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Telecom sector becoming important source of revenue

Telecom sector no doubt is the fastest growing sector and has created various opportunities in Pakistan. The Government of Pakistan showed in their statistics that this sector has shown optimistic growth during the first two quarters of FY 2017-18. The total teledensity stood 72.7 percent at the end of 2nd quarter of FY 2017-18, as against to 72.5 percent at the end of last fiscal year. The prime driver of teledensity rise is the growth in cellular mobile subscribers and the teledensity as of February 2018 is 74.2 percent.

Researchers revealed that technology is leaping forward, but humans hold the reins. It is being applied for the betterment of people, not for their belittling. Studies also revealed that technology empowers citizens to consume content where, when and with (or without) whom they want. Despite this technology-given capability, people would choose to invest over half a trillion dollars in 2018 on consuming content live, often with other citizens and not on-demand. People are utilizing digital to augment their live experience – be this in purchasing and distributing tickets via their smartphones, or streaming events on ever faster mobile networks. The majority of voice calls have already moved to mobile networks.

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The Government of Pakistan also mentioned that the revenues from telecom sector stood an estimated Rs. 235.5 billion during the period under review. The commercial launch of 3G and 4G Long Term Evolution (LTE) services has opened new opportunities for revenue generation for the mobile operators. Furthermore, availability of 3G and 4G services has enabled development of new applications and data base services, and people of Pakistan are rapidly adapting to these new technologies and services. Telecom investment in terms of overall investment in the telecom sector, the momentum that was started in FY 2012-13 for the up-gradation of telecom networks for 3G and 4G services has continued.

Official statements also revealed that telecom operators have invested US$ 322.9 million during the first two quarters of FY 2017-18.

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The main driver behind this investment is the cellular mobile sector which has invested US $267.94 million during the period under review. International experts revealed in various reports after contacting more than half of telecom CEOs, 57 percent, say they think international economic growth will enhance in this year-2018, and only 5 percent expect a fall. As it turned out, 2017 was a banner year for worldwide growth, so more improvement would mean quite a good year indeed. On the other hand, this sector is an important source of revenue generation for the national exchequer.

 

During the first two quarters of the FY 2017-18 telecom sector contributed predicted Rs78.62 billion to the national exchequer in terms of taxes, regulatory fees, initial and yearly license fees, activation tax, and other charges. The officials also revealed that 3G and 4G LTE subscribers have stood at 48.19 million at the end of December, 2017 as against to 42 million as of June 2017 which explains that on average, there have been greater than 1.0 million subscriptions to 3G&4G LTE networks per month.

More coverage and reduced tariffs has more increased the pace of 3G and 4G LTE subscriptions which reached at 51.2 million by the end of February 2018. Pakistan has become the large cell phone users. The human capital is very high as well and the job market is not filthy rich as compared to top ranked developing countries.

Pakistan became charming industry for cell phone manufacturers and distributors as well. Furthermore, broadband subscriber base showed strong growth during July, 2017 to December 2017. At the end of December 2017, broadband subscribers reached at 50.51 million as against to 44.59 million at the end of last fiscal year. The number of net subscriber additions in the period reached at 6 million. By the end of February 2018, the total mobile broadband subscribers were 53.5 million. By the end of December 2017, the total number of mobile subscriptions in the country stood at 144.53 million with the net addition of 4.77 million subscribers during July, 2017 to December 2017.

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Biometric re-verification of SIMs in 2014-15 had an adverse impact on the cellular subscriber base. However, the industry has survived through the tough period and continues to regain subscribers at a fast pace and the mobile subscriptions has increased to 147.5 by the end of February 2018. The subscriber base of local loop segment has stood 2.76 million at the end of December 2017 as against to 2.99 million as of June, 2017. Fixed Local Loop (FLL) subscriber base has been relatively steady as 2.72 million subscribers (Dec, 2016) are noted as against to 2.99 million (June 2017). The closure of PTCL’s Wireless Local Loop (WLL) connections and the mobile substitution effect has resulted into gradual decline of the local loop subscriptions.

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