THE DEREGULATION OF TELECOMMUNICATION SECTOR

Oct 11 - Oct 17, 2004  
ISSUE # 41  

The deregulation policy being followed by the Government of Pakistan has led to substantial investment in the telecommunication sector. Though, PTCL no longer enjoys monopoly, it still controls the largest market share. Lately, the largest growth has been witnessed in the cellular telephony segment. With the competition heating up further, consumers have emerged to be the largest beneficiary. It may not be wrong to say, telecommunication is the only sector where deregulation is benefiting the consumers.

 

 

SPECIAL REPORT
The banking sector in Pakistan is going through a fast-paced transitory process. New groups are buying out Pakistan operations of foreign banks and number of listed banks is also increasing. While the income from core banking activity is increasing due to higher business volume, earnings are also expected to further improve due to venturing into consumer finance, housing finance and enhanced lending to agriculture sector. However, there are growing apprehensions about the profitability from the new businesses because of absence of any track record.

INTEREST RATES
The interest rates in Pakistan, which had gone down to the record low during last two years, may start increasing in the days to come. Actually, the increase in interest rates is being related to the increase in the US where the interest rates had fallen to the ground level of one per cent soon after 9/11. Currently, the interest rates in the US are about to touch the level of 2 percent almost 100 percent recovery. However, the economy in Pakistan may not allow to absorb a shock of rapid increase in interest rates as the increase may stall growth in the sectors like automobile, housing and exports which have gained a momentum due to easy and low interest rates.