5MFY15: Five million subscribers added to 3G network

Growth helps country double its broadband subscriptions to 8m.

KARACHI: Pakistan’s telecommunication sector sold 5 million high-speed mobile internet connections within five months of acquiring third generation (3G) mobile spectrum licences with China Mobile Pakistan (Zong) dominating the market.

The four cellular mobile operators that each purchased a licence sold a combined total of 4.96 million 3G connections from July 2014 till November 2014, translating to 4% of the total subscriber base of 137 million, according to the Pakistan Telecommunication Authority (PTA) in its first ever public report on 3G and 4G subscriptions.

This growth has helped the country more than double its broadband subscriptions to 8 million, up from 3.7 million at the end of June, 2014.

China Mobile Pakistan (Zong) added 1.68 million 3G subscribers to the total, highest by any operator for the period under review followed by Mobilink and Telenor Pakistan that sold 1.44 million and 1.18 million 3G connections, respectively, while Ufone added 6,46,949 subscribers to its 3G network.



“This is a very satisfactory start to the 3G rollout, especially under challenging circumstances,” PTA’s Director General Commercial Affairs Dr. Muhammad Saleem told The Express Tribune. Import of telecom equipment was a problem for the industry, he said. “Once they are able to address that challenge, the penetration of mobile broadband will be much faster.”

The telecom sector’s revenue increased by 6% to Rs465 billion and its contribution to the exchequer almost doubled in fiscal year 2013-2014, according to the data. The sector contributed Rs234.5 billion in annual taxes, up 88% from Rs124.7 billion of FY2012-2013.

While the industry got off to a good start in the 3G market, the overall subscriber base, which is almost entirely on 2G or GSM network, was down by 2% to 137 million at the end of November compared to 140 million as of June, 2014.

The overall cellular user base decreased because of data cleaning, Saleem said. The trend would continue for another two to three months in the wake of the government’s instructions to verify unregistered subscriber identity module (SIM) cards.

Of the five operators, Ufone suffered the most, losing 1.8 million subscribers from July, 2014 to November, 2014 and finished with 22 million. It was followed by Mobilink that lost 319,134 subscriptions during the period under review – though it retained its position as market leader with 38 million subscriptions.

Telenor Pakistan and Zong remained the third and fourth operators with net additions of 114,840 and 58,051 respectively during the five-month period – Telenor had 36.6 million subscriptions while Zong had 27 million subscriptions at the end of November, 2014. Warid Telecom finished at number five with 12 million subscribers, losing 623,037 connections during the period.

“The initial number for 3G subscriptions indicate we got to a faster start compared to similar markets,” Information and Communications Technology expert Parvez Iftikhar said. “We were already very late in launching 3G technology.”

He said the latest figures for overall cellular subscriptions indicate a decline in the use of multiple connections and not the number of subscribers.

The numbers for 4G subscriptions weren’t impressive, PTA’s data show. Zong, the only operator that won a 4G or Long Term Evolution (LTE) licence in the April 23 spectrum auction, also added 1,452 subscriptions to its advanced LTE network as of November, 2014 – the company started rolling out its 4G services two months ago.

The rollout of 4G services started very recently, Iftikhar explains. “Its coverage is very limited because most smartphones in the country are not 4G compatible, and there is lack of awareness among masses regarding the importance of 4G. Many find 3G to be good enough for them.”

The ICT expert, however, said the penetration rate can increase manifold if the government plays its role.

“The government should promote nation-wide development of local content in the areas of education, healthcare, agriculture and e-governance to spur the demand for mobile broadband,” Iftikhar said.

Published in The Express Tribune, December 30^th,  2014.

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