Govt Sets Base Prices and Spectrum Volumes for 5G Auction

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• Spectrum fee reflected in license in equivalent Pakistani rupees.
• PTA to conduct auction via transparent and competitive process.
• Base price for 1 MHz paired spectrum in the 700 MHz band set at $6.5 million.

Islamabad: The federal government has announced the minimum prices and spectrum quantities for the upcoming 5G mobile services auction, reported The News on Friday.

A formal policy directive has been issued through the Ministry of Information Technology and Telecommunication after clearance by the auction oversight committee, led by Finance Minister Muhammad Aurangzeb.

The policy stipulates that spectrum fees will be included in the license costs in Pakistani rupees, with the USD to PKR conversion rate based on the National Bank of Pakistan’s (NBP) spot rate from the day before the auction.

The directives specify that the Pakistan Telecommunication Authority (PTA) will manage the auction in a transparent, competitive manner across six spectrum bands.

The auction will include 15 MHz of paired spectrum in the 700 MHz band, 36 MHz in the 1800 MHz band, 20 MHz in the 2100 MHz band, 50 MHz of unpaired spectrum in the 2300 MHz band, 190 MHz unpaired in the 2600 MHz band, and 280 MHz unpaired in the 3500 MHz band.

The starting price for 1 MHz of paired spectrum in the 700 MHz band is set at $6.5 million. The base price for 1 MHz in the 1800 MHz and 2100 MHz bands is $14 million each. For unpaired spectrum, the prices are: $1 million per MHz in the 2300 MHz band, $1.25 million in the 2600 MHz band, and $0.65 million in the 3500 MHz band.

Payment terms include a one-year pause from the licensing date, during which no fees or interest are due. After this period, licensees can choose to pay all spectrum fees upfront within the first year or opt for a deferred payment plan.

Under the deferred plan, at least half of the total fee is due by the first anniversary, with the remaining amount paid in five equal yearly installments starting from the second year. The deferred payments will accrue interest at the rate of the one-year KIBOR plus 3% annually, calculated based on the rates announced by the State Bank of Pakistan.

Early full or partial repayment is allowed without penalty, though interest will still be applied up to the date of final settlement.

Successful bidders will receive spectrum licenses valid for 15 years, which will include provisions for spectrum trading and sharing according to approved regulations.

After the auction, all current cellular operators must, within a timeframe set by PTA, implement a spectrum rationalization plan to optimize the use of contiguous spectrum blocks, especially in the 1800 MHz and 2100 MHz bands.

The PTA will release an Information Memorandum outlining the auction process, eligibility, and participation procedures, with the auction scheduled to occur shortly after the policy announcement.

Spectrum allocation will be technology-neutral, suitable for existing and future mobile technologies, aligning with Pakistan’s government policy. Both current operators and new entrants can participate, but total spectrum holdings are capped at 40% of the total available after the auction.

A limit of 55 MHz (2×27.5 MHz) applies to combined low-band IMT spectrum, including the 700 MHz, 850 MHz, and 900 MHz bands, for all players. Additional restrictions include 140 MHz in the 2600 MHz band and 200 MHz in the 3500 MHz band.

Licenses will also specify phased rollout targets for next-generation mobile services, covering locations, sites, fiber connectivity, and service standards, to boost broadband access and service quality nationwide.

Existing operators participating in the auction will have their current rollout obligations replaced with new requirements and financial terms as per the details in the Information Memorandum.

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