The GSMA, a global association representing mobile network operators, has written to the Government of Pakistan urging tax reforms in the mobile telephony sector ahead of the federal budget for 2025-26.
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In a letter addressed to Shaza Fatima Khawaja, Minister for IT and Telecom, GSMA highlighted the urgent need for structural reforms to support the telecom sector’s sustainability and growth. The letter, signed by Jeanette Whyte, Head of Public Policy and External Affairs at GSMA, points to Pakistan’s significant mobile usage gap — currently at 59 percent, the highest in South Asia.
“This means that although mobile broadband coverage reaches a large portion of the population, about 74 percent of those within coverage still do not use mobile internet services,” the letter explains. The “usage gap” refers to people who live in areas with mobile broadband coverage but do not actively use the service.
According to GSMA, mobile operators in Pakistan are overburdened with multiple sector-specific fees and taxes, which restrict their ability to maintain service quality, expand coverage, and invest in new technologies. The association cited its analysis of 2024 data, which revealed that the sector contributes around 42 percent of its revenue to taxes and fees — 18 percent of which comes from charges exclusive to the telecom sector. This figure significantly exceeds the South and Central Asia average of 26 percent.
Despite these challenges, the mobile sector in Pakistan has made considerable progress over the past decade, with 4G coverage now reaching nearly 84 percent of the population. Mobile technology has contributed to financial inclusion, education, and job creation — key drivers of socioeconomic development.
GSMA also emphasized the economic potential of increased mobile broadband penetration, noting that a 10 percent rise could boost GDP per capita by up to 2.43 percent. The persistent usage gap, however, remains a major barrier to realizing this potential, not only limiting economic growth but also constraining operator revenues and future investments.
The organization warned that the current tax structure hinders affordability, especially for low-income populations, thereby stalling mobile internet adoption.
“To close the usage gap, Pakistan must undertake comprehensive reforms to reduce sector-specific taxes and fees,” the GSMA asserted. “A more balanced tax framework would promote digital inclusion and enable mobile operators to invest in next-generation technologies, ultimately driving economic transformation.”
The GSMA concluded by urging the government to seize this opportunity in the upcoming budget to foster a more enabling environment for the telecom sector and to unlock the full potential of mobile connectivity in Pakistan.
