SWOT Analysis of Cellular Mobile Services Sector of Pakistan

Abstract

After the deregulation policy in telecom sector in the year 2004, PTA issued two new licenses to companies for operations of cellular mobile service in Pakistan. After this intense competition started amongst the companies and each company strived to provide better and better services. The growth during the past two years in cellular mobile has been unprecedented at the rate 150% per annum. Presently, there are six cellular service operators in Pakistan namely Mobilink, Ufone, Paktel, Warid, Telenor and Instaphone. Cellular mobile services in Pakistan were commenced in 1990s when two cellular mobile telephone licenses were awarded to Paktel and Pak Com (Instaphone) for provision of cellular mobile telephony in Pakistan. Cellular subscribers though grew over the years however, due to partial competition; cellular companies could not meet the growing demand in Pakistan. Today all telecom services in Pakistan are open to competition whereby incumbent monopolies will now be competing with telecom giants of the world working in Pakistan. Pakistan, over this period, has remained fastest growing domestic mobile market across Asia. Currently, the mobile sector is undergoing intense competition among the six mobile operators. Operators have launched services like GPRS/EDGE, MMS, BlackBerry corporate mobile email solution, mobile banking, ring back tones and several other content based options available elsewhere. Mobile sector alone contributed 65% of the total tax contribution by the telecom sector. It is noteworthy that Mobilink is providing only mobile services, whereas PTCL is providing wide range of telecom services to the users and also maintaining the telecom backbone of the country and even then Mobilink’s revenues match up with PTCL. Last year, total investments made in the mobile sector were US$ 1,327 million. Unprecedented growth in mobile sector due to government policies has resulted in largest pool of foreign direct investment, increase in employment in telecom and resulting increase in overall socio-economic well being of the country. The mobile cellular sector of Pakistan is contributing annually 2% to the GDP of Pakistan. The FDI in the country through mobile cellular services sector is increasing day by day as the companies are expanding their operations. The revenues of mobile cellular services sector grew by 80% in the year 2005-06. The cellular telecom sector of Pakistan is paying 30% of its revenues in taxes which is the highest tax rate paid by the telecom sector within the South Asian region. Initiatives have to be taken to develop the post paid cellular subscription within the Pakistani cellular mobile sector. There are good opportunities within the cellular mobile sector of Pakistan. The government of Pakistan in collaboration with PTA should pass such regulations as such to ensure provision of uniform cellular mobile services in each province of the country.