Financial State of Cellular Companies in Pakistan – 2007/08

Financial conditions of cellular companies in Pakistan seems to be unstable as most of cellular companies are operating in loss despite significant increment in their revenues over the time; but these revenues are leveled by increased operating expenses, network expansion and depreciation i local currency.

Operating expanses of cellular companies have increased due to inflation and depreciation of Pakistani currency. This depreciation in currency is effecting cellular companies in two ways, first the cost of machinery and infrastructure gets higher, secondly those companies that depend on foreign loans from sources outside Pakistan bear huge loss due to depreciation of currency.

The remaining fire was fanned by increased taxes and ongoing price war in the industry. Despite all these, increase in revenues has comforted companies to some extent, but still they will have to go a long way to become profitable.

Revenues generated by cellular companies increased by 35 % compared to 48 % last year. Telenor has outperformed all other companies in terms of revenue generation, which has increased its revenues by 97 percent in 2007/08 compared to last year. Telenor reported total of Rs. 45 billion revenues this year.

Total Revenues By Cellular Companies (Rs. Millions)

Company

2004-05

2005-06

2006-07

2007-08

Mobilink

34,456

54,065

64,654

79,936

Ufone

8,599

16,098

21,867

27,455.2

CM Pak

2,400

3,329

2,897

25,85.3

InstaPhone

2,693

1,539

472

259.7

Telenor

565

6,338

22,837

45,081.2

Warid Telecom

168

8,527

20,405

26,804.7

Total

48,881

89,896

133,132

182,080.9

Mobilink earned about Rs. 80 billion revenues, which is 24 percent higher than of previous year. It is noted that Telenor and Mobilink share 70 percent of total revenues of the undustry, while 29 percent is shared between Ufone and Warid Telecom.

Average Revenue per User

Despite huge additions in customers, ARPU (Average Revenue Per user) has declined by 3 percent from 3.2 US Dollar last year to 3.1 US Dollar this year.

Cellular Mobile ARPU (US$)

Mobilink Ufone CMPak Instaphone Telenor Warid Total
2006-07 3.8 2.8 3.3 2.1 4.0 2.5 3.2
2007-08 3.5 2.1 1.6 0.9 3.9 2.7 3.1

Investment

During 2007-08 Cellular companies invested over US 2.3 billion dollar, which is 12 percent lower than the previous year. Mobilink topped the chart with 919 million dollars invested, while Telenor invested around US 565 Million dollars.

Source: PTA’s Annual Report – Stats are as of July 2008

Tech reporter with over 10 years of experience, founder of ProPakistani.PK


  • shoby

    I am afraid soon they will start puting their losses on their users. Coz at the end all losses and financial hits are beared by common man. On one end all celular companies cuting down their call rats and on the other hand they are applying many taxes and other charges like call charge for customer services. this is the most stupid thing if you call to a call center for customer services and they charge you…. simply B/S………..

  • Sajid

    This is how ufone leads by less investments done and reason is usage of ptcl assets as part of ufone.
    well international groups especially like telenor intentionally go into losses by doing so much investments and reason is they get relief over losses in tax for the parent companies.. thats why warid is entering into so many subsidries… so is china mobile and so is mobilink.. but orascom’s main earning is through mobilink..

    mobilink is in danger if it maintain itself like this.