ISLAMABAD ( MEDIA REPORT )
The telecom sector during the first three quarters of current fiscal year bagged some Rs 333.2 billion as revenue whereas it had secured Rs 449.6 billion in 12 months during previous fiscal year.
Statistics about the sector in a budget document has revealed that due to loss of millions of cellular subscribers after Biometric Verification System (BVS), reverification process and intense competition that forced them to lower tariffs, the revenues of the sector reflected declining trend since last year.
This decline is in line with international trend of profitability and revenues in telecom industry. However, the data revealed that Pakistan’s telecom industry could improve its revenue generation by expanding their value added services and entering into new avenues of growth such as branchless/mobile financial services and other information and communication technologies (ICTs) enabled services in collaboration with other service providers in the economy.
With regard to telecom contribution to national exchequer, the statistics reflect that during first three quarters of 2015-16, telecom sector contributed an estimated Rs 105.9 billion in national exchequer in terms of regulatory duties and taxes.
Pakistan Telecommunication Authority (PTA) and the telecom industry believe that rationalisation of taxes on telecom sector can induce better sectoral growth that would consequently improve tax collections in the long run.
Similarly, regarding telecom taxes, the data indicated that telecom companies collected a total of Rs 31.24 billion under head of GST during nine months from July 2015 to March 2016, almost 10 % lower than Rs 45.77 billion collection during July-2014 to June 2015.
About investments in telecom sector, the data showed that in terms of overall investment in telecom sector, the momentum started in fiscal year 2013 with the upgradation of telecom networks for 3G and 4G services.
Telecom operators have invested a significant amount of $589 million during July – March in fiscal year 2016. The main driver behind this investment is cellular mobile sector, which has invested $557.3 million during first three quarters of this year. The data suggests that by end of March 2016, total number of mobile subscriptions in Pakistan would reach 131.4 million.
BVS of SIMs last year had an adverse impact on cellular subscriber base. However, the industry has survived through tough period and continues to regain subscribers at a fast pace. It is expected that rise of mobile broadband would also have a catalytic effect on sale of SIMs.
The 3G and 4G LTE subscribers have reached 27.87 million by end March 2016, compared to 13.49 million by end June 2015, which reflects that on average, there have been more than one million subscriptions to 3G and 4G LTE networks per month.
As per market analysts, more coverage and reduced tariffs would further increase the uptake of 3G and 4G LTE subscriptions.
Regarding broadband subscribers, the data revealed that broadband subscribers base was gaining strong growth during July-March this year. At the end of March 2016, broadband subscribers stood at 30.99 million as compared to 16.89 million at the end of last fiscal year, depicting 83 percent growth over the last nine months.
The number of net subscriber additions in the period stood at 14.10 million. Most of the broadband subscriber base belongs to mobile broadband, launched in June 2014, which collectively formed almost 90 percent of total broadband subscribers now.
DSL, WiMAX, EvDO, HFC and FTTH collectively have 3.13 million subscribers at end of March 2016. This disparity in subscriber trends highlights substitution effect of mobile broadband on other broadband technologies. In order to further provide impetus to broadband sector, the analysts suggested that synergy of various elements is required. Therefore, external factors are also needed to be addressed, which include affordability, computer literacy, religious and cultural views regarding objectionable content on internet and lack of local content.
Regarding international incoming traffic, the data revealed that total international traffic (incoming + outgoing) stood at 14,545 million minutes during July-Mar this year as compared to 5,643 million minutes during same period last year.
In incoming traffic, the growth of 158 percent is an encouraging sign for the Long Distance International (LDI) segment.
The total international outgoing traffic minutes were reported to be 1,424 million during July-March 2016 as compared to 1,474 million in same period of previous year, mainly due to the rising trend in using over the top (OTT) services for international calls such as Skype, Whatsapp, Viber, Facetime, Line etc.