As Pakistan moves forward with its 5G spectrum auction, the National Economic Research Associates Inc. (NERA), a US-based consultancy firm, has backed key demands from telecom operators, including extending payment terms, setting reasonable reserve prices, and shifting to rupee-based pricing. NERA warns that high spectrum prices could stifle competition, reduce innovation, and ultimately harm consumers by driving fewer players into the market.
In a presentation at the National Broadband Network Forum 2024, NERA highlighted that, despite short-term gains from high auction prices, the long-term economic and social benefits of a thriving telecom sector could be compromised. The firm emphasized that lower spectrum prices are likely to yield higher government revenues over time, as a competitive market encourages greater investment and innovation.
Pakistan’s telecom sector faces a pressing issue of spectrum scarcity, ranking lowest in South Asia for spectrum allocation, according to the GSMA Mobile Connectivity Index 2023. Factors contributing to this include delayed auctions, high base prices, unfavorable commercial terms, and a reliance on dollar-pegged prices that have surged due to the devaluation of the Pakistani rupee. NERA’s report stresses the need for reforms to enable a more efficient and sustainable sector.
Pl, watch the video and subscribe to the YouTube channel of republicpolicy.com
For the 2025 auction to succeed, NERA recommends several key reforms: reducing the reserve price to reflect the actual needs of 4G and 5G networks, moving to rupee-based pricing to better align with local economic conditions, and providing extended payment terms to accommodate the large investments required for infrastructure upgrades. Moreover, the firm advocates for improving the country’s fiber optic backhaul infrastructure and facilitating smartphone upgrades to ensure the widespread adoption of 4G and 5G services.
NERA also emphasizes the importance of infrastructure sharing among telecom operators to reduce costs and promote profitability, and the release of additional spectrum, such as the 190 MHz at 2600 MHz, to meet growing demand.
In conclusion, NERA’s recommendations highlight a crucial crossroads for Pakistan’s telecom sector. By focusing on sustainable pricing, incentivizing investment, and fostering competition, the country can lay the foundation for a successful digital future.
