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Foreign direct investment in Pakistan’s telecom sector slips 50pc

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LAHORE: The foreign direct investment (FDI) in Pakistan’s telecom sector has fallen by more than 50 per cent this year as compared to the corresponding period, according to the Pakistan Telecommunication Authority’s annual report 2009-10. The report says there has been subsequent decline in the FDI since cellular companies kicked off their operation here in 2005. Starting off with $1,905 million FDI in 2005-06, it declined to $373.6 million in 2009-10. It was $815 million in 2008-09.

Similarly, the total investment declined this year. A sum of $908.8 million had been invested in 2009-10 and during the corresponding period it was $1,229.5 million. However, the cellular revenue continued to increase, as it was Rs89,896 million in 2005- 06 and Rs236,047 million this year.

A total of 540,841 cell phones have been blocked since the launch of the International Mobile Equipment Identity (IMEI) facility in 2006 that was aimed at preventing cell phone theft and snatching. At the end of July 2010, the number of cell phone subscribers reached 100 million. During the year, cellular mobile subscribers’ growth was 5.1 per cent as compared to 7 per cent during the corresponding period.

“The slow growth in the subscriber numbers is attributed to the fact that PTA has implemented the standard active subscriber’s definition in the industry which has forced the operators to adopt data cleaning process,” the report says. The impact of verification of SIMs and falling economic and security conditions also played a role in slow growth in subscriber numbers, it adds.

The PTA report says that cellular operators added a total of 4.8 million subscribers to their networks during 2009-10. “A drop of 24 per cent in net addition is observed since last year. Ufone and Warid, in an attempt to achieve correct active subscriber figures, reported a loss of 455,607 and 955,049 subscribers, respectively during the period. During the period, Mobilink, Telenor and Zong added new subscribers to their networks,” it says.

The report further says the mobile industry has been seeing a drop in average revenue per unit (ARPU) for the last couple of years due to the fact that initially operators are adjusting to amplified fixed investments (rolling out network and predatory pricing). Falling exchange rates also played a role in pushing ARPU downwards. It stood at an average of $2.46 in the last quarter of 2009-10.

The PTA says it has not only provided the blocking facility, it can also unblock the blocked cell phone sets if their owners get these back. “A detailed SOP exists for such unblocking and a total of 31,851 handsets have been unblocked so far.” The total cell sites of five operators till July 2010 were 30,126 in the country – Mobilink had 7,952, Telenor 6,594, Ufone 5,713, Zong 5,448 and Warid 4,419.
Input from Agencies

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