The Economic Survey 2024–25 has drawn global attention to Pakistan’s telecom sector, spotlighting a remarkable achievement: at just US$ 0.10 per GB, Pakistan offers the lowest mobile data rates in the region and the sixth lowest in the world. While the government hails this as a testament to regulatory foresight and market competition, industry insiders warn that these rock-bottom prices may be masking deeper structural vulnerabilities.

According to the survey, data costs have dropped a staggering 65% since FY 2018, from Rs 77.1 per GB to just Rs 27.0 in the first half of FY 2025. Officials attribute this to proactive regulatory practices, expanding broadband access, and competitive pricing among telecom operators.

However, behind these low figures lies a difficult balancing act for the industry. Experts argue that Pakistan’s race to offer the world’s cheapest telecom services may come at the cost of long-term sustainability.

“Affordability is important, but not if it leads to unsustainable operations for service providers,” said a former PTA official, speaking on condition of anonymity. “If operators are just breaking even, they can’t invest in better infrastructure, technology upgrades, or customer service.”

ARPU Is Up but Still Not Enough

Interestingly, Pakistan’s Average Revenue Per User (ARPU) has seen a slight uptick, hitting Rs 313 per month in December 2024. The increase is partially driven by a reduction in the multi-SIM phenomenon, broader smartphone adoption, and pricing flexibility.

Yet, Pakistan still lags behind its regional peers. For instance, India’s ARPU stood at the equivalent of Rs 370, Bangladesh at Rs 340, and Sri Lanka around Rs 360 by the end of 2024, according to GSMA estimates.

Low ARPU combined with low data prices presents a paradox: despite a rapidly digitizing user base and increasing data consumption, telecom companies in Pakistan continue to operate on thin margins.

Network Quality: The Silent Trade-off in Pakistan’s $0.10/GB Data

While data affordability is a win for consumers, many complain that service quality has not kept pace. From urban centers like Lahore and Karachi to semi-urban districts, users frequently report call drops, network outages, and slow 4G speeds.

“It’s great that data is cheap, but it’s frustrating when you can’t get even 1 Mbps speeds during peak hours,” said Ayesha Malik, a university student in Rawalpindi. “I often rely on mobile data to attend online classes, and the experience is inconsistent.”

The story is similar across Balochistan and parts of Sindh, where coverage remains patchy despite years of Universal Service Fund (USF) initiatives. Critics argue that operators prioritize subscriber growth over quality improvements due to limited financial headroom.

Local Manufacturing Booms, But Import Reliance Remains

The survey also touts Pakistan’s progress in mobile device manufacturing. Under PTA’s Mobile Device Manufacturing (MDM) Regulations introduced in 2021, 36 companies have produced over 131.26 million handsets including 51.07 million smartphones, between January 2019 and March 2025.

This surge in local production has helped increase smartphone penetration to 67% of all devices on networks. Yet, the app economy remains underdeveloped, and high-end components still depend on imports, exposing the sector to forex volatility and supply chain issues.

A Race to the Bottom? Lessons from India and Beyond

Pakistan’s ultra-cheap data model is not unique. India experienced a similar price crash after Reliance Jio disrupted the market in 2016, leading to massive subscriber growth but also to industry consolidation and reduced competition. By 2020, several operators had either merged or exited.

If data is cheap but there’s no investment in networks, the user suffers eventually. We need to rethink whether we’re enabling access or enabling a race to the bottom.”

A similar trend could emerge in Pakistan if prices remain artificially low while inflation and operational costs continue to rise.

What Needs to Change?

Industry stakeholders suggest that Pakistan needs a balanced approach: maintaining affordability while ensuring financial viability for telecom companies. Some possible interventions include:

• Revisiting floor pricing to prevent unsustainable price competition.

• Offering tax relief or regulatory incentives for CAPEX investment.

• Creating performance-based subsidies for rural network expansion.

• Encouraging digital app and service development to increase value-added revenue.

Pakistan’s $0.10/GB Data: Affordability vs. Sustainability

Pakistan’s telecom sector stands at a crossroads. While ultra-cheap data is a point of pride and a lifeline for millions, it may also be undercutting the very foundations of a healthy, future-ready digital ecosystem. If affordability continues to outweigh quality and sustainability, users might find that cheap data comes with a high hidden cost.