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BR Research

On boosting broadband uptake

Published Updated

Nearly four years since its launch, mobile broadband continues to make waves. Contrary to expectations of a slowdown this fiscal, the subscriptions continue to show healthy growth. But the market gap is still significant. The current government has done its bit, launching 3G and 4G; now it’s up to the next elected government to take steps to expand access of high-speed broadband to areas that still remain un-served

As per the latest data from the Pakistan Telecommunications Authority (PTA), mobile broadband subscriptions (both 3G and 4G) had reached 53.24 million as of March end 2018. That’s an increase of 11 million – or 27 percent – since June end 2017. Telco’s are adding over 1 million mobile broadband subscribers every month, something that is pretty much in line with the past three fiscal years.

Yet, the slowdown in 3G subscriptions growth is concerning. More than half of the overall Jul-Mar mobile broadband additions have come in the 4G segment, whose total subscriptions totaled 12 million as of March end. Clearly, the 4G segment is ascendant, more than doubling its subscription tally since June 2017. As for the 3G segment, subscriptions were up 4.8 million in the nine months to reach 41.3 million.

As the graph shows, bulk of Pakistan’s broadband market is largely represented by mobile broadband. That is so because of the operational difficulties PTCL and its smaller rivals face in extending the footprint of fixed broadband (DSL) into the nook and corner of the country. Arguably, mobile broadband has a better chance to cut through the operational constraints and make it to the rural faster.

But a lot of work needs to be done still. Almost four years since the 3G/4G auction, the density of mobile broadband in the adult population stands at 42 percent. (As per a World Bank estimate latest for 2017, there were 125.8 million individuals with age 15+ in Pakistan). Due to multiple-sim phenomenon in this market, the mobile broadband density would be lower, at or around one-third of the adult population.

To boost broadband uptake further, it is the 3G network that needs to be expanded in under-served and un-served areas. The 4G segment, though growing aggressively at the moment, is still a niche segment; its rollout is exclusive and dependent on higher commercial considerations.

The four market players need to be incentivized for a greater 3G penetration in the coming years. As of now, it seems that in this fiscal too, the telecom sector is headed for a net FDI outflow. The next government will do well to concurrently focus on taking policy measures that enable a universal 3G rollout, to ensure that the fruits of high-speed broadband are shared by all segments of the population.

Copyright Business Recorder, 2018

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