Telecom Operators Reluctant to Invest in Pakistan

The telecom industry that contributed highest in the Foreign Direct Investment (FDI) among all different industries has failed to continue its spending on infrastructure and technology, as telecom operators are reluctant to invest in the country where their returns are constantly squeezing against their increasing operational expenses.

FDI_Telecom

The FDI in the telecom sector has fell by 79 percent in the closing financial year of 2010-11, State Bank of Pakistan (SBP) statistics said.

The overall telecom sector including LDI, cellular, broadband and various class value-added service providers have brought merely US $ 79.1 million FDI in the closing fiscal year 2010-11 as compared with US $ 374 million in the previous fiscal year 2009-10.

The share of telecom sector in overall FDI has contracted to merely 5 percent in the outgoing fiscal year against 17 percent of the share recorded in the last fiscal year.

The FDI level is the lowest since year 2003-04 in the telecom sector as FDI continued to increase till 2009-10. The sector used to be considered highly potential as landing billion dollar investment with host of economic activities.

In 2005-06, the telecom sector brought US $ 1.905 billion in the country with 54 percent share in the overall FDI, SBP figures showed.

An Official said that the cellular sector had invested huge money on the telecom infrastructures over the past couple of years, expanding their network more than 90 percent through out the country.

The FDI volume has witnessed significant cut in the outgoing fiscal year however FDI is still landing in the country on up-gradation of network and introduction of value-added services, he added.

The revenues of the cellular operator declined substantially owing to stiff competition, which made investors reluctant to refrain from investing more capital into Pakistan’s land.

He said the cellular operators’ have adopted extremely cautious approach to invest money on technology and trying to adjust their growing expenses with cost-cutting strategies, another official of the cellular operator said.

They further said the telecom operators have curtailed to send revenues to their headquarter countries whatever they earned in Pakistan and re-investing their earnings on their operations and businesses.


  • zain

    thanks to pakistan army for making this country a hell .they are unable to control 4000 Taliban. results is no one (not even Pakistanis living abroad) want to come to pakistan and invest here

    • Rez`

      Could not say it better, people praise army all the time, which is good, but we should also remember the amount of corruption involved in army. All institutions in Pakistan have collectively messed up country.

    • waqas

      Totally agree with you zain

    • Adeel Ahmad

      There we go again with another Army bashing session… If I’m not wrong, 2005-06 which brought a total of $1.9 billion in FDI was indeed under Army’s rule, no ?

      • waqas

        No that was the time when Telecom was expanding in whole world like india srilanka etc this have to be if some else gov. was ..

        • Saad Durrani

          Dream on dude! The “democratic” governments of 1990s completely ignored IT when India was excelling in it.

          Even today when the world over, there is a growth… how come there is no growth…

          Furthermore, five years ago… Sri Lanka was war-infested country too.

      • Shahid Saleem

        If you’re going to mention things that happened under Army rule, people could bring up another data point: the power outages started under Army rule.

        http://archives.dawn.com/dawnftp/72.249.57.55/dawnftp/2007/06/03/local11.htm
        http://archives.dawn.com/weekly/dmag/archive/070617/dmag3.htm

        Now what do you say? They couldn’t plan ahead for a time when people used more electricity? Or will you just blame “civilians” in Army government?

    • Saad Durrani

      Why blame the Army when the rich can’t handle themselves?

      Btw, it was during the Army rule you got better rates… new telecom investments… CHEAPER INTERNET…

      • Shahid Saleem

        Situation is so bad that I am 100% sure even Army does not want power again. Everything is so messed up and there is no obvious fix.

  • Credit goes to Army and those political parties belonging to Central Government especially PPP .

    Thanks Zaradarii .
    pata nahi aglay saal kia haal hogaa

    • expensive beauty

      acha blog hai apka :P

  • mulk hum say chalta hay aur Army, PPP koi aliens nahi, hamaray he rishtadar bhai behnain hain, hum khud rishwat mehangai fahashi kay zimadar hain aur yeh chezain he tabahi ki zimadar hain.

    PPP say tang ayay pehlay khud he paisay lay ker vote diyay thay, main nay khud dekha 500rs hath main pakartay andar vote daltay aur bahir aa ker fahash raks jo PPP members kerwa rahay thay un per log enjoy kertay.

    Taliban army ya PPP ko control nahi ker rahay wo to ap sab ki zaban per koi na koi charha rehta hai jis per ungli uthani ho, kabi Musharaf, Kabhi taliban, Kabi America, Kabi India aur kabi WAPDA, khud gerayban main jhanko kay subah say shaam khud kitnay theik kaam kertay ho aur un main dosron ya mulk kay mafad kay liyay kitnay hotay hain.

    • farrukh

      kon kheta hai mlk ke halat ache nai, ap zara karahi men saturday ko ghar se nilo to pata chale! kese restaurant men koi seat khale nahi milte, cenima ka ticket lene ja to 1 week tak ke booking already ho chuke hote hai , road par , crolla , city , vitz alto ke nehe k koi car nazar nahi ate ,eid ke time par palon ke tarhan shoping kar rahe hote han . thora bohat masla hai , par hame . demands and complains karne ke adat hogaye hai . or uper se media ka kya khena , wo sirf news banane ke leye har had par kardete han bas.. 3g nahi aya to ary ka fault hai, sms packeg par .20 rs barh gaye to gov nakam hai , kch akal ke nkhun lo , itne himat hai to khud kun nahi larte border par , kun agye nahi ate gov sambhal ne kele , sirf mun chalana bohat aan hai , taxes nahi dene par retur nmen sab kuch chaye .hsh karo khuda ke bando

      • Nasir

        very well said my brov u r just the real sacha kaka…

  • MA

    It’s very unfair to put all issues on the shoulders of Army or Government. Yes, there is a small %age of Government. Could you please share with me what happened with the investment of Oman Tel in World Call, Malaysia Telecom in Multinet and investment in Wateen telecom, wi tribe, PTCL and so many other telecom companies. Basically the interest of the investor in going down due to different issues related to taxation, misuse of investors money and so many other matters. The basic reasons of failure of these businesses are due to mis management and expenses on non productive expenses.

    Government policies and PTA didn’t play positive role as well. We can increase the interest of the investor if PTA plays good role and I am 100% sure they will.

  • Reduction in telecom investments is mainly because all telecom operators are now on the maturity state with all their setups and infra structure readily completed. Now the major cost they have is Operational Cost only and it’s pretty obvious that now is the time for them to earn more, rather than invest more.

  • Stone

    Wonder why we are surprised by this. Investments have stopped because th green field phase of the telcom boom is over. Operators have spread out all over the country, most of the country has coverage, cellular penetration is at 70% approx. This leaves little space for foreign investment.

    Unless the telcos start new businesses within Pakistan like mobile banking or maybe move to 3G, there is no reason for FDI in the telecom sector to increase.

  • Syed Hassan Gillani

    No FDI because every thing is stalled. Pakistani Networks never bother to move to 3G even till now when world is moving to 4G.

    3G could had brought them more revenue. There is no development as they stuck with 2.5G. A decade old technology. All they doing now is fooling customers with there stupid tariffs like 30s bill 10s bill WTF?

    E.g. Look at Mobilink GSM 90s name with there dire EDGE service.

    Looks like they are part of rip off Paksitani bunch of Fuc**rs.