Bad predictions about telecom sector

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REPORTS ARE predicting that Pakistans telecommunication industry will continue to suffer bad times particularly during the first half of the year 2013 thereby meaning no foreign direct investments, no progress, no more jobs and no economic activities even in the second half of the current year. The calling rates will go up while the industry as a whole will be focusing on regulatory side of the market to affect growth, in addition to further delay in the auction of 3G spectrum which was due to be completed in early 2012. Similarly, the increased level of taxes imposed on the telecom sector and the ongoing ban on YouTube as well as on SIMs sale at retail points across the country, repeated suspension of cellular services in various mega and business cities taking plea of security threats have been linked to the dampened progress in the telecom sector. Currently, the country is experiencing the completion of constitutional tenure of the sitting government to be followed by holding of general elections, then installation of new government, closing of financial year and the new budget; all these factors would send negative signals to investors who by all means prefer smooth and conducive environment for investments. Besides all these bottlenecks, what has so far dented the investment-friendly environment in the country and scared the new investors are the politically-influenced high profile appointments in the Ministry of Information and Telecom, Pakistan Telecommunication Authority, Universal Support Fund, ICT RandD Fund. Most recently the Lahore High Court has termed illegal the appointment of Mohammad Farooq Awan as PTA chairman creating bigger doubts of the governments integrity towards addressing the basic issues of the telecom sector. Repeated attempts of the authorities to misuse the USF funds, tug of war between the governments babus in the ICT departments and closure of a number of RandD projects speak volumes of the governments weak approach to progress this only sector which had posted a steep development uptil 2009. Telecom investments fell down to $495 million in 2010-11 and recorded a de-investment in the telecom sector up to $253.3 million as several telecom operators had decided to pull out the investment due to unfavourable investment conditions in Pakistan. The only hope of attracting FDI in Pakistan has now died with the inability of PTA to conduct 3G licensing in the country. According to the Mobile Cellular Policy of 2004, the 3G licensing was to be conducted in 2006, however, this is yet to materialize even after the expiry of another six consecutive years. This negative trends do give strength to the predictions about the negative development in this potential sector in the coming several months. The government needs to reshuffle its priorities, sense the gravity of the situation and take serious initiatives to undo the wrongs it has done in the past.


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Published in: Volume 04 Issue 04

Short Link: http://www.technologytimes.pk/?p=9956