FY2011 Starts with Handsome FDI in Telecom sector

The Foreign Direct Investment (FDI) inflows for telecommunication sector stood at USD 15 million in the first month of current fiscal year 2011-12 (July), State Bank of Pakistan (SBP) reported.

The telecom sector’s share for FDI remained second highest after oil and gas sector, which got a total of USD 29.8 million in the month of July 2011-12.

Month of July 2011 showed 14,800 percent growth as compared to mere USD 0.1 million in same month during last fiscal year.

Analysts predicted that FDI in telecom sector is likely to rebound its growth in the coming years the way it recorded huge investment in flow during recent years owing to development and advancement in cellular phone and broadband sectors.

In the 2005-08, the telecom sector attracted US $ 5.086 billion in the country which is considered a boom period of telecom industry as cellular and wireless operators continued to invest huge capital on infrastructure expansion, maintenance and marketing.

In 2005-06 the telecom sector FDI landed recorded US $ 1.905 billion that is the highest share of 54 percent in overall FDI.

Value added services such as 3G and Mobile-Banking will be major areas for telecom operators, banks and content services providers to invest million of dollars to launch latest technology in Pakistan.

The broadband sector has potential to attract million dollars investment in the upcoming months due to massive expansion of their service network and physical infrastructure in the big untapped market.

Moreover FDI may land through various potential sectors including LDI operators, MVNO, class value service providers such as vehicle trackers, satellite and wireless communication services.

The FDI in the telecom sector has fell by 79 percent in the closing financial year of 2010-11. 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.