2017 Pakistan - Telecoms, Mobile, Broadband and Digital Media - Statistics and Analyses

Mobile Broadband sees rapid growth in Pakistan

Pakistan’s telecom market had been struggling for a long time with the transition from a regulated state-owned monopoly to a deregulated competitive structure. As well as capital input from the government, the World Bank and the Asian Development Bank (ADB) have been active in providing capital for country’s telecom sector.

The fixed line market in Pakistan remains underdeveloped due to the dominance of the mobile segment. Further, the number of fixed telephone lines is slowly declining as the mobile segment continues to expand. Overall penetration dropped from 2.6% in 2014 to 1.9% in 2015 and 1.5% in 2017. The market is predicted to decline further over the next five years to 2022 as the mobile segment continues to grow for both voice and data/broadband usage.

The country’s mobile operators are all fighting for a larger share of the market, forcing down prices and subsequently Average Revenue Per Unit (ARPU). The operators have been shifting their focus to Value Added Services (VAS) in order to improve revenues.

In 2017 Mobilink and Warid merged their operations into a single brand, Jazz, which saw the number of mobile operators reduce from six to five. Further market consolidation is predicted over the next five years as the operating margins of the major operators come under further pressure.

Two main challenges facing mobile operators in Pakistan remain: a largely rural population with up to 70% of the population live in rural areas and difficulty serving those areas of the country that are politically unstable.

4G network rollouts continue across the country. By 2017 over 30% of Pakistan population was covered by a 4G network.

Pakistan has seen a dramatic increase in mobile broadband penetration over the past five years with market penetration increasing from below 1% in 2012 to 24% in 2017. However the mobile broadband market is still at an early stage of development with penetration well below most other Asian countries. Strong growth is predicted over the next five years to 2022.

Fixed broadband penetration is Pakistan remains very low mainly due to the dominance of the mobile platform. Also, the limited and declining number of fixed lines in Pakistan is restricting more widespread development of fixed broadband. Over the next five years to 2022 low to moderate growth is expected from a small base.

DSL dominates the fixed broadband market. Its market share has been rising over the past five years whereas HFC and FTTH each constitute for a very low market share of the overall fixed broadband market.

Increased smartphone adoption, internet penetration, and digital awareness due to adoption of 3G and 4G services are drivers for e-commerce adoption. However there still are a number of factors are inhibiting adoption including lack of awareness in both consumers and merchants and issues with customer fulfillment.

Key developments:

• Rapid roll out of the 3G and 4G networks has seen strong uptake of mobile broadband.
• The fixed line market remains underdeveloped due to the dominance of the mobile segment.
• This market is predicted to decline further over the next five years to 2022.
• Fixed broadband penetration is Pakistan remains very low mainly due to the dominance of the mobile platform.
• mobile broadband services have totally overwhelmed the fixed broadband sector of the market;
• E-commerce in Pakistan will be a US$1 billion market by 2020.
• 4G network rollouts continue across the country.
• Mobilink and Warid merged their operations into a single brand, Jazz.

Key companies mentioned in this report:

Pakistan Telecommunication Co Ltd (PTCL); Mobilink (PMCL); Ufone (PTML, PTCL’s subsidiary); Telenor Pakistan; Warid Telecom; Zong; WorldCall; TeleCard; Instaphone, PakNet; Wateen Telecom (subsidiary of Warid Telecom)