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The Economic Coordination Committee (ECC) of the Cabinet has cleared the long-delayed 5G spectrum auction, approving key recommendations of the Auction Advisory Committee (AAC), including dollar-linked pricing fixed on auction day, a 50 percent upfront payment with the remainder payable over five years, and regional benchmarks to determine prices for new spectrum bands.
National Economic Research Associates Inc (NERA), a US-based international consultancy firm hired by Pakistan for the 5G spectrum auction had presented its report to AAC, which had also recommended lower prices and longer payment period.
The consultant had warned that high spectrum prices will result in fewer players, and levels of competition will decline, potentially leading to lower levels of innovation, high prices and other poor outcomes for consumers. The consultant has also recommended extending payment terms, arguing that the substantial investment required in networks and systems justifies longer schedules, similar to those used in Vietnam, Indonesia, and Bangladesh. Moreover, the consultant added that regulators may need to offer additional incentives for the 3.5 GHz band, which supports only 5G, even with growth in the 5G fixed wireless access opportunity.
PTA had also supported lower prices for spectrum auction, with the objective to attract investment in the sector and give more focus on rollout obligation to improve telecom services in the country.
AAC had reviewed spectrum valuation, auction design, payment terms and rollout obligations, and proposed measures to balance affordability for operators with sustainable revenue for the government. The ministers said further details, including the proposed auction date and available spectrum bands, would be shared by the IT ministry and PTA in due course.
