Telecom subscribers see dip after new rules on sale of SIMs

Industry’s consumer base shrinks by more than 2.7m users.

KARACHI: The telecom industry’s consumer base shrunk by more than 2.7 million subscribers since the government issued new directives regarding the sale of SIM cards through retail outlets, verification of users’ biometric information, and the number of SIMs issued against a single CNIC.

The number of mobile phone users shared between the five operators, according to Pakistan Telecommunication Authority’s (PTA) latest statistics, reduced to 120,819,220 in January, 2013 – reflecting a loss of 1,127,142 users, if compared to 121,946,352 users as of December 2012.

Cellular mobile teledensity, according to PTA’s website, dropped to 68% in January, down from 68.8% the previous month.

In November 2012, PTA had banned the sale of new SIM cards through retail networks with effect from December 1. It also instructed mobile operators to block unverified SIM cards and reduce the maximum number issued against a single CNIC to five.

The telecom industry has already lost about 2.7 million users since then.

Telecom operators who responded to The Express Tribune’s queries said that the reduction in the consumer base for the period under review is mainly due to the ban on sale of new SIM cards through retail outlets.

“The reduction of subscribers in December and January is a result of the new sales process imposed on the telecom retail network from December 1, 2012,” said Omar Manzur, Mobilink’s head of corporate communications.



Telenor Pakistan’s Director Corporate Communications and Responsibility Atifa Asghar had a similar view. “Blocking of unverified SIMs is a continuous process, which has been taking place consistently in the past as well. However its effects are more visible for the month of December 2012 and January 2013 because of the restriction on new SIM sales at the retail level,” she said.

Explaining, she said the cleaning and blocking of SIMs, due to re-verification, has reduced the number on one hand. On the other hand, she said, 99% of the retail channel was closed till January 2013 – the restriction had reduced industry’s sales by 80%, according to telecom sources.

The number does contain a certain number of customers lost due to SIM verification, according to Farooq Niaz, who is manager public relations and corporate social responsibility at Zong. “But mostly, it represents the churn – the term used to define the subscriber who is inactive for more than 90 days, or a subscriber who left your network,” he said. “When the retail network was operational, there were more people joining the network than leaving,” he added.

The negative growth, as per the industry’s response, is likely to continue till the sales points are equipped with biometric devices – an alternative suggested by the PTA.

“The number will fall eventually, as auto correction is taking place,” Niaz said. “If biometric verification is put into place, we might then see positive additions after that,” he said.

Mobilink, however, seemed optimistic about an early recovery.

“The sector has worked aggressively on improving the efficiency of the alternate channel as approved by the PTA,” Manzur said. “Operators have now started witnessing an increase in sales and the loss of subscribers will be reduced in February 2013,” he added.

Published in The Express Tribune, March 26^th, 2013.

Like Business on Facebook to stay informed and join in the conversation.