TELECOM MAINTAINS GROWTH MOMENTUM

SHAMIM RIZVI
(feedback@pgeconomist.com)

Feb 6 - 12, 20
12

While there is worrisome decline in almost all the sectors of the economy, telecom sector is one of the fortunate one, which has maintained its growth momentum.

This sector has made its highest ever contribution to the national exchequer in the year 2011 as around Rs117 billion was contributed to the kitty by the telecom companies showing an increase of Rs9 billion as compared to previous year.

The teledensity of the country touched 68.39 percent in the financial 2010-11 reflecting a hike of 6.7 percent over the previous year as reported by Pakistan Telecommunication Authority (PTA) in its annual repot released last month.

Collection of general sales tax and federal excise duty from the sector picked up by 20 percent. The total telecom revenues swelled to an all time high figure of Rs362 billion during the year.

Cellular, which constitutes major chunk of telecom revenues, rose by 11 percent to Rs262 billion from Rs236 billion.

Fresh investment of about $500 million was made in the sector. The imports climbed to $766 million from $725 million. The import of mobile handsets shot up by about 30 percent to $218 million. Telecom sector has more than 93 percent share in total GST/FED collection from services sector.

Apart from GST/FED, activation tax collections rose from Rs6.6 billion in FY2010 to Rs7.2 billion in 2011.

In proportion to the teledensity, cellular sector has the highest share in telecom revenues. Other services except wireless local loop reported a decline in their revenues during this period.

According to the report, an amount of Rs627 billion has been deposited in the national exchequer during the past six years. During the past three years, PTA collected around Rs40 billion against access promotion contribution (APC) for universal services fund (USF).

In its drive to curb grey traffic, the authority saved revenue of $26 million, claimed the PTA report.

After getting relief in regulatory duty on imports of cellular mobile handsets, imports grew to $218 million in FY2011 from $169 million in the previous year. The import of telecommunication apparatus, which include machinery and fixed wireless terminals, fell to $548 million from $556 in the previous year.

Describing the increase in teledensity as significant, the PTA annual report revealed that the number of mobile subscribers at the close of the financial 2010-11 stood at 108.9 million showing a growth rate of 10 percent - almost double than that of last year.

Mobile penetration rose 65.4 of population than that of 60.4 percent in the previous year. During the year under review, the cellular operators added 9.7 million new subscribers to their network-almost double than last year.

Despite being the smallest operator, CMPak came out as the fastest growing operator in term of net addition as this company added over 4.2 million new subscribers to their network in one year. Telenor and Mobilink added 2.9 million and 1.2 million new subscribers to their networks respectively. Yet their combined net additions fell short of that China Mobile - CMPak. Ufone and Warid trailed behind with nine million and 0.5 million new subscribers respectively.

CMPak showed the highest growth in FY11. However, the Mobilink maintained its position as the leader in subscriber market in Pakistan with its share of 30.7 in the market while Telenor as no. two with 24.5 percent share in the market

The number of broadband users in the country crossed one million mark and recorded 66 percent increase during the year under review. Broadband spread went up from 0.5 percent to 0.89 percent during the year.

According to the report, PTA has chalked out "vision 2020" document that is a peep into future developments in the fast growing sector of telecom and the likely impediments on the way over the next about ten years.

The report envisioned transformation of telecom sector from a support industry to an engine of economic growth. The document may help policy planners for crafting best possible policies in a technology and service oriented environment in which the number of mobile users, broadband subscribers and fixed line customers will cross much higher numbers.