The federal government has announced base prices for multiple spectrum bands to be auctioned for next-generation mobile services, providing financial clarity to telecom operators ahead of the planned spectrum auction.
The base prices have been finalized on the recommendations of the Auction Advisory Committee and are based on input from an independent international consultant.
According to the policy directive, the base price for 1 MHz of paired spectrum in the 700 MHz band has been set at $6.5 million. The base price for 1 MHz of paired spectrum in both the 1800 MHz and 2100 MHz bands has been fixed at $14 million each, reflecting their commercial importance and role in expanding mobile broadband capacity.
For an unpaired spectrum, the base price has been set at $1 million per 1 MHz in the 2300 MHz band, $1.25 million per 1 MHz in the 2600 MHz band, and $0.65 million per 1 MHz in the 3500 MHz band, which is considered a key frequency range for 5G services globally.
The policy directive further states that the spectrum fee will be payable in Pakistani rupees, with the USD-PKR conversion rate locked at the National Bank of Pakistan (NBP) TT selling rate prevailing on the day before the spectrum auction.
This locked exchange rate mechanism is intended to provide certainty to bidders and protect them from currency fluctuations during the auction process.
The policy directive also outlines flexible payment options for winning operators. Licensees may either pay the full spectrum fee by the first anniversary of the license award or opt for a deferred payment plan.
Under the deferred option, operators must pay at least 50 percent of the total fee by the first anniversary, while the remaining 50 percent may be paid in five equal annual installments starting from the second anniversary.
The unpaid balance will be subject to an additional financing charge calculated at KIBOR plus 3 percent per annum. For the first installment, the applicable interest rate will be based on the one-year KIBOR prevailing on the date the license is issued. For subsequent installments, the KIBOR rate applicable will be the one prevailing on the payment date of the previous installment.
Operators will also have the option to prepay the outstanding balance at any time within five years without any prepayment penalty; however, the applicable interest at KIBOR plus 3 percent will continue to apply until the date of final payment.
The spectrum license awarded under the auction will be valid for 15 years. The directive further allows spectrum trading and sharing in accordance with the rules and regulations prescribed by the Pakistan Telecommunication Authority (PTA).
