Research Analyst, PAGE
Nov 16 - 22, 2009
ZONG is the first international brand of China Mobile Pakistan (CMPak), which is a 100% subsidiary of China Mobile. The pioneering overseas set up of China Mobile came through acquisition of a license from Millicom to operate a GSM network in Pakistan.
So far CMPak has invested more than US$800 million in the telecom sector by the end of year 2008. ZONG has been supported by ground breaking communications, trend setting customer service, and an unmatched product offering which are redefining rules of the game and establishing ZONG as a serious contender for the number one spot in telecom sector.
Zong is providing the best packages in order to compete with all other networks. Zong telecom is for the fist time providing the online number booking services, which are leading the market; every one can check and get the numbers of his choice.
Zong is also providing the cheapest internet service which is 500 rupees every month unlimited but has a costly Edge Stick of RS 10,000. Zong also has late night offer packages like Zong Telecom Latest Late Night Offer from 12 AM to 7 AM Free Calls, Zong Telecom Introduced Calls, and SMS Block Feature.
During Jul-Dec 2008, all operators kept their subscriber base except Mobilink. Zong's increasing popularity in terms of call rates and mobile portability has been the main reason for increasing its subscriber base. Zong in the period of first three months started with the impressive number of over 5 million net additions but in the later half the net addition was slow on monthly basis.
ZONG SUBSCRIBERS IN 2008
MONTH TOTAL Jan 2,355,309 Feb 2,145,315 March 2,142,465 April 3,146,763 May 3,662,099 June 3,950,758 July 4,446,024 Aug 4,803,058 Sep 5,092,476 Oct 5,297,610 Nov 5,398,823 Dec 5,503,274
TELECOM SECTOR IN PAKISTAN
Pakistan's economy passed through one of the difficult years recently after having achieved marvelous economic growth. In relation to the slow economic growth the telecom indicators both financial and others also exhibited slow growth trends. Teledensity in the country reached 58.8% showing a growth rate of 30.6% in 2008.
The telecom sector contribution to national coffer which is mainly in the form of taxes and duties reached Rs. 111.7 billion during 2008. The total tax collection from telecom sector was Rs. 111.7 billion which was almost Rs. 100 billion last year. This rise is mainly because of GST which increased from Rs. 36 billion in 2006-07 to Rs. 44 billion in 2007-08.
Similarly Activation Tax also showed an increase of about 11% this year. Although the volume of General Sales Tax collection grew this year its growth in relation to previous year declined from 18% to 17% during the reported year.
Telecom imports declined marginally and stood at US$1.33 billion, whereas in order to discourage the imported handsets the government imposed duty of Rs. 500 per mobile handset along with regulatory duty of 50%. In 2008, telecom sector had a total of US$ 3.1 billion investments, of which more than US$ 2 billion was made by mobile operators.
The telecom sector has become second to financial sector as major FDI recipient with a sum of US$1.4 billion in 2007-08. Although telecom revenue growth was 18% in 2007-08 as against 21% in 2006-07, the revenues of mobile segment grew from 48% in 2006-07 to 37% in the reported year.
PAKISTAN MOBILE MARKET SHARE (%)
COMPANIES DEC - 07 DEC - 08 Mobilink 39.9 31.7 Ufone 21 21.5 Telenor 19 21.6 Warid 17.2 18.8 Zong 2.6 6.1
In Pakistan, mobile cellular segment remained engine of growth of the telecom sector in particular and the economy in general with its social and economic benefits spreading across the country. Pakistan mobile market has remained one of the fastest growing mobile markets among the emerging markets. The total numbers of over 25 million subscribers were added to the total subscriber base of 62.9 taking it to a total of 88 million at the end of 2007-08.
Today almost 91% of the total population of Pakistan is covered with mobile networks. All operators are expanding their networks and up till 2007-08 almost 9,369 cities/towns/villages have mobile networks by one or all operators. During the reported year, Telenor emerged as fastest growing mobile operator which added almost 7.4 million subscribers to its network in 2007-08. However, Mobilink remained market leader with almost 35% of total market share in terms of subscribers.
CMPak performance remained outstanding wherein it added 2.9 million subscribers in first year of its operations. In 2007-08, revenues of mobile sector grew by 37% and reached to Rs182 billion which were Rs 133 billion in 2006-07. However, the average revenue per user depicted another year of declining growth trend and today the industry ARPU stands at US$ 3.1.
Mobile segment remained one of the major contributors of national exchequer and contributed almost Rs. 82 billion in the form of GST/Activation/Withholding taxes. It is estimated that mobile subscribers in Pakistan would reach 135 million in 2012 with an average growth rate of around 20% to 25%.
ZONG is offering its customers with entertaining & innovative value added services and it empowers them by giving a wide variety of products, services & content to choose.
Zong is coming out as one of the fastest growing operators in the mobile segment, and aggressive are increasing its subscriber base.