Telcom Sector Revenues Dip Deeper During 2015-16

Revenues of telecom sector during July 2015 to March 2016 are estimated at Rs 333.2 billion, revealed the Economic Survey (2015-2016) released on Thursday.

Revenues for 12 months during July 2014 to June 2015 were recorded at Rs. 449.6 billion.

Survey said that decline in revenues could be due to loss of millions of cellular subscribers after Biometric Verification System (BVS) re-verification process and intense competition and low tariffs.

Economic Survey of Pakistan said decline in telecom revenues is in line with the international trend of profitability and revenues in telecom industry.

However, the report said that Pakistan’s telecom industry can improve its revenue generation by expanding their value added services and entering into new avenues of growth such as branchless / mobile financial services and other ICT enabled services in collaboration with other service providers in the economy.

Telecom_Revenues

Report didn’t say anything on the impact of increased government taxes on telecom sector.

Telecom’s Contribution to National Exchequer

According to the Survey, during the first three quarters of FY 2016, telecom sector has contributed an estimated Rs. 105.9 billion in the national exchequer in terms of regulatory duties and taxes.

PTA and the telecom industry believes that rationalization of taxes on telecom sector can result into better sector growth and consequently better collections for the government in the long run.

Taxes_Telecom

Telecom companies collected a total of Rs. 31.24 billion under the head of GST during 9 months of July 2015 to March 2016, almost 10% lower than Rs. 45.77 billion collection during 12 months of July-2014 to June 2015.

Investments in Telecom Sector

In terms of overall investment in the telecom sector, the momentum started in fiscal year 2013 for the up-gradation of telecom networks for 3G and 4G services has continued.

Telecom operators have invested a significant amount of $ 589 million during July – March, fiscal year 2016. The main driver behind this investment is the cellular mobile sector which has invested $557.3 million during the first three quarters of FY 2016.

Investments

Number of Subscribers

By the end of March 2016, the total number of mobile subscriptions in Pakistan reached at 131.4 million at the end of March, 2016.

Biometric re verification of SIMs last year had an adverse impact on the cellular subscriber base. However, the industry has survived through the tough period and continues to regain subscribers at a fast pace. It is expected that the rise of mobile broadband will also have a catalytic effect on the SIMs sale.

3G and 4G LTE subscribers have reached at 27.87 million at the end of March 2016 as compared to 13.49 million as of June 2015 which shows that on average, there have been more than one million subscriptions to 3G&4G LTE networks per month. More coverage and reduced tariffs will further increase the uptake of 3G and 4G LTE subscriptions.

Broadband Subscribers

Broadband Subscribers Broadband subscriber base showed strong growth during the July- March, FY2016 period. At the end of March 2016, broadband subscribers stood at 30.99 million as compared to 16.89 million at the end of last fiscal year depicting 83 percent growth over the last nine months.

The number of net subscriber additions in the period stood at 14.10 million.

Most of the broadband subscriber base belongs to mobile broadband, launched in June 2014, which collectively forms almost 90 percent of the total broadband subscribers now.

DSL, WiMAX, EvDO, HFC and FTTH collectively have 3.13 million subscribers at the end of March, 2016. This disparity in subscriber trends highlights the substitution effect of mobile broadband on the other broadband technologies.

In order to further provide impetus to the broadband sector, synergy of various elements is required. Therefore, external factors are also needed to be addressed which include affordability, computer literacy, religious and cultural views regarding objectionable content on internet and lack of local content.

International Incoming Traffic

The total international traffic (incoming + outgoing) stood at 14,545 million minutes during July-Mar FY2016 as compared to 5,643 million minutes during the same period of FY 2015.

incoming_traffic

The growth of 158 percent is an encouraging sign for the LDI segment. Breakdown of traffic shows that international incoming minutes have increased remarkably with a total volume of 13,125 million minutes in three quarters of FY 2016 as compared to 4,169 million minutes in the entire previous fiscal year.

On the other hand, total international outgoing traffic minutes dropped by (3.7 percent) during the July-March 2016 as compared to July-March 2015.

International-Outgoing

The total international outgoing traffic minutes were reported to be 1,424 million during the July-March 2016 as compared to 1,474 million in the same period of previous year, mainly due to the rising trend in using Over-the top (OTT) services for international calls such as Skype, Whatsapp, Viber, Facetime, Line etc.


  • AbdulB1

    Well that’s a good thing because it exposes government inefficiency in running the country by heavily taxing communications.

  • Yasir Ghouri

    Pls compare like to like… when you compare full year revenues like Rs. 449 bn for 2014-15 with Rs. 333 for nine months of 2015-16. the heading seems in appropriate ‘ Telcom Sector Revenues Dip Deeper During 2015-16 ‘. estimated 2015-16 could be around Rs. 444 bn based on 9 months estimate which is not that much lower in comparison to past.

    • aamir7

      Past growth trends, increased customer base, additional revenue streams, this revenue outlook is way weaker than the past.

      • Yasir Ghouri

        i disagree to that. if you see the subscriber base for 3G/4G its positive, full year estimated contribution to the national exchequer would also be higher than last year. International Outgoing minutes would be lower at around 15 % ( full year 2015-16 estimate) compared to last year.

        Pls consider one extra ordinary event i.e bio-metric verification of sims during the year which is one time hit. future outlook seems better. Pls be positive and spread appropriate heading. One can turn negative just after looking at the heading,

        • aamir7

          I can’t do much about spreading the positivity when its not positive.

          BVS was done in 2014-15, not in 15-16.

          Look at GST collection, says a lot about how govt is losing money by imposing more taxes on telecom sector. Same is the case with sector.

          • Yasir Ghouri

            well the BVS impact on revenues and national exchequer was the major hit in 2014-15 and 2015-16.

  • ahmed

    Wrong analysis, not like for like analyst need refresher courses.

    • aamir7

      Bahi jaan yeh analysis nahi hay, its fact based report.

      • College

        To find fact divide last column in all charts with 9 and all others with 12

        and then present again the facts / charts

        Will you ?

  • saima

    Revenue was high because new licences were given, a lot of investment came in as a result and taxes were paid accordingly. due to new licences it was an exceptional year for surge in telecommunication revenues.

  • saima

    Alos spectrum auction is in June and the that amount will also get added in this year revenue. The surge in 2014- 2015 was 900 times from previous 3 years that ended in 2012-2013. This depicts that Ministry if IT and Anusha Rehman are taking IT sector development seriously

    • aamir7

      Saima, are you sure about what you are saying?

      • College

        Eid is also coming and telcos will get revenue boost…. and current year revenue may be equal or surpass the last year.

        So in no way “Telcom Sector Revenues Dip Deeper During 2015-16”

        Why are you portraying gloomy picture ?

      • saima

        yes i am sure u can contact ministry of IT for fresh statictics

  • mediadiv

    Revenue was high because of 3G,4G licenses given by Ministry of IT. Not only it added in the revenue but also this facility came in to Pakistan as Pakistan gave way these licences even after Afghanistan. good work by Anusha Rehman

    • College

      Revenue this year will be around 425-450 billion …….the article is totally misleading

  • mediadiv

    If all departments work like ministry of IT than there is no doubt that Pakistan can be in top economies of the world. Anusha Rehman is running ministry very well