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Telecom sector still best for investment - LRE - 11-04-2008 05:49 PM
Telecom sector still best for investment
Associated Press of Pakistan
ISLAMABAD: Pakistan, after obtaining thriving growth and investment in telecom especially the cellular sector, still offers the best opportunities for investors as million of rural people awaits communication services.
Becoming a destination for investments in IT and telecom and attracting more than US $ 9 billion Foreign Direct Investment (FDI) during last few years, Pakistan is still a high potential area where major companies of the world like Mobilink are still investing.
It is the sector which is attracting more investment than any other sector in the country where total number of fixed and mobile subscribers has reached from 8 million in 2003 to over 89 million in 2008 with major contribution coming from the mobile sector especially the Mobilink which has around 31.5 million subscribers base. Teledensity in the country has also increased to 58 percent of the population which is the highest in South Asia.
A question usually arises these days, can Pakistan wherein last year mobile industry invested close to US$3 billion continues to be one of the fastest growing telecom markets in view of worldwide economic crunch. As we all probably aware, we are currently in a global economic slowdown and with rising international oil prices coupled with consumer price inflation, we expect to see consumers with significantly reduced spending power.
In the developed world including US, western Europe, Japan), where new mobile subscriber growth had saturated some time ago, the telecom industry is now bracing for a major slowdown. In addition to a slowdown in new mobile subscriptions, there's expected to be a slowdown in the sales of handsets as well.
Pakistan, of course, cannot remain shielded from this global turmoil. But in fact, considering the situation, the telecom sector in Pakistan is not doing too bad. The sector was by far the largest recipient of foreign direct investment in 2007-08. As per PTA, the industry continues to add more and more new mobile subscribers every month even under the current conditions.
In fact all know we in Pakistan have a huge growth potential as far as telecom is concerned, even if we compare with just the neighboring countries, majority of the rural population still awaits cell services. There are 3G and 4G technologies yet to be deployed, and there's so much more to value added services than downloading ring tones and Bolo SMS.
So in short, the answer to the question posed in the title is "No". In my opinion, there is no saturation point as yet. The industry is showing a healthy cautious growth in spite of the global economic slowdown. And best of all, no layoffs announced in the local mobile industry as opposed to other parts of the world.
Mobile companies are still committed that the industry will continue to work with the government for the rapid provision of state of the art information and communication services in Pakistan, with a heightened focus on empowering rural communities. All the mobile companies have continued their trend of investment and introducing new services. Sale of new connections also continues. Mobilink, having a leading market share with more than 31 million customers and crossing the figure of covering over 10,000 locations across the country is now focusing on rural population. The representatives of other cell phone coperators including Ufone, Telenor, Warid and China Mobile are of the v iew to invest more and more to expand thier network especialy to far flung areas.
Growth trend would remain continue in the mobile industry uninterrupted provided more proactive steps need to be taken. Committment is there both from the government and operators sides to the further promotion of telecom sector, however incentives most importantly relaxation in taxes would help leverage its strength for growth of economy and social inclusion of all sections of population.
http://www.thepost.com.pk/CorpNewsT.aspx?dtlid=190468&catid=8