standards while addressing local challenges.

Telecom Operators Demand Flexible Payments and Tax Reforms for 5G Rollout

NERA’s involvement signals PTA’s commitment to a strategic and data-driven approach to 5G deployment. The consultancy evaluates the telecom sector’s health, ensuring it is primed for investments and spectrum auctions. Additionally, NERA will propose innovative policy changes to address longstanding issues like financial constraints and spectrum management inefficiencies.

In its discussions with key stakeholders, NERA has focused on modernizing Pakistan’s spectrum allocation practices. Operators have expressed interest in adopting innovative auction models that differ from the traditional, upfront payment mechanisms. Instead, they seek long-term solutions such as staggered 15-year payment plans, moratoriums on initial payments, and adjustments in Quality of Service (QoS) standards to ensure the industry’s sustainability.

The telecom sector in Pakistan faces a myriad of challenges, including high taxation, declining revenues, and currency depreciation. These issues have hindered the sector’s ability to invest in advanced technologies. Operators have also advocated for formal recognition of telecoms as an industry, which could lead to more favourable regulatory and financial policies.

Another pressing concern is the availability of spectrum blocks. Operators have pointed out that the current availability of 140 MHz in the 2600 MHz band is insufficient for 5G deployment. Expanding the spectrum allocation is essential to create a balanced and equitable framework that ensures widespread adoption of 5G services.

While the industry is eager to transition to 5G, operators have highlighted the need to address existing gaps in 4G services. Many believe that a “4G for all” approach should remain a priority to ensure that underserved areas receive adequate connectivity before focusing on 5G deployment. Improved 4G infrastructure will also serve as a solid foundation for the next-generation network.

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“Addressing sector challenges must precede the establishment of any auction framework, as this is critical to ensuring the viability of network rollouts and attracting investment in future technologies such as 5G,” said Mudassar Hussain, Head of Public Policy & Regulatory Affairs at Jazz.

Shan Ul Haq, SVP of Corporate Affairs at Telenor Pakistan, echoed similar sentiments, emphasizing the need for balanced and forward-looking policies. “For 5G to be a success, it must be built on a robust policy framework that creates an investor-friendly environment for operators and benefits the consumers,” he stated.

The telecom sector eagerly awaits NERA’s recommendations, which will address key industry concerns and pave the way for a sustainable 5G rollout. With the right policies and reforms, Pakistan has the potential to unlock significant growth and innovation in its digital economy, bridging the connectivity divide and empowering its citizens with advanced broadband services.