Oct 05 - 11, 2009

Pakistan telecommunication sector is growing faster than that of India with over 62 percent teledensity, encouraging the foreign direct investment (FDI). Pakistan is attractive country for foreign investors in terms of investment in telecom sector, mainly due to more liberal investment policy.

The ever-growing teledensity of Pakistan is giving more and more opportunities to the investors for better returns, especially in the field of data services. Services like mobile internet, mobile banking and internet Protocol Television (IPTV) hold fortunes for the investors.

With the enforcement of Deregulation policy, Pakistan Telecommunication Authority (PTA) was assigned the job of its implementation. PTA has successfully completed the first phase of telecom deregulation through a transparent and well-defined regime. During this phase, total 265 licenses were issued including 12 LDI, 73 FLL, and 180 WLL licenses.

Now, as different companies have obtained licenses, PTA is making efforts to ensure that licensees may start their businesses as soon as possible so that a larger number of population may benefit from these modern sources of communication and particularly residents of rural and far-flung areas might be able to take the advantage of these state-of-the-art communication and information services.

Sources in the PTA told Pakistan and Gulf Economist (PAGE) that the Authority was trying its best to bring more growth to the sector and was taking every possible regulatory measure to ensure healthy competition beneficial to the telecom users. PTA has taken a number of initiatives, which are proving to be very helpful, especially in the field of broadband proliferation, LDI re-emergence, and WiMax popularity.

According to them, India lagged far behind Pakistan with 37 percent teledensity as compared to 62 percent in Pakistan. Pakistan's foreign direct investment policy is much more liberal than that of India to attract more investment in Pakistan telecom sector. Due to tough competition, different telecom companies are providing most modern services to customers in Pakistan. Pakistani internet users can get MiM (Mobile Instant Messenger) Max99 which is Pakistan's first java-based mobile instant chat messenger, compatible with most of the GPRS enabled mobile phones, pocket PCs and other mobile devices. There are mobile messengers like mig33, yehba etc. Max99 messenger is similar, but it is more cheaper and it consumes less battery. Many of us do not care about their GPRS and battery consumption, however they do matter if you are avid mobile chatter.

Max messenger comes with smaller download size but numerous features. It has Chat rooms and group chat features as well. Max also has multi-kicking feature. Every user can create 12 IDs, which he/she can call in chat room for vote casting to kick multi IDs of other users (only multi IDs from 12 of other player) cannot kick original IDs. This kicking game is only for specific chat rooms, which are called playrooms. With the efforts of max team, there has been created very clean and friendly environment.

Slanders are dealt very quickly, users can kick bad users from chat room using kick vote method.

Telecom analysts around the world consider Pakistan as a lucrative market and Business Monitor forecasts that mobile subscribers in Pakistan would hit 100-million mark by next year.

WiMax has a brilliant future in Pakistan and this is further strengthened by the promising start of companies like Wateen, Wi-Tribe, etc. With more companies jumping into the market, the competition level will rise to compel the companies to bring down the tariffs, especially CPE charge. In addition, other technologies like Evolution Data Only/Evolution Data Optimised (EVDO) introduced in Pakistan by PTCL are gaining momentum.

PTA installed a system to monitor international incoming traffic volumes to identify antecedents of the carrier and detect any illegal traffic termed as "Grey" in the common jargon of the telecom market.

Grey traffic is not only affecting rightful share of licenced telecom operators who have paid handsome amount of money as licence fees, but are also incurring losses to government exchequer, reduction in foreign exchange inflows and posing threat to the national security as well. The system installed by the PTA in 2008, has been operational for more than a year, and has successfully detected several cases of illegal traffic termination in Pakistan, saving substantial amount of money for the government exchequer.

In Pakistan, currently 14 LDI operators are working under the licences from the PTA.

The system has been fully funded by all LDI operators and the PTA is only using it for monitoring and reconciliation of international incoming traffic to detect illegal /Grey traffic termination in Pakistan. Through the system, all telecom traffic coming in Pakistan from abroad is counted to ensure usage of authorised means to carry out this business to control illegal telecom traffic, billing verification and quality of service as required under the law.

According to telecom experts, the telecom sector in Pakistan has been growing at a rapid pace. However, slow growth of only 7 percent was witnessed for the first time ever last year in mobile sector. However, this trend was linked with other factors like international financial crisis, devaluation of Pak rupee, security situation, and re-registration of SIM programme.

According to them, Pak telecom sector is regarded as a sector where local and foreign investment rate has been highest. During last few years, high growth of telecom sector has set the course for a profitable business for investors and perpetual convenience for consumers. With the coming of new companies in this sector consumers are also enjoying more facilities and accessibility. Healthy competitive environment of the cellular mobile phone sector has a very positive impact over the market.

Telecommunication has now become one of the prime services, which an economy needs for rapid growth, development and modernization of its various sectors. Government of Pakistan awarded status of industry to telecom sector in year 2003-04. Benefits that accrue to a declared industry are now available to telecom sector. Over the past two decades, the institutional and regulatory framework of the telecommunications industry has changed radically. In most of the countries, public telecommunication operators (PTOs) have been privatized fully or partially and regulations concerning access to telecommunication markets, provision of services to users and pricing mechanisms have been overhauled.

For a long time, Pakistan lagged behind in the region as far as telecom access is concerned. Government of Pakistan has provided a number of incentives in terms of reduction in taxes and duties for further growth of this sector. Pakistan's mobile cellular industry has witnessed phases of dramatic changes over the years.

Due to growing revenues and fair competition in the market, operators will continue to provide telecom services in Pakistan and value-addition and innovation are future parts of telecom operators' growth.

Business leaders asked the government to provide incentives and extend support to promote information technology to help improve the economy.

Information technology remained neglected during last few years, thereby youth having professional degrees were anxiously seeking jobs. "If the government focuses on information technology it should not only provide job opportunities but also put the economy on the path of progress and prosperity," they believe.

They said it was regrettable that the pubic sector institutions were still hesitant to use information technology and continue to carry out their routine work on manual basis. "If we prepare computer software and export them to foreign countries, we would not have to pay shipment charges thus opening up a new window to earn foreign exchange," they said.

They also underlined the need to promote software industry so that the youth pursuing career in the field of information technology could make waves, as they lack nothing except proper and consistent support of the government. They urged the government to take effective measures for promotion of information technology in every sphere of life as there is no other way to walk with the developed countries that have done a lot in this field.


The total liquid foreign reserves held by the country stood at $ 14,491.1 million on 26th September, 2009. The break-up of the foreign reserves position is as under: -

i) Foreign reserves held by the State Bank of Pakistan: $ 10,935.4 million
ii) Net foreign reserves held by banks (other than SBP): $ 3,555.7 million
iii) Total liquid foreign reserves: $ 14,491.1 million