Amid economic slowdown, Telco's revenues are bound to grow little in real terms. But help may come from subscriptions. In that context, the Jul-Jun FY19 period was impressive. As per latest data released by the Pakistan Telecommunications Authority, the four operators had collectively added 11 million subscribers during the year, with the total tally (2G, 3G & 4G) reaching 161 million as of June end 2019.
This 7 percent yearly growth is mostly provided by Jazz, which added 4 million new subscriptions. This was followed by Zong, which grew its base by 3.5 million. In relative terms, Zong did the best among the lot by growing its subscription pie by 12 percent year-on-year. This is succeeded by Ufone, which saw an 11 percent jump in its subscriptions, thus capping a good year for the last-ranked operator.
Turning to data, it was another good year for mobile broadband. The 3G and 4G subscriptions together grew by 23 percent year-on-year to reach almost 69 million in June. Impressively, operators continued to add over a million new subscriptions every month. Jazz and Zong led this field as well, growing their mobile broadband subscriptions by over a third – or five million new subscriptions – during the year.
But look closely and one sees that the industry's 3G segment is on the way down. The 3G subscriptions stood at 37 million in June 2019, down from 41 million in June 2018. Except for Ufone, all operators recorded declines in their 3G base. Despite losing over 1.5 million subs, Jazz still leads 3G with a 36 percent share; but Zong has replaced Telenor for number two spot with 23 percent share.
This 11 percent decline is explained by slowing 3G expansions outside major cities, which now have greater coverage of 4G. The regulator needs to examine whether the 3G network footprint thus far comports with the operators' rollout obligations as per the 2014 spectrum auction.
Coinciding with 3G drawdown is a 4G spike. PTA data show that overall 4G subscriptions had reached 32 million by June 2019, more than double from a year ago. The operators cumulatively added over 17 million new connections. FY19 was the first year when, after Ufone's entry, all operators were offering 4G services. By adding about 7 million subs last year, Jazz had been closing in on the segment leader, Zong.
However, the Chinese telecom major, which introduced 4G in Pakistan, still leads with 39 percent market share. At this pace, 4G will overtake 3G subs in a few months. Clearly, 4G is no more the niche that it used to be; it is fast becoming the user choice due to its superior performance. It's time for 4G to make its presence felt, now that the regulator has already started its tests for the next network upgrade, 5G.