Telecom Sector Revenues Likely To Record Slight Growth in FY17

Revenues from telecom sector reached an estimated Rs. 234.9 billion during the first two quarters of Financial Year 2016-17.

The government made this disclosure in the recently released Economic Survey of Pakistan 2017.

The overall revenues of telecom sector are likely to match or show growth in the full financial year compared with the last year.

According to available statistics, revenues of the telecom sector stood at Rs 454.4 billion in the full financial year of 2015-16. Doubling the figures to compare on a yearly basis, the revenues of the telecom sector will be settled at Rs 469.8 billion for 2016-17, which is 3.3 percent or Rs 15.4 billion higher than previous year.

However, it seems growth in revenues of telecom sector can be considered an ambitious target. Revenues are likely to either match the level of previous year or record slight growth in the current financial year 2016-17.

Economic Survey of Pakistan commented that the commercial launch of 3G and 4G LTE services has opened new opportunities for revenue generation for the mobile operators.

Availability of 3G and 4G services has enabled development of new applications and data based services, and the people of Pakistan are quickly adapting to these new technologies and services.

Telecom sector has shown positive growth during the first two quarters of FY 2016-17 as the total teledensity reached 72.36 percent at the end of March, 2017 compared to 70.81 percent at the end of last fiscal year due to growth in cellular mobile subscribers, the survey report further commented.

Telecom Sector Contribution to Economy

During the first two quarters of the FY2016-17, telecom sector contributed estimated Rs. 53.76 billion to the national exchequer in terms of taxes, regulatory fees, initial and annual license fees, activation tax, and other charges.

In the last financial year, the contribution of the telecom sector was significantly higher and stood at Rs 159.65 billion. It seems that contribution of telecom sector through non-taxes revenues will show a negative growth during the closing of current financial year.

Investment in Telecom Sector

According to Economic Survey of Pakistan, telecom operators have invested $287.6 million from July to December, 2016. The main driver behind this investment is the cellular mobile sector, the Economic Survey of Pakistan said. It has invested $262 million during the first two quarters of FY2016-17.

In terms of overall investment in the telecom sector, the momentum that was started in FY 2012-13 for the up-gradation of telecom networks for 3G and 4G LTE services has continued.

In contrast to the investment numbers provided by MoIT, the figures of State Bank of Pakistan (SBP) showed a dismal situation of the foreign direct investment in telecom sector. Even from July to April of the current financial year, the FDI has not shown a positive but rather a negative trend of $82 million.

The investment numbers from MoIT and SBP are different. This is due to the fact the investment figures from the ministry also include investment made by individual companies not from their headquarters but what they invested through their regular earning from the local market or investment made through borrowing of loans from local banks. SBP’s figures however do not take those figures into account.

  • Unless we Pakistani’s organise and ask as a group on the street for the betterment of services nothing better comes out of any numbers. These draconian companies only care about milking Pakistani consumers top to bottom, while taking the same money back into the countries where the revenue ends up being spent on their own people for their betterment.

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