2013-12-27 11:19:52 - Recently published research from Business Monitor International, "Pakistan Telecommunications Report Q1 2014", is now available at Fast Market Research
Pakistan's telecommunications market is one of the most underdeveloped in Asia Pacific. At end-2011, Pakistan had the region's second lowest mobile penetration rate, a situation that is also similar in the fixed-line and broadband sectors. Additionally, the regulator has yet to auction 3G licences, leaving mobile operators dependent on basic 2G voice and SMS, as well as organic subscriber growth for revenue generation. This leaves Pakistan with significant room for growth, although the potential could materialise only in the medium- to long term.
Full Report Details at
- www.fastmr.com/prod/754630_pakistan_telecommunications_report_q1 ..
* Pakistan's mobile sector continued to fluctuate due to events such as restrictions on SIM sales through retail channels. The market recorded 125.0mn mobile subscribers in the country at the
end of May 2013, up from 121.9mn in December 2012. Mobile broadband solutions, particularly EV-DO, continued to outperform and should overtake DSL in the next few years. EV-DO accounted for 36.2% of the broadband market in April 2013, behind DSL's 39.4% market share.
* Operators' ARPUs are expected to continue trending downwards due to the reliance on 2G services and rural expansions as well as government-enforced network outages in light of security concerns.
Pakistan fell to 15th position in BMI's Asia Pacific Telecoms Risk/Reward Ratings with a telecoms rating score of 44.1. According to most indications, the Pakistani economy is on track to record its highest annual real GDP growth rate since FY2006/07 (July-June), in line with our projection for full-year growth to come in at 4.0% this fiscal year (FY2012/13). For reference, the country achieved a 3.7% growth rate last fiscal year. Among other factors, a critical driving force behind Pakistan's slowly improving economic environment in recent years has been the aggressive easing of monetary policy by the State Bank of Pakistan
Key Trends And Developments
At the time of writing, the Pakistani government was yet to announce a concrete date for the auction of 3G licences. However, Prime Minister Nawaz Sharif gave the go-ahead for the much awaited 3G mobile spectrum licensing in October 2013. The government has issued 3G policy directives for the next generation spectrum auction - which includes keeping the auction technology neutral - and has directed the Pakistan Telecom Authority (PTA) to hire a consultant for the purpose. The authority estimated a target of around US$1bn to US$1.5bn should be raised from the spectrum licensing.
With effect from July 1 2013, the Federal Board of Revenue has increased withholding tax on telecom services from 10-15%. This will effectively increase prices through reduced customer recharge amount with the adverse effect on future revenues for all mobile operators.
In June 2013, Pakistan mobile operator Warid Telecom is rumoured to be attracting interest from China Mobile and Etisalat, after it was put up for sale by its owners, Abu Dhabi Group, who own the company in its entirety. The sale, which has also been understood to be only part of the company, could generate about US$1bn. Six operators currently contest in Pakistan's crowded mobile market, which between them account for more than 121.7mn subscribers at the end of March 2013, a cellular penetration of 69.4%. Warid, however, only occupies a meagre 10.2% market share.
China Mobile Pakistan (CMPak) re-applied for a long-distance and international (LDI) licence in Pakistan, as well as Azad Kashmir and Gilgit-Baltistan in April 2013. The watch-hold period of the government for granting LDI licences to new operators was concluded on March 23. Therefore CMPak is now eligible to secure the already approved LDI licence by the Ministry of Information, according to a letter by the CEO adviser to CMPak.
Pakistan's Universal Service Fund (USF) approved in mid-February 2013 a project to connect the country's rural regions to the main hospitals in cities by expanding the telemedicine network. Pakistan has been adopting telemedicine as a complementary strategy to strengthen its healthcare system, particularly increasing the rural population's access to healthcare, which is a major issue in emerging markets. BMI sees the possibility of greater participation from the private sector.
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