The final word

The Pakistan telecoms market has been attracting the attention of investors and operators in the Middle East region not just because of the phenomenal growth taking place in the mobile space there, but also because of the pro-active role being played by the national telecoms regulator to promulgate the vibrant market. CommsMEA speaks to Major General (retired) Shahzada Alam Malik, chairman of the Pakistan Telecommunication Authority regarding his role in helping sustain the boom.

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By  Administrator Published  April 1, 2007

Statistics highlighting the extent of the growth and success being enjoyed by at least five of Pakistan's six mobile operators need no introduction; such is the spectacular levels it has reached in recent years. Overall teledensity in Pakistan hit 24% in June 2006, according to the ITU, a 15% increase over penetration rates during the same period in 2005. The majority of subscribers derive from Pakistan's increasingly dynamic mobile market, which during summer 2006 accounted for 84.6% of Pakistan's overall telephone connections, a 15% leap from the same period during the previous year, according to the Pakistan Telecommunication Authority (PTA).

Due to ongoing economic prosperity Pakistan's total telecoms revenue for the period 2005-2006 grew 30% from the previous fiscal year, reaching an overall revenue figure of US$3.2 billion. The telecoms sector is now the largest direct contributor to Pakistan's foreign direct investment (FDI), drawing US$1.7 billion foreign investment since 2003 and surpassing the US$1 billion mark over 2005-2006, according to the ITU, compared to US$494 million the previous year. In total the telecoms sector brings in 54% of Pakistan's overall FDI, a 53% increase compared to 2001-2002.

According to the PTA, the number of mobile phone subscribers in Pakistan reached 48.21 million in December 2006, with a mobile density of 31%, an increase of 11.43 million from July the same year. The last six years have seen the industry enjoy an average growth rate of 124%, and currently adds approximately 2.1 million subscribers a month.Analysts have forecast the number of mobile telecoms users in the country could realistically touch 110 million by 2011.

"Teledensity increased by about 120 % during the last year," says Major General (retired) Shahzada Alam Malik, PTA chairman. "Today telecoms services are accessible to more than 78% of the Pakistani population at very affordable rates. Almost every fifth Pakistani has a fixed or a mobile phone, and if we look at the mobile sector penetration, every month an average of more than 2 million cellular subscribers are added showing a growth rate of 170% in just one year."

The scope of investors in the telecoms sector showcases its attractiveness, with foreign mobile entrants Warid Telecom and Telenor Pakistan having entered the market in spring 2005; joining mobile industry leader Mobilink, which is owned by Orascom Telecom; Etisalat-backed Ufone; Paktel and Instaphone.

Operators and regulator agree that the addition of any more players to the market would be detrimental to its continuing successful expansion, and market leader Mobilink, somewhat predictably, actually foresees a period of consolidation, resulting in the reduction of long-term players in the market to just three or four.

"Mobile operators have already sufficient competition among each other," says Malik. "Introduction of any new operator would really hamper the growth and would have a negative implication on the operators from both a financial as well as commercial point of view," he asserts. Furthermore, Pakistan's Cabinet Committee for Regulatory Bodies (CCRB) has put a watch hold on the telecoms sector for another seven years, clearly indicating that sufficient competition has already been introduced into the sector and hence further competition is not required for the said time.

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