Telecos Remit $177 Million in Profits to their Home Countries
3 months ago
Telecom operators have managed to remit a handsome amount of US$177 million to their headquarters in the outgoing financial year 2016-17 which is a positive sign for foreign investors in Pakistani market.
According to statistics of State Bank of Pakistan, the dividends sent back by telecom operators to their homeland is nearly equal to the amount sent in the financial year of 2015-16, which was recorded at $176.2 million.
This reflects the consistency of the telecom sector especially when it comes to profit repatriation. On the other hand, the telecom operators’ revenue generated through Pakistan’s market reflected its significant weightage in the balance sheets of their respective groups.
It is noteworthy to mention that here that telecom sector profit repatriation showed a decline of 53 percent in the nine months of FY17, but the sector bounced back with the rest of the three months to remit out a health amount to their headquarters.
By end of March 2017, the telecom sector repatriated a profit of $54.5 million in the outgoing financial year, however the money sent back to headquarters received a record growth of $122.9 million in the last quarter.
A couple of companies’ remittances to their headquarters were usually reported in the quarter of April to June every year, whilst some of the companies gradually repatriate profit during different months.
Besides the profit sent to headquarters, a major part of revenues by telecom operators is invested and spent in the local market on the payment of taxes to the government, service fees and utilities expenses to vendors and other companies, marketing and advertisement expenses to media houses, and salaries to their staff members.
Profits/ Dividends Repatriation by Telecom Operators (millions)
Source: State Bank of Pakistan
Telecom Sector Dividends Equal FDI
The telecom sector investment and profit repatriation is equal in the outgoing financial year 2016-17.
According to State Bank of Pakistan (SBP), the Foreign Direct Investment landed in telecom sector was recorded at $177.2 million, and the profit repatriation was recorded at $177.8 million.
The situation was almost the similar in the past financial years, however the it is likely to improve further with the expected increase in revenues of telecom operators through the earnings of mobile broadband.
Source: State Bank of Pakistan
Moreover, the spending of telecom operators were slightly higher this year especially when it comes to imports of telecom apparatus for upgrading and maintenance of the network infrastructure.
According to Pakistan Bureau of Statistics, the telecom sector imports of apparatus stood at $646.201 million in the outgoing financial year of 2016-17 as compared with $607.903 million.
It is hoped that the number of mobile broadband users on the rise by each passing month and the overall consumption of 3G/4G services is also surging on the network of different mobile phone companies.