Pakistan's major telecommunications operators face mounting financial pressures that put roughly $2 billion in planned digital infrastructure investments over the next three years at risk. To address these escalating operational costs, a special Prime Minister’s Office task force is reviewing recommendations to extend industrial power tariffs for telecom companies. The potential policy shift aims to align utility costs for mobile network operators with standard industrial rates across the country.

The directive from the Prime Minister's Office followed a direct joint petition sent to Prime Minister Shehbaz Sharif by the chief executive officers of Jazz, CMPak (Zong), PTMIL (Ufone and Telenor), and PTCL. The executives pointed out that despite the sector officially holding industrial status under national policies and legislation, telecom infrastructure continues to be billed under higher commercial electricity tariffs.

Rising Energy Expenses Threaten $2 Billion Infrastructure Plans

The request from telecom operators comes after years of compounding financial metrics that have squeezed profit margins across the sector. According to operational data provided by the carriers, commercial electricity tariffs for telecom infrastructure sites have escalated by approximately 197% since 2018. Over that same timeframe, generator and backup fuel costs surged by nearly 300%.

These rising utility bills coincide with declining top-line metrics across the industry. Average revenue per user (ARPU) dropped by approximately 22% since 2018, while companies faced an additional 5% withholding tax burden. Industry leadership warned the government that continuing to pay commercial rates directly threatens planned investments intended for 5G network deployment, cross-country optical fibre expansion, and artificial intelligence data centres.

Infrastructure costs have long dictated the pace of coverage expansion. Earlier moves, such as Engro’s $563M Tower Acquisition Reshapes Pakistan’s Telecom Industry, reflected how operators have tried to consolidate operations to manage heavy overheads. Shifting to an industrial power tariff would offer systemic relief across thousands of active tower sites nationwide.

Infrastructure Eligible for the Industrial Rate Proposal

The proposal submitted to the PMO task force explicitly separates operational network equipment from administrative real estate. Operators requested that industrial electricity tariffs apply solely to technical assets that maintain national connectivity services.

Under the proposed framework, the Pakistan Telecommunication Authority (PTA) would act as the certifying body to verify eligible sites. The specific infrastructure covered under the request includes:

  • Cellular mobile towers and base transceiver stations
  • Core switching centres and regional telephone exchanges
  • AI-ready data centres and central network operating centres
  • Fibre optic nodes and related digital distribution facilities

The operators specified that corporate headquarters, customer service outlets, third-party franchises, and retail locations would remain under standard commercial electricity categories. Alternatively, companies suggested that the government establish a dedicated "Digital/Telecom Infrastructure" electricity consumer category if direct conversion to industrial rates faces administrative hurdles.

Task Force Mandate and Policy Review Process

The specialized task force assigned to evaluate the issue was formally constituted on June 29, 2026, under the leadership of the Secretary of the Ministry of Information Technology and Telecommunication (MoITT). The group held its inaugural meeting on August 4 to structure its review process.

The PMO directed the task force to work closely with the Power Division and Finance Division. Together, these entities must calculate the total financial implications of the tariff change and design a clear mechanism to absorb the billing gap between commercial and industrial power rates.

Beyond basic tariff adjustments, the task force mandate includes investigating smart-grid integration for telecom sites and assessing the viability of dedicated power feeders. Telecom operators have committed to reinvesting any resulting utility savings back into core network upgrades, specifically targeting rural connectivity, fibre-to-the-home networks, and next-generation services.

Implications for 5G Rollout and Grid Consumption

Power availability and operating costs remain directly linked to technological rollouts across Pakistan. With existing networks straining under energy expenses, the progress toward commercial 5G relies heavily on stable operating budgets. Previous network milestones documented in Pakistan 5G Rollout Reaches 24 Cities Across 1,782 Sites show how hardware density drives up energy consumption.

Lowering grid electricity costs could also change how telecom companies source their daily energy needs. Industry estimates suggest that reduced grid tariffs would encourage operators to draw more power directly from the national grid, decreasing their reliance on off-grid solar systems and diesel backup generators. However, these grid consumption projections remain subject to independent verification by energy regulators.

As networks expand their data footprints, security and power management must scale together. Collaborative industry sessions like the PTA, Ufone and Telenor Host Zero Trust Cybersecurity Workshop for Telecoms highlight how infrastructure maintenance involves both operational resilience and cost management.

The proposal remains under formal evaluation by the Ministry of IT and Telecommunication, the Power Division, and the Finance Division. No immediate change to electricity rates has taken effect, as final implementation requires cabinet approval based on the task force's finalized recommendations.

Frequently Asked Questions

Why are telecom operators requesting industrial power tariffs?

Telecom operators face commercial power tariffs that have jumped 197% since 2018 alongside a 300% increase in fuel costs. Applying industrial tariffs helps lower basic site operating costs, enabling companies to sustain network operations and continue digital infrastructure investments.

Which telecom facilities would get lower electricity rates?

The proposal covers operational infrastructure including cellular towers, switching centres, telephone exchanges, data centres, network operating centres, and fibre nodes. Commercial offices, retail outlets, and customer service centres are excluded.

How much investment is dependent on this policy decision?

Major operators state that high operational expenses threaten approximately $2 billion in planned investments over the next three years earmarked for 5G deployment, expanded optical fibre networks, and modern data centres.

Source: Digital Pakistan