Telecom operators in Pakistan may soon pay industrial rather than commercial electricity tariffs, after the Prime Minister’s Office (PMO) ordered a special task force to prepare final recommendations for the federal government.
The task force will work with the Power Division and Finance Division to determine the financial implications and a mechanism to absorb the tariff differential.
The order follows a joint letter to Prime Minister Shehbaz Sharif from the chief executive officers of Jazz, CMPak (Zong), PTMIL (Ufone and Telenor) and PTCL. They asked the government to extend industrial tariffs to licensed telecommunications infrastructure.
The operators said the telecom sector has been recognised as an industry under government policies and legislation, yet it continues to pay substantially higher commercial electricity rates.
Task force background
A task force headed by the Secretary, Ministry of Information Technology and Telecommunication (MoITT), was constituted on June 29, 2026. It is mandated to examine and implement industrial power tariffs for the sector, consider smart-grid solutions and explore dedicated power feeders to reduce prolonged outages.
Its members include the Chairman of the Pakistan Telecommunication Authority (PTA), representatives of the Power Division, the National Electric Power Regulatory Authority (NEPRA), telecom operators and distribution companies (DISCOs), and the Member Telecom, MoIT&T.
According to the operators, the task force held its first meeting on August 4, 2026, under the Special Secretary, MoITT. The companies have now asked for a policy decision to convert the initiative into a revised tariff arrangement.
Investment and cost pressures
The operators said the industry has committed about USD 2 billion over the next three years to 5G deployment and fibreisation. They are also investing in AI-ready, Tier-III data centres.
According to the CEOs, commercial electricity tariffs for telecom sites have risen by about 197 percent since 2018, and fuel costs by around 300 percent. Over the same period, average revenue per user (ARPU) has fallen by about 22 percent, and operators also carry an additional five percent withholding tax.
Basis for the claim
The operators cited the following in support of industrial classification:
- The Mobile Cellular Policy, 2004, and a Ministry of Industries and Production notification of April 20, 2004, which they say classified telecommunications as an industry.
- The Finance Act, 2021, which amended Section 2(29C) of the Income Tax Ordinance to include PTA-licensed operators in the definition of an industrial undertaking for tax purposes.
- NEPRA’s November 9, 2018 decision to extend industrial tariffs to dairy and poultry farms.
- A MoITT policy directive of January 6, 2026, on the auction of International Mobile Telecommunications (IMT) spectrum, which under paragraph (n)(vii) mandated a joint task force to examine industrial tariffs, smart-grid solutions and dedicated feeders.
Projected impact
The industry said industrial tariffs would cut operating costs and allow savings to be redirected to 5G deployment, rural connectivity and fibre-to-the-home (FTTH) expansion. It also argued that DISCOs would benefit, as operators would rely more on the national grid instead of solar and other off-grid systems.
According to industry projections, growth in solar off-grid operations could fall from 15 percent to 5–7 percent, while grid utilisation could rise by an estimated 15–20 percent.
The operators said higher consumption could offset DISCOs’ potential revenue losses within two to three years. These projections are industry estimates and have not been independently verified.
Proposed safeguards
The operators proposed an eligibility framework certified by PTA. Eligible infrastructure would include core hub sites, base transceiver stations (BTS), cellular towers, mobile switching centres, exchanges, AI and cloud data centres, FTTH nodes and network operating centres.
Corporate offices, customer service centres, franchises and retail outlets would be excluded. The companies also pledged to reinvest the savings in 5G expansion, rural connectivity and FTTH.
The companies asked the federal government to issue a policy directive extending industrial tariffs to telecom infrastructure. Alternatively, if reclassification requires a separate regulatory process, they proposed a dedicated “Digital/Telecom Infrastructure” consumer category with industrial rates.
They also sought directions to DISCOs to implement the new category within a defined timeframe. The operators said the reform is essential to accelerate digital infrastructure investment, improve the sector’s competitiveness and advance the Digital Nation Pakistan vision.
