5G launch seen as ‘nearly impossible’ in 10 months

ISLAMABAD: The launch of the 5G spectrum in Pakistan within 10 months is nearly impossible, The News has learned. The local mobile operators are not ready to buy 5G licenses owing to economic instability, continuous devaluation of Rupee against Dollar and lack of technology to support 5G spectrum in the country.

In addition to this, the federal ministry of IT and Telecommunications has also failed till now in introducing any 5G policy for auctioning of the license for the said spectrum.

It is also pertinent to mention here that Pakistan is already late if compared with other countries in launching the 5G spectrum.

However, the minister for IT and Telecommunications Umer Saif recently- after a meeting with Pakistan Telecommunication Authority- announced about the launch of 5G in Pakistan in 10 months.

The News tried to contact Saif and questioned him about what the authorities are planning on getting their plan executed under the given challenges. Nevertheless, this correspondent failed as there was no reply from the minister.

The questions asked through WhatsApp message were, “The local network operators are not ready to buy the licenses under current economic conditions. How will the authority compensate with them? Will they auction for lesser money and if so, how will the authority then build infrastructure for 5G spectrum? How else will the government facilitate local networks for 5G spectrum? Secondly, the ministry of IT has not yet issued any policy for a 5G license auction to PTA. The procedure itself is lengthy and takes months or even a year or more for completion. How is it possible under these circumstances to launch 5G within 10 months? Please comment”.

A well-placed source in Pakistan Telecommunication Authority revealed on condition of anonymity that the launch of 5G may be nearly impossible within 10 months because the local mobile network operators are not ready to buy the licenses owing to multiple challenges.

The source briefed that on one side, the ministry of IT has yet failed in issuing 5G licensing policy while on the other, the local network operators are not keen on investing 5G spectrum license due lack of technical infrastructure to support the said spectrum.

Explaining further, the source said that before the auctioning of licenses for 5G spectrum, the ministry of IT first issues a policy to PTA under section 8, which then hires international consultants to analyze and suggest auctioning templates. “Nothing has started as of today”.

The source maintained saying that already Pakistan has over 30 MHz frequency of 5G for quite a long time, but the operators are not willing to buy.

The government would have to start the bidding of auction of 5G spectrum from $800 million to one billion for successive launch which the local operators are not ready to pay, said the source.

For further understanding, The News reached out to local mobile network operators. One major operator briefed that Pakistan is a country where 3G/ 4G spectrum has not even reached to the optimum level because less than 50 percent of the users have mobile phones that support the said spectrum. Whereas, the handsets that support 5G spectrum may be available with even less than 5 percent of the total users, said a source working for a major local network.

“What will 5G benefit us in these circumstances? How will we pay a huge amount of dollars for a 5G license when we earn minimal in rupees which is devaluing every passing day?”.

After Uganda, Pakistan has the lowest Average Revenue Per User (ARPU) which has fallen to 0.85 dollars. In these conditions, how can local operators buy 5G licenses in millions or billions of dollars when we merely earn and at the same time, no infrastructure and technology is present to support 5G spectrum in the country, explained the source in local networks.

Further, the users have no buying power to afford handsets that support 5G due to higher taxes and import restrictions. For the successive launch of 5G, local operators will have to improve their networking sites which is also not possible at this time due to import restrictions and ban on LCs, the source said.

Aamir Hafeez Ibrahim who is CEO of Jazz Networks also explained the same through his tweet and an interview with a local news channel.

However, In Pakistan, auctioning of 5G Spectrum will be held within the next 10 months, while hurdles in the process relating taxation, teledensity and spectrum will be addressed on a priority basis.

This was announced after meeting between Caretaker Federal Minister for IT and Telecommunication Dr Umar Saif and Chairman Pakistan Telecommunication Authority (PTA) Maj Gen Hafeez ur Rehman (retired).

China launched 5G in 2018 while USA, India and Bangladesh launched 5G spectrum last year along with many other countries.

Last year in August, the Indian government earned over 1.5 lakh carors (Indian Rupees) through 5G spectrum auctions.

In Bangladesh last year, four mobile operators paid 106.45 billion taka (about US$1.25 billion) for 5G spectrum acquired in an auction organized by the Bangladesh Telecommunication Regulatory Commission. In the United States of America, the 5G spectrum auction generated proceeds of $22.5 billion in total last year. In China, three local mobile networks were assigned 5G trial licenses at the end of 2018 which was a success and the technology generated 10.6 trillion-yuan (about 1.36 billion EUR) worth of economic output and over 3 million jobs between 2020 and 2025, according to a research report by the China Academy of Information and Communications Technology.

From 2014 to 2017, the government of Pakistan earned over 1.8 billion USD through auction of 3G/4G licence to different mobile networks in Pakistan.

In 2021, Pakistan Telecommunication Authority (PTA) issued a 4G license to Ufone against the spectrum auction for Next Generation Mobile Services (NGMS), which included enhanced network rollout obligations and quality of service standards to ensure consumer interest.

Ufone had submitted a bid of $279 million for a 9MHz block in a 1800Mhz band, and since there were no other operators participating in the auction process, the total proceeds from the spectrum auction stood at $279 million.

In the same year, Pakistan Telecommunication Authority (PTA) issued new licenses to three cellular mobile operators after winning spectrum in the first-ever cellular spectrum auction for Next Generation Mobile Services (NGMS) in Azad Jammu & Kashmir (AJ&K) and Gilgit Baltistan (GB), which generated revenue to the tune of $30.322 million

In 2017, Jazz paid USD 295 million dollars as a base price and an additional 10% in taxes to start its work on expanding the existing 4G coverage in Pakistan. On 14 April 2014, four companies submitted their bids to PTA, including Zong, Ufone, Telenor and Jazz for Next Generation Mobile Services. Jazz and Zong bid for 10 MHz while Telenor and Ufone bid for 5 MHz.

Pakistan’s first spectrum auction to enhance mobile broadband services was held in 2014. The technology neutral spectrum in two frequency bands, namely the 2100 MHz band and 1800 MHz was auctioned by PTA. The Government earned $903 million from auction in the 2100 MHz band and $210 million from auction in the 1800 MHz band with total revenue of $1.12 billion from both auctions. Zong launched mobile services based on 4G technology in Pakistan from 1800 MHz band. Another license for 4G was not won by any participant. In the 2100 MHz band, 3G services were launched by Zong along with Jazz won 2x10 MHz license from 2100 MHz band. Ufone and Telenor won 2x5 MHz license for 3G from the same band. Later 2X10 MHz spectrum was auctioned in the 850 MHz band in 2016 and 2X10 MHz in the 1800 MHz in 2017. The winners were Telenor and Jazz respectively and another USD 690 Million were paid for the same. Taking the total to USD 1.8 Billion earned through auction from 2014 to 2017. The broadband subscribers increased from 3.79 Million to around 64 Million as of February 2019.