Pakistan telecom sector invests $496 million in 2011

By Telecom Lead Team: Pakistan
telecom sector has invested $495.8 million in 2011 with cellular mobile sector
being the leading contributor. Universal Services Fund (USF) also invested Rs
3.5 billion in unserved areas.

In FY 2011, telecom sector attracted over $79 million FDI in the country, which
is about 5 percent of the total FDI which came to Pakistan. FDI by the telecom
companies was more than 30 percent of the total FDI landed in the country
during last six years.


The Pakistan Telecommunication
Authority (PTA) is hoping that shifting of cellular mobile technology from 2nd
Generation to 3rd Generation would take place within March 2012. 3G is likely
to be the next big thing for the telecom sector.

The telecom and Information technology sector in the country is also looking
for potential opportunities with the possible emergence of 3G technology in


3G is a category of next generation
mobile networks that operates at a higher frequency bandwidth and a larger
channel bandwidth. 3G technology will enhance data speed and all convergence
services while broadcasting facilities would also be available at one
platform,” said M Younis, director PR, PTA.


Recently, State Bank of Pakistan
announced that Pakistan telecom sector’s contribution to Gross Domestic Product
declined in the financial year 2010-11 with profitability within the sector has
been eroded on account of rising marketing expenditure in response to
aggressive competition.


Pakistan telecom sector contribution
to GDP dips in 2010-11


Bank of Pakistan in its report The State of Economy said overall telecom sector
revenues recorded 6.7 percent growth during fiscal 2011 as compared to the
marginal 1.5 percent increase recorded in fiscal 2010.


increase in operating costs has also tended to offset overall revenue growth
witnessed in this sector consequently, both operating profits and margins of
telecom companies registered declines in fiscal 2011.


the telecom sector, the growth in revenues of cellular mobile companies showed
some stability in fiscal 11 after recording successive declines for the past
three years. Part of this improvement is attributable to growth in Average
Revenue per User (ARPUs) as well as the total cellular subscribers’ base.


the revenues of Local Loop providers continued the falling trend observed since
the past few years. The cellular density in Pakistan has been increasing
consistently, reaching 64.8 percent in April 2011 as compared to a level of
60.4 percent in June 2010.


level of mobile phone penetration is lower than most other regional countries,
suggesting that growth potential in this sector is still strong but it will
require additional investments in infrastructure to increase the subscriber
base further and tapping market’s potential, SBP report said.


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