Pakistan Mobile Market Has Got A Huge Potential, According To GSMA

Pakistan Mobile Market Has Got A Huge Potential According To GSMA
Courtesy: PhoneWorld

According to Groupe Spéciale Mobile Association (GSMA), 59.7 percent or approximately 120 million of the total population of Pakistan is not connected to or familiar with the mobile network thus, implying that major investment is necessary for the mobile market expansion and penetration.

GSMA has recently developed a report on Pakistan stating that the total unique subscriber mobile penetration in Pakistan has been 40.3 percent in the 3rd quarter of 2018. This subscriber penetration in Pakistan is the lowest in the South Asia region. According to GSMA, the total number of unique subscribers has increased by 37.4 million or 85.1 percent between the time period of 2008 and 2018.

Even though the mobile market of Pakistan has exhibited substantial growth over the past ten years but the majority of Pakistan’s population is still not connected to the mobile services available by the four major telecom operators Jazz, Telenor, Ufone and Zong operating in Pakistan.

It is interesting to note that significant capital expenditure has been spent by the mobile operators for mobile sector expansion in Pakistan with a total annual capital investment of around 25 percent of the revenue during the last decade (GSMA).

The report shows that the total mobile sector revenues for the year 2017 were $3.4 billion that is equivalent to 1.1 percent of Pakistan gross domestic product (GDP). Moreover, the mobile sector has contributed around $1.8 billion of direct economic value to Pakistan in 2017 that is around 0.6 percent of the GDP. However, the above-mentioned contribution to the GDP is fairly low when compared to the international benchmarks keeping in view the expansion and inaccessibility of Pakistan’s population to the mobile network.

This report suggests that significant investment is required in order to augment the expansion of the mobile market in Pakistan and to enhance the affordability of the mobile digital services for the customers. There are three important aspects that should be addressed in order to speed up growth in the mobile market in Pakistan:

  • Network coverage expansion
  • Quality and accessibility of data services
  • Affordability of handsets

Digital Policy of Pakistan

PTI has also mentioned in its Manifesto as well as in PTI Digital Policy 2018 that the growth of the mobile market is one of the new government’s economic objectives. Other objective includes:

  • Creation of new jobs
  • Transformation into a knowledge economy
  • Inclusive economic growth

In order to achieve these objectives, investment to improvise the quality, availability, and affordability of the mobile networks should be the prioritized keeping in view the current low level of unique subscriber penetration as well as lower level of broadband penetration. These improvements will serve as a major contributor towards the development of the digital economy of Pakistan.

According to the United Nations (UN), for both low and medium consumption baskets, the UN affordability target is that 1 GB data cost should be less than 2 percent of the monthly income. However, the total cost of mobile ownership in Pakistan is above the “1 for 2” UN affordability target for the bottom 20 percent and 40 percent income groups of the population. One of the biggest challenge faced by the lower-income Pakistanis is the unaffordable total cost of the handset. The payment of mobile phone cost in installments can enable the population to buy the handsets.

However, another factor of upcoming regulatory and tax charges is going to create a great impact on the affordability of the handsets in Pakistan since an increase in taxation of handsets has been proposed in the Supplementary Bill 2019 that will cause an increase of the prices of mobile phones. Moreover, the launch of the Device Identification Registration and Blocking System (DIRBS) by Pakistan Telecommunication Authority (PTA) could also increase the average price of the mobile phone in Pakistan market by allowing only legal phones and devices to be operational. The Government has to take measures to improve the affordability of the handsets.