In a report issued earlier this month, IEMR predicted that Mobilink will remain the market leader throughout the period from 2009 to 2014. However, the report assumed that there will be no mergers or acquisitions during that timeframe, an assertion that many analysts have cast their doubts on in recent months.
IE Market Research Corpora-tion is a market intelligence and business strategy research and consulting firm based out of Vancouver, Canada. Their area of expertise includes the telecommunications, information technology and government consulting services sectors.
“The wireless penetration rate is still low in Pakistan at approximately 60 per cent,” said an IEMR analyst in the report. “We expect that the country’s wireless market will continue to show strong growth.”
While subscriber bases are expected to continue growing, most analysts, including those at IEMR, do not seem to feel that average revenues per user (ARPU) will grow much further beyond their current levels.
ARPUs are a critical measure of the financial success of mobile telecommunications providers and Pakistani firms have struggled to prevent ARPUs from falling consistently over the past few years, largely due to the rapid expansion of the subscriber base coupled with intense competition within the industry.
Over the fourth quarter of 2009, the industry-wide average for ARPU declined by seven per cent. IEMR estimates that ARPU for the industry as a whole will average around $2.40 over the next five years, although they predict that Mobilink will have a higher-than-average $2.80. Its current ARPU is $2.88, up 1.8 per cent for the year. Zong, whose ARPU currently stands at $1.70, is expected to continue to see its ratio below the $2 mark.
Telenor profitability to improve
There are also predictions that Telenor will continue its stellar run in terms of increasing its profitability. Telenor has increased its EBITDA to 27.7 per cent during the first quarter of 2010. EBITDA is a key measure of a company’s profitability and refers to earnings before interest, taxes, depreciation and amortisation.
Telenor Pakistan reported an operating loss of Rs3.5 billion for the year 2009. Its losses, however, have been narrowing. For the first quarter of 2010, it reported an operating loss of Rs130 million, a figure that is 88 per cent lower than its reported losses in the same quarter of the previous year. In earlier interviews with the company’s management, they had refused to speculate on when the company will turn a profit.
Published The Express Tribune, June 30th, 2010.
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