The telecom sector has continued making investments in Pakistan over the expansion and upgrading of its network of infrastructure and services across the country as various telecom operators invested an amount of $465 million during the period of July to February, according to Pakistan Economic Survey 2020-21.
The operators made investments of $363.9 million on various capital and operational projects whereas, foreign direct investment to the tune of $10.1 million was received during the said period, the survey reported citing the data of the State Bank of Pakistan.
The main driver behind this investment is the cellular mobile sector, which has invested $253.5 million during the period. However, the telecom sector invested over $1.61 billion in the previous financial year 2019-20.
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The Telecom sector has emerged as one of the vibrant sectors of Pakistan’s economy. Increasing revenues, growing investment, and enhanced contributions to the national exchequer are hallmarks of the sector for many years now.
From July 2012 to February 2021, the telecom sector has attracted over US$ 3.9 billion of FDI.
The Telecom sector is a significant source of revenue generation for the national exchequer. The telecom sector’s contribution (including PTA deposits) to the national exchequer registered 129 percent growth in FY2021.
The cellular mobile sector in Pakistan demonstrated impressive growth in terms of the nationwide expansion of networks and provision of broadband services. According to the PSLM Survey 2020, 98 percent of urban households in the country have mobile phones, and about 45 percent of individuals own them.
Cellular mobile subscribers (number of active SIMs) in Pakistan reached 182 million at the end of March 2021 compared to 167.3 million at the end of June 2020, showing a growth of 8.6 percent in nine months. Growth in this segment is a healthy sign for the operators as more subscribers mean more revenue-generating opportunities.
Additional Revenues from Telecom Sector
During July-December FY2021, the telecom sector contributed an estimated Rs 97.7 billion to the national exchequer in terms of taxes, regulatory fees, initial and annual license fees, activation tax, and other charges.
The non-tax revenues stood at Rs 1,227.6 billion during July-March FY2021 against Rs 1,324.4 billion in the same period of last year, showing a decline of 7.3 percent. The decline is mainly attributed to the absence of a one-off renewal fee for GSM licenses from telecommunication companies.
Telecom Sector Revenues
The International Telecommunication Union reported a decline of 5-10 percent in telecom sector revenue across countries owing to the COVID-19. Pakistan was no exception in FY2021, as telecom sector revenue declined to Rs 541.4 billion, which was 4.1 percent less compared to last year. Revenues from the telecom sector in two quarters 2021 reached an estimated Rs 276.0 billion.
Cellular mobile subscribers (number of active SIMs) in Pakistan have reached 182 million at the end of March 2021 compared to 167.3 million by the end of June 2020, showing an increase of 8.6 percent in nine months of FY2021. At the end of March 2021, broadband (BB) subscribers reached 100 million. The total BB} penetration in Pakistan stood at 47.6 percent in March 2021, registering an increase of about 19.7 percent as compared to the end of March 2020.
Teledensity
At the end of March 2021, total teledensity in the country reached 85.8 percent, registering a growth of 7.3 percent during July-March FY2021. The cellular mobile segment was the main contributor towards overall growth in teledensity.
The cellular mobile sector in Pakistan demonstrated impressive growth in terms of the nationwide expansion of networks and provision of broadband services. According to the PSLM Survey 2020, 98 percent of urban households in the country have a mobile phone, and about 45 percent of individuals own them.
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Cellular mobile subscribers (number of active SIMs) in Pakistan reached 182 million at the end of March 2021 compared to 167.3 million at the end of June 2020, showing a growth of 8.6 percent in nine months. Growth in this segment is a healthy sign for the operators as more subscribers mean more revenue-generating opportunities.
The subscriber base of the local loop (FLL&WLL) segment reached 2.46 million at the end of March 2021 compared to 2.40 million in June 2020. The net addition of 0.06 million subscribers translates to a 2.5 percent growth.
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