What creates hurdle in Pakistan's adoption of 5G?

KARACHI: The Pakistan Telecommunication Authority (PTA) in its annual report for 2024 stated that even with rising broadband penetration, Pakistan will have a difficult transition to 5G, The News reported Thursday. 

There are worries over the financial difficulties associated with Pakistan's transition to 5G wireless technology, even as the country's use and penetration of wireless telecommunication services, such as broadband and mobile, continue to grow.

Investment in Pakistan's telecom industry has decreased from a peak of about $1.6 billion in 2021–2022 to $765 million in 2023–2024 as a result of the global transition to 5G. Additionally, average income per user has apparently dropped in dollar terms as compared to other comparable nations, yet continuing to increase in rupee terms.

This "reflects that the market is very price sensitive...data usage is increasing [but] operators face challenges in monetarily monetising it effectively," the chairperson of the Wireless and Internet Service Providers Association of Pakistan (Wispap), Shahzad Arshad, remarked. “This impacts their ability to invest in large-scale projects like 5G, which requires significant capital," he said.

The PTA report also acknowledges the significant financial burden that the 5G transition will place on telecom operators, pointing out that the return on significant upfront capital investments may be gradual and cause telecom businesses to become cautious.

A major barrier to the widespread adoption of 5G in Pakistan is the scarcity of 5G-capable devices and their expensive cost, according to CEO of Jazz Aamir Ibrahim, the nation's largest mobile broadband user base. The Jazz CEO said the Pakistani currency’s devaluation raised functional expenditures for telecom corporations.

According to the PTA’s report, the number of mobile telecom subscribers in the country has risen from an estimated 168.6 million subscribers in 2020 to 193.4 million subscribers as of September 2024. Mobile broadband subscribers rose from less than 100 million in 2020 to 138.7 million subscribers as of September this year, representing an over 20% increase in broadband penetration within the same period. As of now, 95.5% of the cellular mobile sites in Pakistan operate on 4G or fourth-generation wireless technology, which accounts for just over 94% of the country’s mobile broadband subscribers.

However, the world is quickly moving beyond 4G to the faster next generation of wireless network technology represented by 5G. As of today, 5G networks are live in over 70 countries and over 100 additional countries have either 5G spectrum allocations planned through 2025 or 5G-ready commercial infrastructure deployments underway.

As per the PTA report, 5G delivers radical improvements over its 4G predecessor across key metrics such as peak data rates (20 Gigabits (Gbps) per second against just 1 Gbps for 4G). In simple terms, it is thought that the rollout of 5G will make internet connections across the world a lot faster and more reliable.

The PTA report claims that this “ultra-fast, low-latency connectivity” will help “stimulate economic growth and social development, create job opportunities, bridge the digital divide, and position Pakistan as a key player in the global digital economy”.

The PTA report also cites the urban-rural digital divide as a potential challenge to the country’s 5G rollout. These concerns are shared by Arshad, who highlights the need for “substantial policy reforms and incentives” to avoid a delayed or limited/urban-centric 5G rollout.

Similarly, the PTA report claims government incentives and public-private partnerships may be crucial to ease the financial strain that comes with 5G and promote the needed investments in the next generation of networks.