State of Telecom Industry in Pakistan

As reported by Associate Press of Pakistan which cited the PTA 2007 annual report. After all these years there is still talk of incentives for handset makers and all that but no tangible plans have been announced. It also misses the point that with large scale phone manufacturing in India and China, it is hard to attract manufacturers to Pakistan.

Around 20 per cent of mobile users in Pakistan change their handset thrice a year which indicates that Pakistan is a lucrative market for manufacturers of mobile handsets and other telecom equipment. A similar percentage of mobile users change the mobile handset once a year and this could be a successful business model, said Pakistan Telecommunication Authority (PTA) in its latest report.

A survey conducted by the Authority this year also found that 20 per cent user change the mobile handset every two years.

The report said the strategic location of Pakistan which has spent about $1.347 billion on import of cellular mobile handsets and other telecom apparatus in 2006-07 is also an added advantage.

According to the report, the government was considering giving incentives to leading manufacturers of cellular mobile handsets and telecom equipment to consider manufacturing mobile sets and other equipment locally where more than two to three million subscribers were being added on cellular mobile networks every month and still a large patentable exists.

The potential investors can also target other emerging and developing economies in the region by exporting handsets or equipment from Pakistan to provide better economies of scale, it said and added the potential investors may also explore public private partnership in such adventures.

The report said the spending of $1.347 billion on import of cellular mobile handsets and other telecom apparatus in 2006-07 puts burden on country’s foreign reserves and increases trade gap. During the period, about 4.2 per cent imports were for the telecom sector while this ratio was only 2.4 per cent in 2003-2004.

The report said the imports of cellular mobile sets with battery shot up from $144.1 million in 2003-04 to $ 670.2 million in 2006-07 while other telecom apparatus imported into the country went up to $ 677.5 million in 2006-07 as compared to $234.8 million in 2003-04.

It said the exponential growth in the telecom sector is burdening the overall imports where sector requires spending of about US$ 1 billion just on the import of cellular mobile hand sets annually, the report said and added during the last four years cellular mobile handsets worth $ 1.7 billion have been imported.

According to the report, the government was considering giving incentives to leading manufacturers of cellular mobile handsets and telecom equipment to consider manufacturing mobile sets and other equipment locally where more than two to three million subscribers were being added on cellular mobile networks every month and still a large patentable exists.