Weak leadership and violence could stall Pakistan’s growth
Friday, 30 September 2011 10:34 | James Barton
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, according to BMI. The industry registered a total mobile subscriber base of 106.440mn in March 2011, which was the strongest net addition since June 2008. The gradual recovery from the effects of the global economic downturn and the devastating floods in August 2010 is encouraging, and the Pakistani mobile industry could grow by up to 10% in 2011, up from 8.5% in 2009 and 5.33% in 2010. Subsequently, the market is forecast to grow at an average of 6.5% to bring the total subscriber base to 145.370mn in 2015.
The Pakistani fixed-line sector will likely continue to contract 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 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. 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 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.
Add this page to your favorite Social Bookmarking websites
HAVE YOUR SAY
You must sign-in to make a comment.
Related Articles
- Most Popular
- Most Commented
-
- VNL: Solar-power GSM ready to serve remote, rural areas (4)
- All aboard: Astel, SES connect Kazakhstan commuters (4)
- Certified Fibre Optic Training Course, 27th - 30th October 2009 (4)
- Travel banned Robert Mugabe attends ITU World Telecom 2009 (3)
- Bahamas Telecoms loses 80% of its fixed-line income in four years (3)
Newsletter
Sign up for Developing Telecoms FREE monthly e-newsletter and keep up-to-date with all the latest news, analysis and postings on the site.
Why sign up? Click here