Cellular Sector of Pakistan: Overview

Pakistan Telecommunication has published its quarterly report for Oct-Dec 2010. Derived from the report, we are presenting here an overview of cellular sector of Pakistan.

Note: All stats and figures are till December 31, 2010 – however, few stats as mentioned explicitly are till January 31, 2011.

Introduction:

Cellular industry of Pakistan has matured into a competitive and progressive market which requires new ventures to be explored by cellular operators and ultimately delivered to end users.

From a mere 5 million cellular subscribers in 2004, cellular subscribers jumped to 100 million in 2010. Voice has been the focus of cellular operators since the inception of cellular mobile services in Pakistan but now the focus is shifting towards utilizing the huge potential lying in data and value added services (non-voice).

Pakistan’s cellular sector is best known for low-cost mobile connection charges, reduced tariffs, almost complete coverage area and better mobile services for the general public throughout the country.

As of Today, cellular teledensity has reached 62.5% from just 3.3% in 2004 while almost 92% of the land area and more than 10,000 cities/towns/villages are under the umbrella of by cellular services.

From only 2000 cell sites to 30,417 in just six years, cellular services have reached to every nook and corner of the country. However, there still exist challenges for the regulator and industry alike such as quality of service, heavy taxation, lack of local content on mobile phones and economic slowdown.

Cellular Penetration 

Cellular penetration in the country has reached 62.5% at the end of January 2011 which means that every 6 out of 10 people in Pakistan owns  a mobile connection. cellular penetration had a topsy-turvy trend in the recent past due to continuous data cleaning process by the operators and blockage of un-registered SIMs by the operator.

cellular_penetration

Subscribers Mix

According to statistics made available by telecom operators, there were 104 million cellular subscribers in Pakistan at the end of January, 2011 as compared to 99.2 million at the end of June, 2010 showing a net increase of 4.8 million subscribers over the last seven months.

Almost all of the cellular mobile operators have contributed in this subscriber addition and managed to maintain positive growth trend during the last two quarters.

Mobilink reached 32.1 million subscribers followed by Telenor with 25.1 million cellular subscribers. Ufone performed well during the last four quarters and managed to increase its subscriber base to 20.4 million whereas Warid has 17.6 million subscribers and Zong holds 8.9 million figure till January, 2011.

cellular_subscribers_january_2011

Cellular Market Share

Cellular market is moving towards maturity, stability and intense competition as operators are dedicating their best efforts to achieve a higher stake in the overall market share. Over the last calendar year, cellular market share has not altered significantly.

Mobilink still leads the pack with 31% market share while Telenor stands at 24%. Ufone increased its market share to 20% and Warid has 17% stake in the overall subscriber base. Zong has improved its market share and reached at 8% at the end of December, 2010.

cellular_market_share

Cellular Revenues

Cellular revenues stood at Rs. 126.5 billion during the first two quarters (Jul-Dec 10) of FY 2010-11  as compared to Rs. 122.6 billion for the last two quarters of FY 2009-10.

Quarter-wise analysis of the revenues as shown in figure below reveals that revenues have been on the rise since the start of year 2010, however, there was a dip in the quarter of Jul-Sep 2010 due to huge loss in revenue reported by Mobilink and Telenor.

Mobilink being the SMP has the highest stake in overall revenue of the mobile cellular market. Its revenue during the last four quarters stood highest followed by Telenor. Ufone has steadily grown its revenues sitting at the third spot. Warid lies at the fourth spot while Zong is catching up.

cellular_revenues

Cell Sites

The hallmark of the success of any service pertains to its geographical presence and coverage in a country. In case of Pakistan from hills to plains, east to west, urban to rural, cellular services have reached every nook and corner of the country.

All cellular mobile operators have collectively erected 30,169 cell sites by the end of December, 2010 as compared to 30,126 by the end of June, 2010.

Since major cities and towns have already been covered by the cellular services, therefore, the focus of cellular operators has shifted towards unexplored areas where tough physical conditions take longer than usual to install base towers. 

cell_sites_december_2011

share_of_cell_sites

Above given table shows an interesting comparison of the cellular operator market share and their respective share in cell sites. Among the cellular operators, Mobilink has the highest number of cell sites i.e. 7,952 and 26% share in overall cell sites.

However, if compared with its market share of 31% and no net additions throughout the year, it is probable that focus of the company is more towards increasing its subscriber base rather than expand its existing infrastructure.

Similar is the case with Telenor, Ufone and Warid who lag behind in infrastructure share as compared to their respective market shares.

Zong is the only cellular operator which has a significantly higher infrastructure share rather than its market share. Despite being the smallest operator, Zong has focused more towards raising the network realizing the potential for future growth in the market.  

Average Revenue Per User (ARPU)

Average Revenue Per User (ARPU) is one of the key indicators to the financial status of telecom market in any country. Pakistan’s cellular companies had to face a tough time by the end of last year due to amplified fixed investments and global recession. However, the cellular industry has bounced back from this temporary shaky period and industry ARPUs are on the rise ever since.

The industry reached a collective ARPU of US$ 2.48 by the end of FY 2009-10 and currently, it stands at US $2.53 as of December, 2010.

