Telecom Sector Has Invested $18 Billion in the Last 15 Years

Telecom industry of Pakistan invested a total of $18 billion in Pakistan during 2003-2018, revealed a study of official stats that are regularly released by Pakistan Telecommunication Authority.

PTA indicators further noted that the telecom sector has remained one of the largest to bring net foreign direct investment in the country during the time.

All this was achieved despite the fact that the telecom sector is not given any special attention and has remained one of the most taxed sectors in the country. So much so that government almost forgot (read: missed deadline) to renew telecom licenses of two out of four operators in the country.

PTA numbers show that mobile phone connections grew from 94 million in 2008 to 154 million in 2018. Similarly, the wireless broadband users on 3G/4G grew from zero in 2014 to 66 million in 2018, showing the fruits of the tremendous efforts put in by operators to promote technology in the country.

During the process, they invested billions to expand their networks to new territories and alongside kept upgrading their equipment to keep up with rapidly growing demand for data services.

Mobile phone companies, in their pursuit, to get every Pakistani online, changed the shape of the country by making businesses more instant and productive, simplifying peer to peer communication while elevating the lifestyles of millions of Pakistanis.

Major examples of mobile operators driven connectivity initiatives which have proven to be a game changer are:

• Mobile Agriculture services
• Insurance Services in the health sector.
• Mobile Education services
• Easypaisa/Jazz Cash/Upaisa providing mobile financial services.

Estimates suggest that more than 55 million individuals utilize one of the above services in one form or another.

Not to mention, mobile phone services are ultra cheap in Pakistan, thanks to extensive price war with-in the operators. The prices, which are the lowest in the region, have helped increase adoption and average data usage by consumers.

If we talk about numbers, data consumption of Pakistani mobile phone users grew almost 5 times from 260,997 TBs in 2016 to 1,258,843 TBs in 2018.

Today, with around 42,000 cell sites, 88% of the Pakistani population is covered by at least one mobile phone operator.

In addition to providing the connectivity (and the financial benefits that we get through such connectivity), mobile phone companies also directly impact the financial lives of million of Pakistanis economically.

Those directly dependent on telecom sector include telecommunication services distributors, sales channel networks of telcos, vendors, sub-vendors, handset dealers and retailers and a lot more.

These entities create further economic activity in Pakistan and generating employment, which leads to increased consumer spending. Telecom sector has created an estimated 14,000 direct and hundreds of thousands of indirect jobs during the past decade and a half.

Why Not Support the Telecom Sector?

Considering how the numbers are so in favor of the telecom sector, it is incomprehensible why the government gives almost no attention to this lucrative niche. At the very least. the government should appoint a functional Minister for MoIT, so that the support work could at least begin.

There are tons of pending issues at MoIT that it should have taken up to support the growing sector, which has the potential to demonstrate 10X better performance, thanks to the increasing number of data subscribers.

Tax, for instance, is one very critical element that has always kept the telecom sector handicapped. It may be recalled that the telecom sector is taxed more than any other service sector in the country. Reason? Probably someone from past governments set it high and then no one cared enough to revise it downwards.

Taxes on Telecom Sector in Asian Countries

As evident from the graph above, telecom services in Pakistan are the highest taxed services in Asian countries. As per the analysis of GSMA approx. 32% of the total cost related to mobile ownership relates to taxes and fees.

Imagine if the government had been supportive enough, or least had been less discouraging, the telecoms sector could have had even greater success and provided higher benefit for the consumers.

We can just hope that PTI will live up to its promise of delivering digital Pakistan by addressing the issues and challenges of the telecom sector.

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