Economic Downturn Can be Taken as an Opportunity in Telecom

Global financial crunch has hit general enterprises as well as telcom operators across the world. Lowering outcomes in balance sheets and layoffs has been making headlines in global and local markets. So the situation is nothing new to anyone but the impression that current recession can go longer than what we were expecting is shaking minds and bringing them together to re-think business strategies.

According to some analysts, Telecom market in Pakistan, especially the cellco’s will remain in-tact for at least two quarters; however, the situation may not be the same for other segments in telecom industry. So ultimately, everyone has to immune with the on-going situation to better plan their future business policies.

In a recent report on-aired by Bloomberg TV, in which Research Manager at IDC (a global market intelligence and advisory company) has said that Asian-Pacific telecom companies may re-consider their business strategies during the run through ongoing crisis by investing more in order to surpass their competitors.  It said that cash rich telecom companies will try to explore the un-covered areas by expanding networks and by providing mobile broadband access to masses.

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We can expect the same thing happening in Pakistani market, especially due to extra-ordinary situation of capital for different operators. We know that Zong and Telenor is well placed here with in-house capital in hand while Orascom has reportedly shown its reservations over new investments in the region. We will have to consider that some of cellular companies are dependent on bank bonds while financial institutions may not be in a better situation today to lend them such fund injections in near future.

When we talk about areas of investments in Pakistani market, no doubt 3G comes into mind without much hesitation; however, it is still a tactful decision to choose between broadband enabled 3G or the network reach and quality of current services.

In any case, analytics are terming it really wise to invest equally in all segments in parallel in order to not miss any domain of market. Yet, depending on value of cash-in flows, telco’s can better judge their potentials to wisely use their capitals.

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