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Telecom Investments In Pakistan Are Decreasing Since 2013

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Pakistan’s Telecom sector is quite competitive and one of the fastest growing sector in terms of profitability and technology along with FMCG, Consumer goods, Chemicals and Petroleum, total telecom revenues were record all-time high in 2009-10 with estimated $355.6 billion according to PTA figures.

FMCG is another one of the top growing business sectors in Pakistan with whopping annual rate of 15%, FMCG market was estimated $450 billion in 2016. Telecom sector according to PTA is expected to grow further with the advancement of technology and market penetration.

But the investments in Telecom sector seems daunting for the last few years, on one hand market penetration is increasing with more and more mobile and internet users, investments on the other hand are not correlating with the figures. In 2017, Pakistan’s cellular subscribers have reached gigantic figure of 140,516,259 all-time high since the beginning.

But the investments in Telecom sector have decreased dramatically since 2013, during 2013-14 period total investments in Telecom sector were recorded to an estimated $1815.6 million gone down to $1001.0 in 2014-15 even plunged to $719.7 million in 2015-16.

This significant decrease in investments indicates, that telecom sector has done enough; they have already made significant investments to build the infrastructure and basic services mechanism, and now they are harvesting what they have planted already. But the real reason for fewer investments is the reluctance of some companies to invest.

As a comparison, in the UK and UAE, all the telecom service providers equally provide services, for instance; Vodafone, Three, O2, Virgin and T-Mobile all of them provide 4G services because they all are investing time to time and competing well with each other.

In Pakistan, Zong and Warid initially started 4G services, Telenor later on started 4G services but Mobilink Jazz the largest cellular network in Pakistan didn’t even started officially licensed services, until today. However, after it bought Warid it could be said that they are providing 4G services to their consumers.

Mobilink has just acquired 4G license for $324.5 million from the government 3 days ago on Friday. But Ufone seems apathetic in paying hefty license fees and start building their data user base.

Now the technology is moving towards 5G services, US AT&T has already started testing 5G services and allocated $1.25 billion for 5G technology. Despite the announcement by ministry of information and technology that, Pakistan will be the first in South Asia to test 5G services, there is no significant improvement towards strengthening the infrastructure and pouring more in investments. Stubborn behavior by telecom companies would slow down the provision of digital Pakistan.