Prime Minister Shehbaz Sharif has directed a special task force to finalize recommendations regarding the extension of industrial electricity tariffs to telecommunications infrastructure. The Prime Minister’s Office requested that the task force consult with the Power Division and Finance Division to submit recommendations on financial implications and a proposed mechanism to absorb the tariff differential. This move aims to potentially reduce operating costs for cellular companies and support investment in 5G networks.
The direction follows a joint appeal from the CEOs of Jazz, CMPak (Zong), PTMIL (Ufone and Telenor), and PTCL. These companies urged the government to extend industrial electricity rates to licensed telecommunications infrastructure, arguing that telecommunications has long been recognized as an industry under government policies and legislation despite facing commercial electricity rates. The operators stated that rising energy costs are making investments in 5G, fiber connectivity, and AI ready data centers increasingly difficult.
A task force led by the Secretary of the Ministry of Information Technology and Telecommunication was established on June 29, 2026, to examine industrial power tariffs, smart grid solutions, and dedicated electricity feeders for telecom infrastructure. The task force held its first meeting on August 4, 2026, under the chairmanship of the ministry’s Special Secretary.
The telecom operators reported that they have committed approximately $2 billion in investments over the next three years for 5G deployment, fiber expansion, and AI ready, Tier III data centers. According to the CEOs, commercial electricity tariffs for telecom sites have increased approximately 197 percent since 2018, while fuel costs have risen around 300 percent. During the same period, average revenue per user declined approximately 22 percent, while an additional 5 percent withholding tax burden was added.
To support their classification as an industry, the companies cited the Mobile Cellular Policy, 2004, and a Ministry of Industries and Production notification from April 20, 2004. They also referenced the Finance Act, 2021, which amended Section 2(29C) of the Income Tax Ordinance to include PTA licensed telecom operators in the definition of an industrial undertaking. Furthermore, they pointed to a November 9, 2018, NEPRA precedent extending industrial electricity tariffs to dairy and poultry farms, and a January 6, 2026, policy directive requiring a task force to examine industrial tariffs for the telecom sector.
The companies argue that lower electricity costs would allow them to redirect savings toward 5G deployment, rural connectivity, and fiber to the home expansion. They also claim that industrial tariffs could encourage greater reliance on the national electricity grid instead of solar and other off grid arrangements. Industry projections suggest that extending industrial tariffs could reduce the growth of solar off grid operations from 15 percent to 5 to 7 percent while increasing grid utilization by 15 to 20 percent. Operators estimate that higher electricity consumption could offset potential revenue losses for distribution companies within two to three years, though these figures are industry estimates and have not been independently verified.
To prevent misuse, the companies proposed a PTA certified eligibility framework covering cellular towers, base transceiver stations, switching centers, exchanges, AI and cloud data centers, fiber nodes, and network operating centers. Corporate offices, customer service centers, franchises, and retail outlets would be excluded. The operators asked the federal government to issue a policy directive extending industrial electricity rates to eligible infrastructure or, alternatively, to create a dedicated Digital/Telecom Infrastructure consumer category under the existing tariff framework. They also requested instructions to distribution companies to implement the revised category within a defined timeframe. The operators pledged to reinvest the resulting savings in 5G expansion, rural connectivity, and fiber infrastructure to support Pakistan’s digital economy and the government’s Digital Nation Pakistan vision.
