Pakistan’s 5G rollout: Spectrum secured, reality deferred

Recently Pakistan finally crossed a long-awaited milestone: the launch of 5G services in select parts of the country. The announcement followed the government’s spectrum auction held on March 9–10 in Islamabad, where 480 megahertz (MHz) of spectrum was sold for $507 million. The three major telecom operators, Jazz, Zong, and Ufone, competed fiercely, particularly for the prized 2600 MHz band, and walked away with significant allocations. On paper, the auction was a success. It nearly tripled Pakistan’s usable spectrum, a critical step given that between 2022 and 2025, 46 million new subscribers had joined without any matching increase in spectrum.

Yet, while the auction was celebrated as a breakthrough, the reality is far more complex. The spectrum sale is only the first step in a long and difficult journey. The structural, device, financial, and infrastructural bottlenecks that Pakistan faces mean that 5G, for now, is closer to a marketing story than a working technology for most citizens.

The most pressing challenge lies in the physical infrastructure required to carry 5G signals. Towers alone are not enough; the real bottleneck is the backhaul, the network that connects cell sites to the core. Globally, fiber-optic cable is the gold standard, capable of carrying terabits per second with latency measured in fractions of a millisecond. For 5G standalone networks, backhaul bandwidth above 10 Gbps per site and round-trip times under 5 milliseconds are essential.

Pakistan, however, is far from meeting these requirements. Only about 15 percent of cell sites are connected via fiber, while the remaining 85 percent rely on microwave radio links. These links have fixed capacity ceilings, degrade in bad weather, and cannot scale to the traffic loads that 5G will generate. Fiberizing a single site costs between $10,000 and $20,000, and with tens of thousands of sites needing upgrades, the capital commitment extends well beyond the half-billion dollars raised in the auction.

The problem is compounded by Pakistan’s Right-of-Way fee structure. Unlike India, which charges a one-time fee of roughly ₹1 per metre, Pakistan levies between PKR 35 and PKR 60 per metre every year. This transforms what should be a one-time capital expense into a permanent operational drain, discouraging investment. Unsurprisingly, Pakistan ranks 76th out of 93 economies on the GSMA Fiber Development Index. Without reform, fiberization will remain the Achilles’ heel of the country’s 5G rollout.

Even if the infrastructure challenge were solved, Pakistan would still face a demand-side problem: the lack of 5G-capable devices. Less than one percent of handsets in the country currently support 5G. Roughly 90 percent of locally assembled devices are still limited to 2G or 3G compatibility.

Imported smartphones face duties and taxes of up to 40 percent, inflating costs significantly. A budget 5G phone retailing globally at $150 ends up costing around $210 in Pakistan. For a country where 89 percent of the population cannot afford internet access, this price point is prohibitive. The government’s Digital Pakistan agenda, while ambitious, is undermined by its own tax regime on the very hardware required to access digital services. Unless local manufacturing policies succeed in producing affordable 5G devices, the technology will remain inaccessible to the majority of citizens.

Financial Bottlenecks: Investment and Revenue

The financial dimension of Pakistan’s 5G rollout is equally daunting. Baseline deployment costs are estimated between $3 billion and $8 billion, with rural extension adding another 20 to 35 percent. Yet Pakistan’s average revenue per user (ARPU) sits at just $1.10 per month, among the lowest globally, compared to the $8.20 global average. This makes it extremely difficult for operators to justify such massive investments.

Foreign direct investment (FDI) in Pakistan’s digital infrastructure has also declined sharply, falling from $1.67 billion in 2021–22 to $750 million in 2022–23. Telenor’s exit from the market underscored investor caution. Meanwhile, combined ICT taxes reach 34.5 percent, further squeezing margins. Spectrum prices are pegged to the U.S. dollar, meaning costs rise automatically as the rupee depreciates. Between 2017 and 2024, the rupee fell by 165 percent, dramatically increasing license costs for operators earning in local currency.

In this environment, the payback period for 5G investments is uncertain at best. Operators will inevitably seek to recover the millions spent on licenses, and with ARPU at rock bottom, the burden will almost certainly fall on consumers through higher tariffs.

Infrastructural Reality: Marketing vs. Mass Adoption

In theory, 5G can deliver speeds of up to 20 Gbps. Yet Pakistani trials recorded just 1.685 Gbps, highlighting the gap between promise and reality. The auction may improve 4G speeds in urban areas, but widespread 5G adoption remains a distant prospect.

The government’s ambitious targets, such as building 1,000 sites annually, with 200 greenfield builds, are laudable but difficult to achieve in the current economic climate. Without fiberization, affordable devices, and renewed investment flows, Pakistan’s 5G rollout risks being a symbolic milestone rather than a transformative leap.

Pakistan’s 5G spectrum auction was a necessary step, but it is far from sufficient. The country faces structural bottlenecks in fiberization, device bottlenecks in accessibility and affordability, financial bottlenecks in investment and revenue, and infrastructural bottlenecks in execution. Together, these hurdles mean that 5G is, for now, closer to a marketing story than a working technology for most Pakistanis. The millions spent by operators to acquire licenses must be recovered, and in an uncertain economic environment, that cost will almost certainly land on current consumers. Unless Pakistan reforms its policies, incentivizes investment, and makes devices affordable, the promise of 5G will remain aspirational.