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The mobile network operators in Pakistan have consistently added new customers to their networks, even after the subscription growth rates peaked around 2007 and 2008. Not anymore, apparently!
The latest statistics released by the Pakistan Telecommunication Authority show that registered cellular subscriptions were about 121.9 million as of December end last year, which indicates that the MNOs jointly lost 1.65 million subscribers in the month of December. That reduced the cellular teledensity from an all-time high of 69.8 percent in November to 68.8 percent as of December end.
All the operators saw their tallies go down during December. Ufone dropped 0.5million subscribers during the month, followed by Mobilink which lost 0.45 million subscriptions, Telenor 0.24 million, Zong 0.22 million, and Warid shed 0.21 million subscribers.
Still, the half-yearly subscription acquisition is positive, as MNOs added 1.79 million new subscriptions between July and December. However, at this rate, the YoY growth in FY13 may end up shabby compared to that of previous year when over 11 million subscribers were added (July 2011-June 2012).
The negative month-on-month subscription growth of 1.34 percent in December is most likely due to the regulatory directives issued by the PTA in November and December, which were about new rules for the sales of new Sims as well as taking care of unverified Sims out there in the market.
The November 2012 PTA directive, which banned Sims sales through third-party franchises and retail outlets starting December, essentially sliced up the MNOs retail sales arm. There is still potential for new subscriber acquisitions, for the quantum of unique users in the existing subscription pie is said to be between 70-80 percent, on account of factors like the multiple Sims phenomenon.
Amid limited prospects of new subscriber acquisition, the PTA directive to the MNOs to block the unverified subscriptions likely led to the decline seen in December. PTA issued another directive in December, requiring the MNOs, to install by February 28 this year Biometrics Verification System with NADRAs help for verifying customers identity before selling new subscriptions through any sales channel.
However, there seems no progress on that front, two weeks since the deadline passed. Sources maintain that the high installation cost of biometrics system across the vast retail footprint is not the only worry the operators are nursing right now-there is uncertainty on the regulatory front, too. PTA is yet to issue an elaborate policy regarding these biometrics verification systems, including relevant data privacy guidelines. That could explain the operators reluctance to commit investment in biometrics systems yet.
If the status quo continues, that may lead to the phenomenon of negative subscription growth to become a pattern, rather than a mere aberration, in the ongoing calendar year-until operators install the required infrastructure and restore their full sales muscle in the market. Meanwhile, the future growth or decline in cellular subscriptions is also going to depend on the scale of unverified Sims purged from the system.
Although there is delay in installing the biometrics system, it is encouraging that the operators agree on the need to have a system in place that can assist the law enforcement agencies in ensuring safety of the population. It is recommended that the regulators sit down with the regulatees, address their legitimate concerns, and get this verification system (or a modified one) up and running at the earliest.


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Cellular sector Landscape*
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Rank MNOs Market Net
shares subscribers
(%) (mn)
========================================
1 Mobilink 29.64 36.141
2 Telenor 25.06 30.564
3 Ufone 19.52 23.809
4 Zong 15.34 18.701
5 Warid 10.44 12.731
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Total 121.95
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(*as of December 2012) Data source: PTA
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