PTAs annual report for FY10 has only confirmed the saturated status of the cellular industry of Pakistan. Mobile density growth rate, that had previously witnessed triple and double-digit gain since its arrival till FY08, has now slowed to single digit falling to 4 percent in FY10.
Credit for much of the industrys past growth goes to the price wars amongst operators that struggled to snatch the maximum market share. This can be gauged from the fact that cellular mobile tariff rate fell to Re1/minute in 2008 from Rs6.25 at the start of the decade.
However, things seem to have changed of late. Realising the fact that there is not much room available for further subscription growth, and that tariffs have fallen sharply in the past few years, market share retention and revenue preservation have now become the prime area of concern for mobile operators.
This is evident from the fact that in the past two years, the cellular industry managed to keep tariffs constant at Re1 per minute. This helped stabilize the Average Revenue per User, which reached at an average of $2.46 during the last quarter of FY10, compared to the average $2.5 during the last fiscal year.
"It is satisfactory to note that the cellular mobile operators did not indulge in price war which was witnessed during the previous financial year," says the PTA Annual Report 2009-10.
This time around, the operators took a more innovative approach to attract mobile users, by offering attractive prizes, cash awards, SMS, call packages etc. Moreover, to retain customers, they have been luring subscribers to re-activate their sims by offering incentives in the form of free air time, hefty prizes etc.
As a result, market share of operators in FY10 remained quite close to last years levels. However, Mobilink and Telenor remained the most popular as their market shares jumped by 1.62 and 1.75 percentage points, respectively. While on the revenue front, the cellular industry managed to increase the revenue to Rs236 billion in FY10 from Rs212 billion in the previous year.
Moreover, to protect the revenue growth rate from falling, the industry has been eyeing products and services beyond merely voice-based ones. At present, the industrys prime focus is to get into the m-banking segment. With Telenor already into this business, few other mobile operators are currently undergoing negotiations with various banks to enter the mobile banking segment.