In our fourth series of blog posts, we are introducing telecom sector trends and opportunities, turning to Pakistan.
The growing telecom market in Pakistan offers many opportunities for international investors. In fact Pakistani telecom market was ranked the third fastest growing market in the world in 2008, following the opening of the telecom market to private operators in 2003. The mobile sector has 5 main players: Mobilink has 29,2% of the mobile subscribers, Telenor 27,5%, Zong 19,3%, Ufone 15,5% and Warid 8,6% covering 92% of the land area according to Pakistan Telecommunication Authority’s (PTA) Annual Report 2014-2015.
The broad brand penetration has increased from 2,07% in FY 2013-2014 to 8,97% in FY 2014-2015 with subscribers increasing 345% to 16,89% at the end of FY 2015. Here Telenor leads with 24,7%, Mobilink comes second with 21,7%, CMPak third with 17,8% and PTCL fourth with 15,8% with 80% of users using 3G and 4G LTE services to access internet indicating the dominance of mobile broad band according to PTA’s annual report.
There were 114,7 million mobile subscribers in Pakistan as of mid-2015 with a penetration rate of 60,7%, which decreased with the biometric re-verification of SIMs as a part of government’s ‘National Action Plan’ to counter terrorism. Total of 215,4 million SIMs were verified making this re-verification a landmark in the telecom history of the country, potentially even globally, as every SIM is now verifiable through biometric signature and this has the potential to be utilised e.g. for mobile banking applications and E-commerce.
The government is keen to improve Pakistan’s broad band access. After the induction of Next Generation Mobile Services ie 3 G and 4 G LTE services in April 2014, 3G services now covering over 200 cities, PTA is now expanding the access to cover e.g. AJK and Gilgit Baltistan regions. Other improvements include deregulation of incoming calls, which has increased the incoming traffic nearly three times within 2015 according to PTA’s annual report. Another interesting development is the launch of ‘Smart Pakistan’- portal containing a variety of mobile applications covering agriculture, education, health and transport among others.
Telecom is one of the most dynamic sectors in Pakistan, with 908 million USD flowing into the country in FY 2014-2015, which is c. 58% of the total FDI into Pakistan facilitated by the liberal investment policies in the telecom sector allowing for 100% foreign ownership with 100% repatriation of profit.
Pakistan has received a couple of awards for the improvements in the telecom and ICT sector, e.g. PTA received the ‘Spectrum for Mobile Broadband Award’ at the Mobile World Congress in 2015 recognising the government that has the most transparent and stable long-term spectrum policy roadmap.
Mobile applications and E-Commerce offer many opportunities and this development is expected to boost growth in banking, education, health, media and retailing with e-education and e-health applications bringing benefits to the rural and remote areas of the country.