AGL 6.80 Increased By ▲ 0.08 (1.19%)
ANL 9.22 Decreased By ▼ -0.53 (-5.44%)
AVN 74.20 Decreased By ▼ -1.30 (-1.72%)
BOP 5.43 Decreased By ▼ -0.01 (-0.18%)
CNERGY 4.89 Decreased By ▼ -0.06 (-1.21%)
EFERT 78.00 Decreased By ▼ -0.05 (-0.06%)
EPCL 54.70 Decreased By ▼ -0.70 (-1.26%)
FCCL 14.93 Decreased By ▼ -0.37 (-2.42%)
FFL 6.34 Decreased By ▼ -0.14 (-2.16%)
FLYNG 7.12 Decreased By ▼ -0.03 (-0.42%)
GGGL 10.56 Increased By ▲ 0.01 (0.09%)
GGL 16.43 Decreased By ▼ -0.12 (-0.73%)
GTECH 8.21 Decreased By ▼ -0.21 (-2.49%)
HUMNL 6.35 Decreased By ▼ -0.06 (-0.94%)
KEL 2.95 Decreased By ▼ -0.04 (-1.34%)
LOTCHEM 28.60 Decreased By ▼ -0.25 (-0.87%)
MLCF 27.80 Decreased By ▼ -0.50 (-1.77%)
OGDC 75.30 Decreased By ▼ -0.20 (-0.26%)
PAEL 15.80 Increased By ▲ 0.26 (1.67%)
PIBTL 5.60 Increased By ▲ 0.24 (4.48%)
PRL 17.22 Decreased By ▼ -0.10 (-0.58%)
SILK 1.06 Increased By ▲ 0.01 (0.95%)
TELE 10.30 Decreased By ▼ -0.20 (-1.9%)
TPL 8.00 No Change ▼ 0.00 (0%)
TPLP 20.80 No Change ▼ 0.00 (0%)
TREET 22.60 Decreased By ▼ -0.40 (-1.74%)
TRG 128.85 Increased By ▲ 6.15 (5.01%)
UNITY 22.50 Decreased By ▼ -0.08 (-0.35%)
WAVES 12.00 Increased By ▲ 0.70 (6.19%)
WTL 1.13 Decreased By ▼ -0.01 (-0.88%)
BR100 4,100 Decreased By -4 (-0.1%)
BR30 15,533 Increased By 64.6 (0.42%)
KSE100 41,129 Increased By 114.8 (0.28%)
KSE30 15,337 Increased By 24.6 (0.16%)
Follow us

While other operators had abstained from the spectrum auction last week, Ufone came in and participated rather strongly. It is stepping up the ladder by acquiring 9MHz of fresh spectrum at a cost of $279 million (~Rs46 billion). Recall, Ufone had participation in a limited fashion in the 2014 mega spectrum auction; it had later stayed away from smaller spectrum auctions in 2016 and 2017.

The intervening years have worked up the appetite for more spectrum as number of data users has increased over time. The additional spectrum should help in expanding data network, improving quality of service, and acquiring more subscribers. As of July 2021, data from the PTA show that Ufone was holding roughly 23 million cellular subscriptions, with a market share of 12 percent.

More pertinent in current market situation is the number and worth of data customers on an operator’s network. As of July 2021, Ufone had 10.6 million mobile broadband/data (3G and 4G) subscriptions, translating into a 10 percent market share. On an annual basis, during FY21, Ufone data subscribers increased by 13 percent year-on-year, compared to 29 percent yearly growth for Jazz, 25 percent for Telenor and 15 percent for Zong.

The pace of growth needs to be ramped up. The market leader Jazz has taken three years to double its mobile broadband subscriptions to 39 million, whereas Ufone has taken four years to double the subscriptions to 10 million. The comparison of last-ranked player with the top performer may seem unfair, but the market reality favors the operator who will quickly scoop up more and more high-paying data customers.

While costs of utilities and other operating expenses have have gone up significantly in recent years, the telecom sector’s Average Revenue per User (ARPU) has remained around the level of Rs223 per month (data source: PTA) in recent years. Scale matters, and Ufone required more spectrum to grow its user base. On the revenue front, Ufone needs a lift-off while other operators have done better.

As per the PTCL Group’s annual report, the group’s cellular and other wireless revenues (Ufone topline) was recorded at Rs50 billion in CY20, down 9 percent year-on-year from Rs55 billion in CY19. In real terms, there has been a double-digit decline, as CY20 topline was at the same level as it was in CY17. During 1HCY21, Ufone revenue went up to nearly Rs26 billion, a growth of 5 percent year-on-year.

It remains to be seen what kind of strategy Ufone management will employ to make the most use of its new spectrum. Will they go mostly for large-scale expansion of 4G network to cover more cities (and rural areas)? Or will they focus more on existing 4G deployments to offer better data speeds and call quality? Growth in ARPU is critical to turn around the bottom line, as cost-cutting measures have limits.

A sound business turnaround strategy may also need to focus on innovative marketing to win over customers. It wasn’t that long ago when Ufone used to grab public’s attention with catchy and amusing television and radio advertisements. Now the mediums of outreach have changed with the spread of social media and digital marketing, and there is a lot of clutter to navigate and reach the target audience.

It will take some time for the results to come through, but Ufone’s large spectrum purchase soon after the appointment of the new Group President and CEO has put its competition on notice. There have been suggestions in the past that Pakistan’s telecom market is more suitable for a three-player field. But this latest development indicates that Ufone is up for a fight, as other operators wait and watch.


Comments are closed.

Javid Sep 18, 2021 05:42am
Pta didn't find malwares spyware virus that have been generating bby ufo ne
thumb_up Recommended (0)
Javid Sep 18, 2021 05:43am
Malware and spyware viruses being generating by Ufone pta should look into the matted
thumb_up Recommended (0)
AD Malik Sep 18, 2021 07:04am
Ufone has strong base of infrastructure and capacity
thumb_up Recommended (0)