Money matters: Telecom sector sees $557.3m investment

Survey advises focus on value-added services, branchless banking

KARACHI: Cellular mobile operators invested $557.3 million to upgrade their 3G/4G broadband networks in the first nine months (July 2015 to March 2016) of the outgoing fiscal year, but revenues continued to decline, according to the Economic Survey 2015-16.

Investment in the entire telecom sector, including the Long Distance and International and Local Loop segments, totalled $589 million from July to March.

The survey said that revenues of telecom sector were estimated at Rs333.2 billion for 9MFY16. “Due to loss of millions of cellular subscribers after BVS Re-verification process and intense competition and low tariffs, a declining trend in revenues of telecom operators is being observed since last year,” it said.

However, it was noted that “…operators are adding back customers that were lost due to blocking of SIMs during biometric re-verification drive last year.”

The sector’s monthly revenue has declined by Rs1.6 billion per month in the outgoing fiscal year compared to the previous fiscal year.

Besides, the sector has paid a sum of Rs105.92 billion in duties, taxes and levies to the national exchequer in 9MFY16, it said.

The calculation suggested that full-year tax payment to the government would surpass previous fiscal year’s taxes of Rs126.26 billion with the addition of last quarter (Apr-June 2016) taxes - estimated to be Rs35.30 billion.



The telecom sector comes under the services sector, which grew at the rate of 5.71% in the outgoing fiscal year. A total of 3.35% of the 4.71% GDP growth came from the services sector alone, the remainder 1.36% from all sectors combined.

The survey said that, although the decline in revenue was in line with the international trend of profitability and revenues in telecom industry, “Pakistan’s telecom industry can improve its revenue generation by expanding their value added services and entering into new avenues of growth such as branchless/ mobile financial services and other ICT enabled services in collaboration with other service providers in the economy,” it advised.

According to latest data available with the Pakistan Telecommunication Authority (PTA), the number of mobile phone users has surged to 132.65 million at the end of April 2016 as compared to 114.65 million at the end of the previous fiscal year on June 30, 2015.

Similarly, the number of mobile broadband subscribers has increased to 28.67 million at the end of April 2016 from 13.49 million in June 2015. The Economic Survey noted that the number of broadband users was increasing by 1 million per month on average since the introduction of 3G/4G services in the country.

The survey said that the Telecom Policy 2015 is aimed at facilitating the attainment of an all-embracing national agenda and “to transform Pakistan into an economically vibrant, knowledge-based, middle-income country by 2025.”

Published in The Express Tribune, June 3^rd, 2016.

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