Telcos Propose Budget 2023-24 Tax Breaks for 5G Innovation

Due to the high Capex and Opex costs of bringing 5G to Pakistan, telecom companies have suggested that the government develop a plan to make money from 5G growth instead of frequency fees and taxes.

Telecom firms have asked for lower taxes on handsets made in the country and spectrum costs. In Pakistan, ROW choices must also be made through a single point of contact.

Pakistan put out well-developed 3G and 4G services in 2014. We can move forward on the road to 5G. Operators said that the Pakistani government and the Ministry of Information Technology and Telecommunications (MOITT) should still offer benefits to ensure this change goes well.

5G is now available in South Asia and will be coming soon to Pakistan. At the South Asian Telecommunication Regulators’ Council (SATRC) Workshop on Policy, Regulation, and Services (PRS) in Pakistan, the problem was also talked about.

Spectrum unification must be one of the main goals of the SATRC, said a representative of a telecom provider during a talk. This is very important to avoid problems or fights like those in the Gulf.

The fact that radio waves can go across countries shows how important the panel on frequency alignment is. In theory and reality, all countries must follow the same legal and technical rules for syncing methods, frame, and sub-frame sub-configuration, starting and finishing frequencies of bands, empty bands, and what causes them.

The 5G spectrum or bands have already been chosen for sale by the countries that are part of the SATRC. India and Bangladesh are still using 4G even though the 5G airwaves was put up for sale. Iran and the Maldives don’t have a lot of 5G services. Nepal and Sri Lanka are going through a hard time right now.

Telecom companies had earlier asked for 5G with free airwaves for five years and no import taxes on equipment and 5G phones or devices so they could start offering their services in the country.

Official sources say that the government is looking at several ways to bring 5G to at least the biggest towns in the country. The previous government planned to auction off the country’s 5G airwaves as early as March 2023, with the first rollout happening in big towns. Official sources said it couldn’t happen because of the political unrest in the country.

Senior government officials and industry members think it will be hard to get 5G up and running even by the end of December 2023, given the state of the economy and the telecom industry.

Telecom companies have suggested to the government how to roll out 5G services in the country.

Operators pushed for a new, very different, and workable 5G strategy that would take into account the following things:

  • Free space for the first five years and no import taxes on machines and 5G phones and devices. Any suggestion for sale should be made five years after the use cases have been developed.
  • The policy should make it illegal to make or bring 2G/3G phones into the country.
  • The Pakistan Telecommunication Authority (PTA) says that the Pakistani government will give a policy direction for the rollout of 5G in the country. This is in answer to pleas from telecom companies.

The Authority has also had to deal with several problems when trying to bring 5G services to the whole country. These include low mobile and optical fiber cable (OFC) adoption, rising inflation, low average income per user (ARPU), rising running expenses (OPEX), and high taxes.

First, Pakistan has very few mobile devices that can use 5G. Less than 1% of all mobile devices in the country can use 5G. Even though 5G technology has been put in many developed countries, the Authority said Pakistan has trouble offering the above services.

Some of the main things that could affect the start of 5G are low OFC uptake, fewer possible uses, less tower density, rising inflation, low ARPU, rising OPEX like higher fuel and electricity prices, and high taxes.

By the end of 2026, 5G is projected to have 3.5 billion users and produce about 45% of the world’s mobile internet data.

The Authority also said that Pakistan needs to start using 5G immediately if it wants to keep up with the rest of the area even though problems need to be fixed before the government can make a complete 5G policy.

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