World is soon going to be a global village after the introduction of latest and advanced technologies while new innovations in technology making it more possible day by day.
The widely spread economic activities both in real and also in credit market is possible when they use advance technology to communicate. This is a reality that the world is rapidly moving towards an economic system based on the continuous and ubiquitous availability of information. Developing states try to sustain and develop their technology in such a way that they can become a part of this global village.
During 21st century to move into post-industrial, information based economic growth, states and sectors try to equip themselves with the necessary telecommunication system.
In the developing countries like Pakistan, the telecom sector is one of the fastest growing industries and has the highest mobile penetration rate in the south Asia region.
In Pakistan, China Mobile Pakistan (ZONG) envisions to enable a fully connected environment for Pakistani citizens by leveraging the technological edge in 4G LTE, whilst offering the most reliable and reasonable products in the market. On the technological front, Zong draws heavily from the research and experience of China Mobile Communications Corporation (CMCC), which is the largest telecom service provider in the globe, thus enabling cutting edge, state-of-the art services to subscribers. These high standards of performance are testified by the service award of ‘No.1 Operator in voice and data services’ by the Pakistan Telecommunications Authority (PTA).
Zong continues to sustain its market leader position in 4G with coverage in over 300 cities across the country and a 75 percent 4G market share. Presently the management of the company has announced its commitment to spend over $200 million for network expansion in 2017 and upgrade its entire network to 4G, which will be an unprecedented attainment.
Zong aims to enlarge its network by adding 3G/4G sites which are poised to reach the highest mark of 10,500 by the end of this year. Zong had already spent 3.0 billion dollars in Pakistan in the present eras and is the first to spend in the auctioned 3G and 4G licenses two years back. Zong commenced its operation in Pakistan in April 2008 and with additional investment and network expansion, the management intends to enlarge its coverage 4G coverage to not only urban but also rural regions of Pakistan.
Zong’s 4G subscribers have stood a record 2.0 million, while it has enlarged its 4G coverage to over 300 cities across the country. Number of mobile users surpassed 140 million-mark, equivalent to 77 percent penetration rate in the country’s population of 200 million. Numbers of 3G/4G subscribers still account for a quarter of total mobile subscribers in Pakistan, emboldening a significance of investment and development in the fast data technologies. Total 3G/4G subscribers reached at 37.5 million as December 2016. In rural regions, 80 percent of the phones are 2G-powered and so, they couldn’t advantage from mobile broadband.
China Mobile Communications Corporation (CMCC) is the leading telecommunications services provider in Mainland China. December 2015, the group had a total staff of 438,645, and sustained a leading position in Mainland China in terms of customer base which reached 826 million. During 2015, CMCC was selected as one of the FT Global 500 by financial times and the world’s 2,000 biggest public companies by Forbes magazine.
CMCC was also recognized on the Dow Jones sustainability emerging markets index. CMCC is the only cellular network that offers uninterrupted, reliable coverage by tunnels, on highways, inside sky scraper elevators as well on top of Mount Everest. It has a global presence in Hong Kong, San Francisco, London and Pakistan and presently has international roaming partnerships with 406 operators in 237 states and regions. CMCC is listed on the New York Stock Exchange also the Stock Exchange of Hong Kong Ltd.
TAXES ON TELECOM
Pakistan’s Telecom sector has been complaining about heavy taxation for some time. During FY2016, it paid Rs158 billion in taxes to federal and provincial governments, which constituted 34.7 percent of the sector’s total revenues of Rs455 billion. The withholding tax on telecom at 14 percent is one of the highest. The Federal Board of Revenue (FBR) collected Rs48 billion as withholding tax (WHT) during FY2016 from 140 million mobile phone users. Of these, only Rs4 billion was claimed by taxpayers, while bulk of the Rs44 billion remained unclaimed as most subscribers were either below the tax threshold or did not submit a claim return.
GST on telecom in Sindh is 19 percent and 19.5 percent in other provinces, while the level of GST on other services and sectors is 13 percent-16 percent. Similarly FED on telecom services is 18.5 percent while it is 16 percent for other services. Presently the import duties taxes constitute 37 percent of device value. Moreover, there is Rs300 to Rs1,500 tax on handset, Rs250 sales tax on SIM issuance and Rs300 to Rs1,500 international mobile equipment identity tax.
No doubt telecom industry is one of the highly-taxed industries in Pakistan. The Government of Pakistan should abolish the heavy taxes in the upcoming budget FY2017-18 of Pakistan.