Telcos to Lose 50% of Subscriptions after Re-Verifications, ARPUs to Get Doubled

More than 50% SIMs or around 50-55 million subscriptions are going to be cleaned-up once the on-going SIM re-verification drive is completed, told us market experts, officials of cellular companies and high-ups of Pakistan Telecommunication Authority.

While majority of experts and officials admitted that its too early to speculate anything, but they were certain that at least 50% subscriptions will be wiped out after April 14th, 2015.

Sohaib Sheikh, a senior telecom expert, explained that there will be two type of SIM cancellations after the deadline. 1-those SIMs that are not in the possession of verifying customers or such SIMs that legitimate customers don’t use any more, 2-those subscribers who won’t be able to make it to service centres/retailers till April 13th, 2015 for biometric re-verification and their SIMs will get blocked by the system.

Those who, somehow, will not be able to make it to the service centres/retailers will be given a chance (of 180 days) to get their blocked numbers re-opened after bio-metric verification, added Mr. Sheikh.

Decrement in number of SIMs should not be taken as a reduction in telecom customers

According to a an official working with a telecom company, who wanted to remain unnamed, the deadline of three months for re-verification of entire subscription base — that telcos built in a decade and half — itself means that telcos will be pushed a few years back. “I won’t be surprised if telcos lose 50 million or even more subscribers after the deadline”, added the official.

There is no other option for telcos at this point in time, and telcos will have to do it — once and for all, said a PTA high-up.

According to this PTA official, decrement in number of SIMs should not be taken as a reduction in telecom customers as those who are using telecom services won’t just quit them because their SIM got blocked. “Legitimate users will get their SIMs verified, one way or the other”, said the PTA official.

In his opinion, it would be better for the industry to have only legitimate SIMs in their records, the ones that are active, the ones that generate revenue.

If this logic is to be believed, then over-all revenues of telcos might not get a notable hit other than the cost they will have to bear for SIM re-verifications. Or put in other words, Pakistani market after April 14th, 2015 will mean: same number of revenues from almost half of the subscriptions or two times of market ARPU than what we have today.

PR head of a cellular company approved that proposition of doubled ARPUs and half of subscriptions will interest investors more. “Pakistani market will look a lot more lucrative to telecom investors with these new dynamics, especially when more than 2 million individuals are reaching their 18th birthday every year”, he added.

Doubled ARPUs and half of subscriptions will make Pakistan look like a lot more lucrative market

Not to mention, PTA is planning to auction the left-over spectrum (that remained unsold in previous auction) somewhere around late 2016 and these new market stats will become vital for investors to make their decisions for Pakistani market.

Nonetheless, with 50% cut in subscribers, telcos are set to lose stock value and their positions in group standings. We can’t say that 30 million customers and 15 million customers are same for a cellular company, regardless of the fact that revenues in both situations remain the same.

Half customers — with almost same revenues — will also reveal the fact that how Pakistani telcos were elevating sales’ figures for the reports they used to send to their group headquarters. Such shiny reports served as a job security and regular commission for countless people in industry. This will change after April 14th, 2015.

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