With the upcoming 3G licensing, it is expected that rise in ARPU will sustain for a longer period of time as cellular operators owe to find new revenue streams via data services and Value added services.

cellular_arpu

International Traffic

Cellular international traffic of Pakistan reached a record high with 3.4 billion minutes recorded in the first two quarters (Jul-Dec 10) of FY 2010-11, compared with 2.8 billion minutes during last two quarters (Jan-Jun 2010) of FY 2009-10.

This shows that cellular traffic has increased by 22% thereby establishing the fact that mobile usage is increasingly becoming the preferred medium of communication for inbound and outbound calls to Pakistan.

Total outgoing traffic trend as depicted by figure  reveals the steadily growing trend of making calls from Pakistan to other destinations around the world as 0. 96 billion international outgoing minutes have been recorded during the first two quarters (Jul-Dec 10) of FY 2010-11 as compared to 0.93 billion minutes in the last two quarters of FY 2009-10 (Jan-Jun10).

Similarly, international incoming traffic has also been growing continuously for the last two quarters and reached 2.5 billion minutes as compared to 1.9 billion minutes during previous two quarters (Jan-Jun 10).

The increase in traffic is attributed to the low international tariffs and bundled international packages being offered by cellular mobile companies.

cellular_international_traffic

Short Messaging Service (SMS)

Short Messaging Service (SMS) is one of the important features of cellular mobile services and a vital source of revenue for cellular companies.  Figure below shows a steadily growing trend of SMS over the last five quarters.

All cellular companies generated approximately 100 billion SMS during Jul-Dec 10 as compared to 86 billion during the preceding two quarters. This shows a 16% increase in the SMS traffic in just two quarters.

Ufone leads the SMS traffic parameters by a clear margin followed by Telenor and Mobilink. Warid and Zong have significantly low SMS traffic as compared to their competitors.

This huge rise in the SMS traffic owes largely to the attractive and wide range of bundle packages being offered by all the operators. Daily, weekly, fortnightly, monthly even unlimited packages are being offered at very low rates by cellular companies to cap the true potential of this value added service.
SMS_cellular_Operator

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


  • Quite informative article, delivers a lot of unheard ‘info-bytes’ to consumers.
    Still missing is GPRS usage and speed comparision between all cellular networks but anyways, its nice.

    Dear Author/Admin, can you please submit an article regarding Internet service providers in Pakistan i.e. wi-tribe, qubee, PTCL etc their speed, tariffs and other major differences. This will help people a lot to choose an affordable but good in quality service provider.

    Regards,
    wePakistan.com

  • Rizwan Rajput

    Wah jeee wahhh mera mobilink tu chah gya hai sab mei :D

  • Ansari

    LOLzz @ the ARPU!! Shows how pathetic this market is in terms of revenue for the companies. Second thing in the report is the reference to teh 3G licensing “Coming Soon” bit, I have said this before and I say it again, this is NOT happening.

    All PTA is looking to do is to get a quick 1.5 billion by selling 5 licenses for 300 mil dollars each but there is no revenue or ARPU growth in it contarary to what PTA has written in this report! Only a handful of customers have 3G enabled handsets which constitute less than 5% of the whole cellular subscriber base, so the Return of Investment just doesnt add up for any operator!!

    • admin

      ARPU is almost double the size of what is mentioned above.

      How: Subtract the inactive, churned and un-registered SIMs

      • Ansari

        Yes I know! Average ARPU’s are around $4 or slightly above but still that is shi**y revenue man!! Countries as close as Malaysia, Thailand, Singapore, Honk Kong(if u wanna call it a country), Japan have average ARPU’s of $25 or more while the global average is $21. Malaysian operators have APRU’s over $50…..

        Asia pacific is still an area which is not 100% penetrated so ideally it should be the most productive. If we look at India, it has an average ARPU of $8 which fell from around $14 after the induction of new players and 3G implemetation costs. So even by those standards Pakistan has the worst ROI for cellular companies!!

        Pakistan has the worst price regulation when it comes to cellular service and the cheapest rates you can find, yet all you see is people complaining :)

  • Ejaz Latif

    very informative article.now pta should do more on gprs/edge and cell tower loction on google map.

  • Usman salam
  • Usman salam

    some body copy this article from propakistani.pk or propakistani copy this form other site?

    • Sarwat_malik

      Many blogs often quote articles written in propakistani. and its not copy pasting.

  • That is quit interesting telecom sector is growing day by day and spot the economy of country.

  • Uzair Shamsi

    Most of fact n figures are outdated but im sure there is no signifcant change in whos owning the market share right now

  • Kono

    Please remove these s*** ads infront of pix this is irritating a lot of readers ..dont make money by iritating ur readers .kindly kono

  • Only 143 new cell sites increased, did we covered all Pakistan ?

    regards,
    mahaan.net

  • Hello Guys,
    Can anyone please get the churn rate figures of mobile phone sector,I am doing research and it would be really helpful if someone could post them

    Regards,
    Aamir

  • andypenn

    cool really

  • Irfan Rana

    thnxs for that……