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Pakistan Telecommunications Report Q4 2011
Business Monitor International, Sep 2011, Pages: 88
Business Monitor International's Pakistan Telecommunications Report provides industry professionals and strategists, corporate analysts, telecommunication associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Pakistan's telecommunications industry.
The Pakistani mobile market has emerged from two years of low growth between 2009 and 2010, which averaged at 1.7%, to mark a quarterly increase of 3.6% y-o-y in terms of subscribers. The industry registered a total mobile subscriber base of 106.440mn in March 2011, which was the strongest net addition since June 2008. BMI are encouraged by this gradual recovery from the effects of the global economic downturn and the devastating floods in August 2010, and BMI foresee the Pakistani mobile industry growing by 10% in 2011, up from 8.5% in 2009 and 5.33% in 2010. Subsequently, BMI expect the market to grow at an average of 6.5% to bring the total subscriber base to 145.370mn in 2015.
Meanwhile, there were slight changes to BMIs expectations for Pakistan’s fixed-line and broadband markets, as well as mobile operators’ ARPU levels in light of new data made available from the regulator and operators. BMI continues to foresee the Pakistani fixed-line sector contracting due to the growing popularity of mobile services, especially if the Pakistan Telecommunication Authority (PTA) successfully auctions 3G licences by end-2011. The increasing preference for mobile technologies is also playing out in the broadband market, where WiMAX and EV-DO continue to report impressive growth momentum, having combined to overtake the number of DSL subscribers. DSL is still the dominant broadband technology, but it is increasingly under threat from up-and-coming alternatives.
Pakistan is one of the few remaining countries in Asia Pacific that has yet to introduce 3G services. The PTA originally planned to auction licences in early 2009 but has repeatedly postponed the plan due to various reasons. The regulator claimed in January 2011 that it hopes to introduce 3G services in Pakistan by end-2011. While BMI are slightly sceptical given the fact that the process has been delayed for two years, the government gave the biggest indication that it intends to fulfil its promise by scheduling a 3G auction in mid-to-late October. Although BMI broadly welcomes the launch of 3G services, mobile ARPU levels remain below US$3, which is a worrying sign. It could take several quarters or years before operators recoup their initial investment in terms of 3G licence fees and network upgrades and expansion.
Pakistan had a telecoms rating score of 51.0 in BMIs latest update for business environment ratings for the Asia Pacific region, which was slightly below the regional average of 55.9. The country excels in terms of industry rewards and industry risks, but it is held back by the country’s overall macroeconomic situation and risks such as corruption and policy continuity. Pakistan is a pivotal country for global security, owing to its large population, Muslim identity, links with Islamist terrorism, adjacency to Afghanistan and its nuclear arsenal. Therefore, international concerns about Pakistan's future are wholly warranted. Although Pakistan returned to democracy in early 2008 after almost a decade of military rule, the country remains wracked by violence, with no end in sight to the conflict. Islamist militant activity, hitherto largely confined to the regions bordering Afghanistan, is spreading to the central parts of Pakistan. If the government fails to curb this militancy, then the coming decade (2011-2020) could be far more turbulent than the last. However, even without Islamist attacks, governance will remain weak, thus constraining economic development.
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