Developing Telecoms | Flooding slows growth in Pakistan in 2010, but 3G auctions looking likely this year

22 May 2012

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Flooding slows growth in Pakistan in 2010, but 3G auctions looking likely this year

Friday, 15 July 2011 16:00 | James Barton

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Growth in Pakistan’s mobile sector was slow during 2010 compared to previous years, largely due to losses accumulated from the economic crisis as well as the country suffering from one of the worst floods in its history. New forecasts from BMI are based on data published by the Pakistan regulator PTA (Pakistan Telecommunications Authority).

2010’s floods resulted in the loss of infrastructure and electricity, leaving many without services. Some of the worst affected areas are still without service, and while operators are aiming to repair damage caused to their networks, 2011 will likely see similar rates of growth.

In part, this could be due to the PTA’s order that all SIMs be registered by 17th May 2011, which follows a similar piece of legislation aimed at clearing up mobile databases. The market could also be impacted negatively by a crackdown on illegal handsets without IMEI numbers – this is largely targeted at Chinese handsets, which account for 70% of the market.

The terms of the country’s 3G auctions have not yet been established, but it is likely that they will be announced in 2011. Although 3G services have long eluded the country, a commendable degree of cooperation between market leading operator Mobilink and Pakistan Telecommunication Company Limited (PCTL)’s mobile branch Ufone could provide a much-needed push for the introduction of 3G.

At the moment PTCL offers 3G connectivity in the form of wireless broadband services. However, the PTA plans to launch 3G services in Pakistan by end-2011 assuming that its licence auction proposal submitted to the government is approved. Pakistani mobile operators would likely benefit significantly by engaging in 3G infrastructure sharing agreements, which would lower costs and drive adoption of the lucrative data service.

There were a total of 6.178mn fixed lines at the end of 2010, according to the PTA. This represented a year-on-year increase of 1.92% compared to a loss of 0.2% in the previous year. While the trend overall is a decline resulting from fixed to mobile substitution, the slight increase experienced in 2010 is the result of an improved performance by Telecard. However, in the long term fixed lines are expected to fall considering the continued dominance of PTCL, continued underinvestment in the fixed-line sector and cheaper mobile services.

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