There was a time when the telecommunication industry was in growth phase, characterised by double-digit subscriber growth, healthy average revenue per user (ARPU) and massive inflows of foreign direct investment. It has, however, been a rather dull affair for the industry since 2008.
Recent statistics shared by the Pakistan Telecommunication Authority (PTA) show mixed trends in various telecom segments. Total teledensity improved to 66.8 percent by February 2011 - a growth of 4.2 percent since June 2010. This has mainly been driven by a 6 percent growth in the number of cellular subscribers in the same period.
Cellular operators achieved the milestone of 100 million subscribers in July 2010. Continuous roll-out of value-added services (VAS) helped operators amass roughly another 5 million new subscribers during eight months ended February 2011. Cellular teledensity improved to 63.2 percent in February 2011.
Zong has clearly been a star performer as it added a whopping 2.5 million new subscribers to its network during the same period. Telenor added 1.59 million new subscribers, Ufone 0.82 million and Warid 0.76 million.
Mobilink is a laggard when it comes to subscriber growth; however, it has the largest subscriber base, reaching 32.5 million in February 2011. Despite losing over 0.4 million subscribers in August 2010, Mobilinks subscriber base grew by 0.9 percent in eight months ended February 2011 due to net additions in later months.
Its getting worse for fixed local loop (FLL) telephony which has already dropped almost 2 million subscribers in the last five years. PTA statistics show that the landline teledensity has now declined to 1.9 percent as of February 2011. Wireless local loop (WLL) segment acquired 127,000 new customers during eight months ended February 2011, increasing the WLL teledensity to 1.7 percent.
Trends in Pakistans telecom landscape are not at odds with those in other countries in the region. Declining landline teledensity and increasing wireless footprint are evident in India, Sri Lanka and Bangladesh too. Despite a slowdown in wireless subscriber growth, Pakistans cellular teledensity is at par with Indias. In absolute terms, however, Indias 750 million strong wireless subscriber base dwarfs Pakistans.
Telecom experts believe that the FLL decline can be reversed by pegging broadband, entertainment and VoIP telephony services with the fixed lines. As for cellular operators, VAS is the answer to declining ARPUs and stagnant subscription growth. Shift from voice to data services is inevitable; therefore, accession to 3G or 4G wireless technologies ought to happen soon.