ENERGY SHORTAGES: IMPACT ON ELECTRONIC INDUSTRY

S.KAMAL HAYDER KAZMI
(feedback@pgeconomist.com)
Research Analyst, PAGE
Sep 3 - 9, 20
12

Pakistan is facing one of the worst energy crises. The government has somehow managed to give out more energy than what is actually being produced. This has resulted in severe loadshedding across the country. It is unfortunate to see that the government is still allowing the allocation of free electricity units to government employees. WAPDA, NEPRA and many other government employees get free electricity units every month. Presently, in the country the electronic industry also faces many challenges due to energy shortages. Electronic markets shopkeepers and people have been continuing the protest against power shortages. They blocked main arteries of the country, causing traffic jam. The protesters burn tyres and pack material of electronic goods. In the country shops remain close for several hours. The protesters raise slogans against the power crisis saying their business activities are paralyzed due to load shedding. Nobody was giving them proper attention for the solution of sufferings faced by electronic shopkeepers and people. There is no umbrella or controlling body over power sector, which is now being monitored by the regulator, the NEPRA (National Electric Power Regulatory Authority) that has rotted this vital sector through non-professionalism.

ELECTRONIC MARKET

Pakistan's consumer electronics market is expected to grow by an annualized average of about 13.3 per cent to $3.3 billion by 2016. During 2011, spending on mobile handset imports continued to grow strongly, but demand for high-cost consumer durables such as television sets were affected by inflation and rising interest rates. A weak economy means that market development will depend on action to reduce the inflow of illegally imported television sets and fake brand mobile handsets. However, computers accounted for about 17 per cent of Pakistan's consumer electronics spending in 2011. Pakistan's domestic market computer hardware sales are $334 million in 2012, up 7.1 per cent from $312 million in 2011. This is also forecasted that this segment of the market will grow by an average of about 8 per cent between 2012 and 2016. The audio/visual devices segment accounted for about 36 per cent of Pakistan's consumer electronics spending in 2011. Pakistan's domestic AV device market is projected at $724 million in 2012 and is expected to grow at an average annual rate of about 13 per cent between 2012 and 2016 to a value of almost $1.2 billion in 2016. Television sets remain the core product in this category, but the growing availability of smuggled colour television sets is seen as a market inhibitor. Meanwhile, mobile handset sales are expected to grow at a compound annualized growth rate of 13 per cent to 32 million units in 2016, as mobile subscriber penetration reaches 77 per cent. Revenues growth is expected to be slower due to lower average selling prices of mobile handsets, with most handsets sold at less than $50. Low-cost Chinese handsets have made substantial market inroads, but established brands hope to take back some market share. The awarding of 3G licences, expected later this year, is also expected to boost the high-end segment of the mobile handset market.

ECONOMIC CONTRIBUTION OF ELECTRONIC MEDIA

Investment friendly policies of the government have been conducive to the development of the electronic media industry in the private sector. It is estimated that there has been a cumulative investment of approximately U.S. dollar 2.5 billion in the electronic media industry in Pakistan. New jobs to more than 200,000 people of diversified skills and qualifications have been provided. In addition, over 7 million people have been accommodated through indirect employment. With the current growth rate of more than 7 per cent per annum, it is also estimated that the cumulative investment in the electronic media industry will reach above $ 3.0 billion by the end of the current financial year. This expansion in investment would in turn have a multiplier effect on increasing job opportunities for skilled media personnel and journalists, expanding work of media production houses, advertising agencies and proliferation of the performing arts. During the last decade the country has witnessed a massive spurt in the number of TV channels and FM Radio stations in the private sector which is unmatched in the South Asian region. The unprecedented growth of TV channels, cable TV and FM radio stations has indeed contributed remarkably in raising the standards of public awareness and literacy. The massive growth has taken place in the private sector in the last one decade.

In the country, Pakistan Electronic Media Regulatory Authority (PEMRA) as a statutory body was set up with a view to facilitate through licensing and to regulate the growth of the electronic media in the private sector. PEMRA is mandated for regulating the establishment and operation of all broadcast media that is satellite TV, FM radio and distribution services like cable TV, DTH (Direct to Home), IPTV (Internet Protocol TV), Mobile TV etc. in the country.

PEMRA PERFORMANCE

CATEGORY LICENSES ISSUED IN 2011-12 TOTAL LICENSES ISSUED
Satellite TV Channels 06 89
Landing Rights Permission to TV Channels 10 26
FM Radio licenses 06 157
Cable TV Licenses 600 3,000
Multimedia, Multi Channels Distribution System (MMDS) -- 6
Internet Protocol Television (IPTV) -- 01
Mobile TV license 04 04
Mobile Audio Licenses 02 02