Research Analyst
Dec 08 - 21, 2008

Mobilink GSM (PMCL), a subsidiary of Orascom Telecom, started its operations in 1994, and has become the market leader both in terms of growth as well as having the largest customer subscriber base in Pakistan with a base of over 31 mn and growing. Mobilink is the first cellular service provider to operate on a 100% digital GSM technology in Pakistan that also provides state-of-the-art communication solutions to its customers. Mobilink offers exclusively designed tariff plans that cater to the communication needs of a diverse group of people, from individuals to businessmen to corporate and multinationals. To achieve this objective, it offers both postpaid (Indigo) and prepaid (JAZZ) solutions to its customers. Compared to its competitors, both the postpaid (Indigo) and prepaid (JAZZ) brands are the largest brands of their kind in the Pakistan cellular industry. In addition to providing advanced voice communication services that makes the lives of mn that much easy, Mobilink also offers a host of value-added-services to its prized customers. At the same time, Mobilink places high importance to its coverage, which is why it covers in 10,000+ cities and towns nationwide as well as over 130 countries on international roaming service.


During the last 13 years, Mobilink has set up one of the largest cellular networks in the country. Currently, it is covering more than 10,000+ cities and towns. This has involved an investment in the company of more than US$ 1 bn. Mobilink has 66 Switches and more than 6,300 cell sites and the number keeps growing at a rapid pace. Mobilink also has deployed around 5,000 km of optical cable.

Years of Business 13
Cities 10,000+
Investment USD 1 Bn+
Switches 66
Cell Sites 6,300
Optical Cable Deployment 5,000 KM
Switches Nokia-Siemens, Alcatel, Huawei
Radio Base Stations Motorola and Alcatel.
Intelligent Networks Siemens
Microwave Equipment NEC and Alcatel
Operating Frequency 900/1800 MHz
Source: Mobilink


Mobilink was one of the major losers as it earned $378.9 mn in consolidated EBITDA, a loss of 5% from $398.3 mn in the year-ago quarter. As for the third quarter, net income was $90.4 mn, down from approximately $116 mn for the same quarter of last year. Mobilink's consolidated revenues, however, averaged around $934.6 mn, an increase from $921.5 mn in the year-ago quarter. Average revenue per user (ARPU) declined to $2.8 for the third quarter from $3.5 for the same period last year. The company spent $406 mn for the first nine months of 2008, up from $353 mn in the same period of last year. Similarly, the company's market share dropped to 34.8%, it was 36.4% last year.

Mobilink is certainly feeling the heat of the telecom slowdown and fierce competition. The subscription growth rate is also quite minimal i.e. less than 3 mn users joined the network in a 12 month period with current subscription standing at 31.4 mn while thousands also opted out, thanks to number portability. The company, though trying to lure customers with different schemes and packages, has failed to expand its customer's base.

Revenues (US$ 000) 921,465 934,591 1.4%
EBITDA (US$ 000) 398,320 378,860 (4.9%)
EBITDA Margin 43.2% 40.5% (2.7%)
Capex (US$ m ) 353 406 15.0%
Source: Mobilink


Market share is considered an important tool to gauge the level of competition in any sector of the economy. It helps the regulator to determine a significant market power player (SMP) in the marker whose tariffs needs to be regulated the safe guard the competition in the sector. Market shares of the cellular mobile operators indicates that market is moving towards perfect competition where the share of major operators are declining and new entrants are able to grab more share in the market. Market share of Mobilink has declined from 44.3 percent in March 2007 to 38.5 percent in March 2008 though it has added more than 7 mn subscribers during the period. Telenor, which is new entrants, has improved its market share from 16.3% in March 2007 to 20.2% in March 2008 and it has also added 7.6 mn subscribers during the last one year. Zong is another emerging player in cellular mobile market of Pakistan who is increasing its market share in the last one year to more than 2.6% in March 2008.

Mobilink 44.30% 39%
Ufone 20.90% 21%
Telenor 16.30% 20%
Warid 16.10% 17%
Zong 1.90% 3%
Instaphone 0.60% 0%
Source: PTA


Keeping in view the growth potential of the cellular industry there is no option but to be aggressive in order to remain a potent force in the cellular industry as the cellular market is getting saturated day by day and companies with more market shares are declining because of new entrants. Mobilink whose share during 1stQ07 was around 42% has gone down to 35% during 3rd Q08 as there are many reasons to which we can attribute this trend. There is decline in customer satisfaction, aggressive competition and market saturation. Perhaps this is one reason why Mobilink is trying to diversify through link dot net. Therefore, in order to extend cellular network to new cities, towns and highways and to enhance its current installed capacities in existing cities, it should have a strong focus on maintaining high quality of service, which is always a benchmark of Mobilink, thereby increasing usage and exploring new revenue streams on value added services, market visibility through various market initiatives to fulfill subscriber's satisfaction and demand and above all to increase the value of investment for the shareholders.