Govt notifies base prices, spectrum volumes for 5G auction

• Spectrum fee reflected in licence in equivalent Pakistani rupees.
• PTA to conduct auction via transparent and competitive process.
• Base price for 1 MHz paired spectrum in 700 MHz fixed at $6.5m.

ISLAMABAD: The federal government has notified the base prices and spectrum volumes for the auction of next generation mobile services (5G), The News reported on Friday.

A formal policy directive has been issued via the Ministry of Information Technology and Telecommunication after approval by the auction supervisory committee, chaired by Finance Minister Muhammad Aurangzeb.

The policy states that the spectrum fee will be reflected in the licence in equivalent Pakistani rupees, with the US dollar to Pakistani rupee conversion based on the National Bank of Pakistan (NBP) TT selling rate prevailing on the day preceding the auction date.

Under the directive, the Pakistan Telecommunication Authority (PTA) will conduct the auction through a transparent and competitive process, covering six spectrum bands.

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

The base price for 1 MHz paired spectrum in the 700 MHz band has been fixed at $6.5 million. For the 1800 MHz and 2100 MHz bands, the base price for 1 MHz paired spectrum has been set at $14 million each. In the case of unpaired spectrum, the base price has been fixed at $1 million per MHz in the 2300 MHz band, $1.25 million per MHz in the 2600 MHz band, and $0.65 million per MHz in the 3500 MHz band.

Under the notified payment terms, a one-year moratorium from the date of licence issuance will apply, during which no payment or markup will be payable. Upon completion of the moratorium, licensees may either pay 100% of the spectrum fee by the first anniversary of licence issuance or opt for a deferred payment plan.

Under the deferred option, at least 50% of the total spectrum fee must be paid by the first anniversary, while the remaining 50 per cent will be payable in five equal annual instalments starting from the second anniversary.

The deferred amount will carry a cumulative markup at the rate of one-year KIBOR plus three per cent per annum, with the applicable KIBOR determined as per the rates prevailing on the relevant payment dates, as published by the State Bank of Pakistan.

Early repayment of the outstanding balance, in full or in part, will be permitted without any prepayment penalty, though markup at the prescribed rate will apply up to the date of final payment.

Successful bidders will be issued new spectrum licences for a period of 15 years. The licences will also incorporate provisions for spectrum trading and spectrum sharing in line with the approved regulatory framework.

Following the completion of the spectrum auction, all existing Cellular Mobile Operators (CMOs) will be required — within a timeframe to be determined by the PTA — to comply with a spectrum rationalisation plan.

The plan, to be issued by the PTA in consultation with the Frequency Allocation Board (FAB), aims to ensure optimal utilisation of contiguous spectrum holdings in the 1800 MHz and 2100 MHz bands.

The PTA will issue an Information Memorandum (IM) detailing the auction mechanism, including eligibility criteria and procedural steps for participation. The auction will be conducted within the minimum reasonable time following the issuance of policy directive.

The spectrum assignment will be technology-neutral, allowing its use for all existing and future advanced mobile technologies in line with the Government of Pakistan’s policy framework. Both existing CMOs and new entrants will be eligible to participate, subject to an overall spectrum cap of 40 per cent of the total spectrum available post-auction.

Additionally, a cap of 55 MHz (2×27.5 MHz) will apply to aggregate low-band IMT spectrum holdings — comprising the 700 MHz, 850 MHz, and 900 MHz bands — including both existing and newly acquired spectrum. Further band-specific caps of 140 MHz in the 2600 MHz band and 200 MHz in the 3500 MHz band will also be enforced.

Terms and conditions relating to phased Next Generation Mobile Services (NGMS) network rollout — covering parameters such as the number of cities, sites, fibre-to-the-tower connectivity, and enhanced Quality of Service (QoS) standards — will be incorporated into the licences by the PTA, as recommended by the advisory committee. These measures are aimed at accelerating mobile broadband penetration and improving service quality nationwide.

Existing CMOs that participate in and secure spectrum through the auction will have their current network rollout obligations replaced with new obligations, along with revised financial instruments, in accordance with the mechanism outlined in the Information Memorandum.