Telenor Pakistan generated over $1,793 million or Rs. 187 billion of GVA (Gross Value Added) for Pakistani economy in 2015.
Overall, through communication and financial services that Telenor Pakistan provides, some $15 billion were contributed to Pakistan’s GDP during 2011 to 2015, a report has claimed.
Telenor International published its “Global Impact Report”, that quantifies group’s socioeconomic impact across all markets where it operates. The report was compiled by KPMG,
Report said that Telenor Pakistan ‘s direct GVA contribution in 2015 for Pakistan’s economy was $482 million. In addition, Telenor Pakistan contributed a further $998 million of indirect GVA and $313 million of induced GVA to the economy through its purchasing from Pakistani suppliers and from the wider economic activity generated through employee spending.
Telenor’s total GVA accounted for 0.7% of Pakistan’s total national GVA in 2015.
Contributing to Employment
In 2015, Telenor directly employed 5,405 staff in Pakistan. This is equivalent to the number of headcount employees in 2015.
- 82.3% of employees were male;
- 17.7% were female; and
- 99.8% were Pakistani nationals.
Telenor Pakistan’s direct employment accounts for 2.3% of total employment in the country’s Information and Communication sector.
In addition, the report estimated that, in 2015, Telenor generated an additional 134,300 indirect jobs in Pakistan through its supply chain and a further 46,600 induced jobs linked to employee spending.
This means that for every job that Telenor generates directly, an additional 33 are created in the wider economy.
The direct GVA generated by each Telenor full-time employee was $89,203 in 2015, six times higher than the national average GVA per full-time employee in Pakistan ($14,22).
Over the last five years, Telenor has invested $782 million in the Pakistani economy, of which $179 million was invested in 2015.
Telenor’s 2015 capital investment focused on continuing the rollout of its 3G network which, by the end of the year, had increased 3G coverage to 55.2% of the population.
Major investments went into one next generation 850MHz spectum license that Telenor bought in August 2016. The spectrum is technology neutral and can be used for 3G and 4G services.
Telenor’s Role in Public Financing
In 2014, Telenor made a direct fiscal contribution of $210 million to the government through taxes and other regulatory payments including licence fees for 3G, frequency fees and numbering fees.
The telecoms sector in Pakistan faces several sector specific taxes which are applied to both Mobile consumers and operators. For instance, Pakistan levies a fixed fee tax levied on the sale of SIM cards. Other general taxes are applied at a higher rate for the telecoms sector including customs duty paid on network equipment and SIM cards and Provincial Sales Tax (PST) levied on voice/SMS, mobile broadband and m-Money usage.
Telenor Pakistan’s direct fiscal contributions in 2014 accounted for 21% of its revenues. As a result of its activities, a further fiscal contribution of $339 million was generated by Telenor in Pakistan in 2015 as a result of:
- The economic activity Telenor generates through spending in the supply chain
- Spending by (direct, indirect and induced) employees; and
- Employees (direct, indirect and induced) paying taxes on their earnings.
The total fiscal contribution generated by Telenor in 2015 of $549 million accounted for approximately 1.4% of total Pakistani government tax revenues.
Enabling the Wider Economy
As well as the contributions made directly through Telenor Pakistan’s operations, company makes a wider indirect contribution through its provision of mobile communication services.
Report said that these communication services — provided by Telenor — can drive economic growth through greater digital and financial inclusion and raise entrepreneurial activity and business productivity.
Drawing on results from an econometric model developed for the GSMA, report estimated that the increase in mobile penetration overall and the increased 3G penetration of Telenor Pakistan between 2011 and 2015 contributed $14,996 million to GDP.
Report said that benefits of enhanced digital inclusion are not only economic, but there are social benefits that are also captured.
Report said that several Telenor initiatives, such as its collaboration with Facebook, helped in reaping social benefits.
Telenor’s Impact on Financial Inclusion
Report said that while using Telenor’s Easypaisa services, subscribers made a total of $9,672 million of mobile financial transactions in 2015.
It said that since its introduction Easypaisa has grown into the third largest branchless banking service in the world.
Easypaisa services are used by 20 million active customers at the end of 2015, conducting nearly 650,000 transactions every day. In 2015, the value of transactions through Easypaisa was $7.8 billion, equivalent to nearly 3% of Pakistan’s GDP.
In addition Easypaisa also offers insurance products, such as its Sehat Sahara health insurance. By the end of 2015, Sehat Sahara had over 100,000 subscribers and had settled 1,400 claims with an average claim value of approximately $50.
Complete report on “Socioeconomic Impacts of Telenor’s Operations” across various markets is available here.