ABDUL RASHEED AZAD
ISLAMABAD: Cellular phone industry has registered a phenomenal growth from 2000 to 2009, as at present there are 97,579,940 mobile phone users against 306,493 in 2000, according to PTA data. The cellular phone industry has blossomed over the years and the government was collecting billions of rupees in the shape of different taxes imposed on the usage of cell phones.
PTA data revealed that in 2008, 88 million people were using the facility of mobile phones that at the end of 2009 touched 97.5 million. Wireless phone users have reached 2.7 million in 2009, up by 15 percent. Likewise Internet users are also increasing with each passing day. Broadband users increased up by 42 percent to 587,000. Cellular Mobile Density in 2000 was 0.22 and in 2009 and it has reached 59.60, which indicates that about 60 percent of the Pakistani people were using cell phones.
Nonetheless the cellular operators launched various sales campaigns in rural and urban cities, offering various call and SMS packages, which helped the recovery of subscribers. Experts believe that a large number of customers have started using more than one connections of different companies in order to get maximum benefits of offered service packages.
Among five players of the cellular market, an average operator has added 1.26 million connections. However, Telenor was the star performer which in 2008 had total users 18.1 million but at the end of 2009 has over 22.5 million users, PTA data said. The PTA data says by December 2009, Mobilink was leading the market share with 30.8 million subscribers, Telenor’s users are 22.5 million, Ufone’s users stand at 18.5 million Warid over 18.8 million users and Zong’s total users are 6,920,234.
The cellular industry had generated revenue of Rs 278 billion in 2007-08. The previous taxation rate on the cellular services (15 percent) is already one of the highest in the region. Owing to stiff competition among the cellular operators in the country, lower tariff have been introduced to attract maximum subscribers. However, after enhancement of the tax the tariff is no longer low. The substantial increase in the tax has witnessed an adverse impact on the growth pattern of the industry.
The telecom sector, according to the PTA, has attracted more than $5.6 billion foreign investment in the last four years. In 2007-08, $1.4 billion FDI was invested (in the telecom sector) which was about 30 percent of the total FDI in the country. In 2007-08, the telecom sector ranked second after financial sector as major FDI recipient of FDI in Pakistan.
The total revenue of the industry saw a growth from Rs 182.122 billion in the year 2007-2008 to Rs 212.423 billion in the year 2008-2009. Mobilink’s otherwise the largest cellular operator seems to be slowing down. But still because of a large customer base the company is earning revenues. According to the PTA report, Warid seems to be on a sustained momentum and it needs to make its ground stronger.
Ufone’s advertising strategy is also working well as it often is able to break the clutter in a market where advertising means more of the same. According to an estimate, the country has not more than 60 million active subscribers in different cities while the rest of subscribers use double connections.
The free call minutes and SMS packages offered by various cellular phone operators to attract customers for using their non-functional SIMs is an evident strategy to retain active users on the networks. Major players will have to ensure that this investment helps expand the networks, improves quality and encourages diversified use of the services. The companies, however, will have to ensure they maintain profitability as in the longer run this is critical for survival.
Source: Business Recorder
Date:2/5/2010
