5G Spectrum Auction Update: Base Prices & Payment Plans Finalised

The federal government of Pakistan has officially announced the base prices for the upcoming multi-band 5G spectrum auction. This move provides essential financial clarity to telecom operators preparing for next-generation mobile services in Pakistan.

The Auction Advisory Committee finalised these prices based on input from an independent international consultant. Consequently, the policy directive outlines specific costs for both paired and unpaired spectrum bands.

5G Spectrum Base Prices Breakdown

The government has categorised the pricing based on the commercial importance of each band. Notably, the 3500 MHz band, a critical frequency for global 5G services, has a set base price of $0.65 million per MHz.

Paired Spectrum Pricing (Per 1 MHz)

Frequency Band	Base Price (USD)
700 MHz	$6.5 Million
1800 MHz	$14 Million
2100 MHz	$14 Million

Unpaired Spectrum Pricing (Per 1 MHz)

Frequency Band	Base Price (USD)
2300 MHz	$1 Million
2600 MHz	$1.25 Million
3500 MHz	$0.65 Million

Currency Locks & Payment Plans

To protect bidders from market volatility, the government introduced a locked exchange rate mechanism. Operators must pay the spectrum fee in Pakistani Rupees (PKR). However, the conversion rate is fixed at the National Bank of Pakistan (NBP) TT selling rate from the day before the auction. This ensures certainty regarding currency fluctuations during the bidding process.

Furthermore, the policy offers flexible payment options. Winning operators can choose between two methods:

1. Full Payment: Pay the entire spectrum fee by the first anniversary of the license award.
2. Deferred Payment: Pay at least 50% of the total fee by the first anniversary. The remaining 50% is payable in five equal annual instalments starting from the second anniversary.

Interest Rates & License Validity

Operators opting for the deferred plan will face financing charges. The unpaid balance attracts a markup calculated at KIBOR plus 3% per annum.

• First Instalment: Uses the 1-year KIBOR rate from the license issuance date.
• Subsequent Instalments: Uses the KIBOR rate from the previous instalment’s payment date.

Operators can prepay the outstanding balance anytime within five years without penalties. However, the KIBOR plus 3% interest applies until the final payment date.

Finally, the spectrum license remains valid for 15 years. The directive also permits spectrum trading and sharing, subject to regulations by the Pakistan Telecommunication Authority (PTA).