Broadband emerging as the growth engine

Where the entire country is shrouded in a cloud of gloom, positive developments in any sector are a breath of fresh air, such as the recent numbers released by the Pakistan Telecommunication Authority (PTA) for the telecom industry.
Most of the segments showed overall increases, with the total teledensity increasing to 64 percent by the end of FY10, compared to 62 percent at the end of previous fiscal year.
Cellular subscribers crossed the 99 million mark, increasing 5 percent over the year, with cellular density peaking at 60 percent by the end of FY10.
While Mobilink bagged the greatest market share at just over 32 percent with 32.2 million users, Telenor was the swiftest player, showing growth of over 13 percent in subscriptions, and a second place in market share.
The fixed-line segment, however, exhibited a decrease in the number of subscribers and teledensity.
Analysts speculate that a push to increase telecom penetration in rural areas is bound to boost both fixed line and cellular subscriptions in the coming year- FY11.
The real show stealer, however, was the broadband segment. Subscribers more than doubled in the segment reaching 0.9 million.
PTCLs DSL and Wi-Tribes WiMax showed phenomenal performance as far as broadband growth is concerned, with DSL subscribers shooting to nearly 0.5 million, and WiMax subscribers soaring to approximately 0.3 million, an increase of 81 percent and 191 percent respectively.
While talks of consolidation have been abound for sometime, several other developments in the industry have also taken place over the past year, with an MoU signed between mobile operators and the PTA for infrastructure sharing.
The PTA and mobile operators aim to raise the tenancy ratio (number of operators sharing one tower) to 1.5, which is currently 1.02.
3-G services are another aspect that the PTA is envisaging for Pakistans telecom industry. The new technology, expected to be introduced soon in Pakistan, will improve the speed and quality of services in mobile phones, merging PC applications with the functionalities of mobile phones.
And of course, the Universal Service Funds (USF), administered by the PTA, is projected to increase telecom penetration to the underserved areas - another positive move in the industry. Thirty percent of the country lacks fibre-optic infrastructure, but with the help of USF, the whole country is foreseen to be wired by 2011.
The prospects for the telecom sector indeed seem bright.

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Telecom Indicators

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(mn)                                  2009-10    2008-09

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Cellular subscribers                       99         94

Fixed local line subscribers              3.4        3.5

Wireless Local Loop Subscribers           2.7        2.6

Broadband Subscribers by Technology       0.9        0.4

Total teledensity                          64%       62%

Cellular mobile density                    60%       58%

Fixed Local Loop Teledensity                2%        2%

WLL Teledensity                             2%        2%

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Source: PTA