Positive review of policies can jack up telecom industrys growth

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STAFF REPORT ISB: The revenues generated by the telecom operators in Pakistan have reached all time high at Rs 445.7 billion during 2012-13 as compared to Rs. 235.6 billion in 2006-07. The revenues of telecom operators grew by 8.9 per cent up from Rs. 409.2 billion during the same duration last year.

The fresh data on telecom industry issued by Pakistan Telecommunication Authority (PTA) shows that each passing fiscal year has witnessed increase in revenues of telecom operators as these were Rs. 280 billion in 2007-08, Rs. 333.8 billion in 2008-09, Rs. 355.6 billion in 2009-10 and Rs. 367.3 billion in 2010-11, while comparatively in the year 2013-14 the growth showed quite low growth.

It said that increasing revenues from telecom sector indicate the strength and size of the market despite the economic difficulties and tough competition, especially in the cellular sector. Moreover, revenues of Long Distance International (LDI) operators grew by over 200 per cent.

Telecom operators are now exploring new avenues to earn from, reducing dependence on the voice channels alone as they expect that influx of 3G technology into the telecom market will further boost the revenues of the sector.

The steady growth came on the back of the countrys growing teledensity, which stood at over 75 per cent at the end of FY13, translating to an increase of almost four percentage points over 71.73 per cent in the previous fiscal year.

Similarly, total number of cellular subscribers increased by 7 per cent to 128.9 million in FY13 when compared with 120 million as of June, 30, 2012 – indicating a steady growth from FY10 to FY13.

The report, however, said the cellular companies reduced their investments in the last two years as they already established most of their networks.

The data shows that the telecom sector had attracted $6 billion in foreign direct investment (FDI) since FY06 but FY13 ended on a negative note. FDI in telecom sector remained on the negative side of the scale as outflows of $408 million were reported during FY2013.

The revenue fall is shocking for the industry people who link this trend to the governments unfavourable and ad-hoc policies.

They are of the strong view that the local IT and telecom sector can be revived rather strengthened through introducing value added services as it would trigger business activities across the country.The government which is gradually taking various initiatives to secure the growth rate of previous years needs to promote as well as encourage software houses already working in the country so that they could tap their potentials to the capacity.

Local contents development has an important role in the growth of telecom sector. Though the PTA has acknowledged the significance of this factor, however, no tangible progress has so far been seen in this field.

Experts strongly suggest that the government should come forward and involve local organizations for the development of local contents along with relevant apps.

While talking to media, PTA chairman said that he was aiming for an advanced, technology driven, consumer oriented and business friendly environment where fair competition, affordable tariffs, high quality of services and extended land coverage would be the success benchmarks.

With the launch of the 3G technology, the telecom operators are now exploring new avenues to earn profit.

The document is designed to aid policy makers in synthesizing the best policies possible to ensure that the customer sanguinity and the technological advancement continue at the same pace. It is being prognosticated that numbers of mobile users, broadband subscribers and fixed line customers will surpass the marks of 160 million, 19 million and 5 million respectively, by 2020.


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Published in: Volume 05 Issue 35

Short Link: http://www.technologytimes.pk/?p=12009