Research Analyst
Aug 9 - 15, 2010

Mobilink is Pakistan's leading cellular and blackberry service provider. With more than 31.6 million subscribers, Mobilink maintains market leadership through cutting-edge, integrated technology, the strongest brands and the largest portfolio of value added services in the industry, a broadband carrier division providing next generation internet technology as well as the country's largest voice and data network with over 8,000 cell sites.

Housing Pakistan's largest distribution and contact centre networks and an unparalleled 6,500 km fiber optic backbone, Mobilink has already invested over $3.3 billion in the country to date and provides uninterrupted countrywide connectivity, unmatched customer services and international roaming in over 140 countries. The company is also the official cellular partner of the Pakistan Cricket Board. As a responsible corporate citizen, Mobilink also offers a range of socially inclusive products and services dedicated to enhance access to information.


Mobilink subscriber base has increased by 11.8 per cent closing at 31.6 million at the end of Q12010. Mobilink EBITDA reached Rs9 billion, representing an increase of 20 per cent over the same period last year (SPLY) and reflecting an EBITDA margin of 38.9 per cent versus 35.8 per cent in Q12009. Mobilink closed the first quarter of 2010 with revenues of Rs23.1 billion showing a YoY increase of 10.5 per cent.

The company's ARPU dropped from $3 to $2.8, however, in local currency ARPU remained Rs239.6 down by 0.4 per cent from Rs240.6 SPLY.


Revenue ($ 000) 261,402 272,257
Revenue (Rs bn) 20.9 23.1
EBITDA($ 000) 93,695 106,029
EBITDA(Rs bn) 7.50 9.00
EBITDA Margin 35.8 % 38.9 %

Mobilink earlier announced plans to invest over $250 million in the country in 2010. This will bring the total investment made by the company in Pakistan to over $3.5 billion which is the largest foreign direct investment by any cellular operator in the country.


Mobilink registered lower net addition in the subscriber's base as compared to telecom in 2009 but the company still enjoys lion's share in the local market with almost 32 per cent of total subscriber's having Mobilink as their chosen operator.


Years of Business 15
Cities 10,000+
Investment $3.3 billion+
Switches 66
Cell Sites 8,000
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


Despite all difficulties the revenues of the telecom industry registered positive growth during the last few quarters. Main reason for this positive growth is attributed to a tax relief provided to the industry in the budget 2009-10 where the tax rate was reduced from 21 to 19.5 per cent. During July- Sep 2009, total industry revenue was reported at Rs81.3 billion while in the second quarter 2009-10 (Oct-Dec-09) the industry revenue reached Rs85.88 billion. During the first half of the fiscal year 2009-10 (July-Dec 09), telecom industry earned Rs167.2 billion revenues compared to Rs161.8 billion in previous half. Cellular mobile sector share in total revenue comes out about 68 per cent which has shown a positive growth in revenue generation in the six months of the fiscal year 2009-10 where it registered growth of about five per cent during the period. Fixed line sector grew about 0.5 per cent during the first half of fiscal year 2009-10.

During the first six months of the fiscal year 2009-10, telecom sector contributed about Rs48.6 billion in national kitty through these taxes of which major share comes from GST revenues where sector deposited over Rs21.44 billion during the period. Major decline in tax revenues has been observed in activation tax which is imposed at the rate 250 per new connection. In this head companies deposited over Rs3.8 billion compared to Rs14.2 billion in last full year. This decline is understandable because of the market maturity. PTA collections are quite comfortable where it collected over Rs4.91 billion in the first half of the fiscal year.


In the year 2008-09, GoP imposed custom duty and regulatory duty at the rate Rs750 per mobile handset to discourage the mobile imports and save foreign exchange. Consequently, the import of mobile handsets declined sharply and very next quarter of the fiscal year 2008-09 (July-Sep 2008), the cellular mobile handsets imports declined to $70.7 million compared to $127.6 million in previous quarter. This trend continued for the next quarter as well where the imports of mobile handsets reached just $12 million in Jan-Mar 2008. However, the imposition of custom duty increased the smuggling of mobile handsets in the country and eventually the country was flooded with smuggled Chinese and handsets of other origins which gave loss to national exchequer.


In order to extend cellular network to new cities, towns and highways in Pakistan, Mobilink should have a strong focus on maintaining high quality of service, 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 of its shareholders.