"Pakistan - Telecoms, Mobile, Broadband and Forecasts" is now available at Fast Market Research

From: Fast Market Research, Inc.
Published: Sun Dec 14 2014

Auction of 3G licences in Pakistan provides a much-needed boost to the country's telecom sector

With mobile operators in Pakistan starting to shift their focus to value-added services, there was much anticipation in the market place when the PTA finally issued 3G licences through an auction process in April 2014. The government had in fact started to assign these licences way back in 2007. But delay after delay had occurred, much of which had not been properly explained by the authorities. When the licences were finally issued there were rapid network rollouts by the four operators that had secured licences at auction. In the meantime, overall mobile subscriber growth was continuing at a healthy rate of around 10% as the total number of subscribers passed 140 million in mid-2014.

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Whilst the regulatory authorities had badly fumbled the task of auctioning the 3G licences, there was much of a positive nature in the Pakistan government's opening up of the telecom market. The progressive implementation of the reform plans over a number of years had triggered a period of strong growth in the local telecom market. Up until recently the energy and growth was predominantly in mobile services; as the mobile market moderates, the focus has shifted to broadband access in its various forms. In the meantime, there has been no significant activity in fixed-line services as originally intended and in fact subscriptions in this sector are in decline.

Earlier on Pakistan's telecom market had struggled with the transition from a regulated state-owned monopoly to a deregulated and competitive environment. The government initially focused on fixed lines setting out ambitious plans to increase fixed-line teledensity. After peaking at around 4% in 2008, fixed penetration had fallen to around 3% coming into 2014. And, at the same time, the majority of these fixed lines were in urban areas. A more balanced distribution would certainly be desirable in the longer term as 70% of Pakistan's population live in rural areas. Some good news in the fixed-line market seemed to come with the arrival of Wireless Local Loop (WLL) services and the licensing of a multitude of WLL operators. This technology helped sustain what the limited fixed-line segment. WLL services constituted around half of the total fixed-line subscriber base by 2012, but this market segment had also started a decline by 2014.

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