5G Auction Risks Widening Pakistan’s Digital Divide

ISLAMABAD: As Pakistan prepares for its inaugural 5G spectrum auction, telecom stakeholders have raised serious concerns that limited availability of 5G-compatible devices may severely restrict the technology’s widespread adoption, potentially confining benefits to a narrow segment of affluent users rather than the broader population. Industry estimates indicate fewer than three million 5G-enabled smartphones are currently in use nationwide — a negligible share of the total subscriber base. Without rapid expansion of affordable handsets, analysts warn that 5G could widen the digital divide instead of bridging it. The issue is compounded by the complete absence of local assembly for 5G devices. While domestic manufacturing has successfully reduced prices of 4G smartphones, all 5G handsets remain imported, keeping costs elevated due to customs duties, currency depreciation and global supply-chain pressures. Experts caution that deploying advanced networks without sufficient device readiness could replicate earlier mismatches where infrastructure investment far outpaced consumer uptake. They argue that handset affordability, incentives for local assembly and network rollout must advance in tandem to deliver meaningful economic and social impact. Concerns also surround the proposed auction structure. Stakeholders warn that high reserve prices and foreign-currency-denominated fees could divert operator capital away from network expansion and coverage improvement, slowing deployment. Telecom operators generate revenues primarily in Pakistani rupees and operate in a highly price-sensitive market. Exposure to foreign-currency obligations increases financial risk and limits the sector’s ability to invest at scale. Aligning spectrum pricing and payment terms with domestic economic realities is seen as essential for affordability and timely rollout. Drawing on recent reform experiences, industry voices argue that prioritising long-term sector sustainability over short-term fiscal gains will be decisive. As Pakistan finalises its 5G auction framework, stakeholders stress that true success should be measured by widespread adoption and economic impact rather than headline auction proceeds alone. A phased approach linking spectrum policy, device availability and deployment objectives will ultimately determine whether 5G becomes a mass-market technology or remains accessible only to a privileged minority.