In Focus: Telecom Sector; cellular users surpass 90mn mark (20112008)

Pakistan’s telecom sector has seen extraordinary performance during the past few years as the teledensity reached around 60.4 percent by October 2008. Recent increase in FED to 21 percent and the existing withholding tax of 10 percent, is however, anticipated to ease off the cellular net additions due to the saturation primarily in the cellular segment where the teledensity has reached its optimum (56.2%) primarily in the urban Pakistan.
FDI in telecom declines
Furthermore, the total FDI for the telecom sector posted a decline to USD71.3mn during Aug 2008 from USD34.7mn when compared to August last year, a rise of 106.5 percent YoY, however a decline of 51.5 percent was witnessed MoM when compared to Jul 2008 depicting some downturn due to the prevailing distressed outlook of the overall economy. FDIs through Telecom contributed only 17.33 percent against 43 percent during Jul’08.
Cellular Segment has witnessed mammoth growth with total teledensity surging at about 60.4 percent. This primarily owes to the cellular wing of the sector with 56.20 percent and total subscribers reaching beyond 90.5mn during October versus 90.2mn in September, a petty rise of 0.36%.
According to the data released by PTA for the month of Oct 2008, Mobilink has consistently remained the market leader with a current market share of 34.11 percent (Sep’08:34.76%) however seeing a surprising decline of over 476k lines, losing its market share. Ufone (20.96%) and Telenor (20.58%) continue to fight for the second position. Ufone stands in second position to Mobilink during the last few months, with over 18.97mn subscribers versus Telenor’s 18.63mn. Warid registered highest net additions of above 254K lines basis during Oct08, while Zong added 205K subscriber (net).
Wireless Local Loop has registered a minor rise as recent PTA numbers provided the subs addition of 55.5K lines to 2.39K registering an increase of 2.44% MoM for the month of Oct 2008. PTCL remains market leader in the segment with its market share of 50.68 percent (Sep’08:50.17%), witnessing a rise in its subscriber numbers. PTCL posted highest net addition in users with over 40.5K lines being added during October.