Higher capex, new taxes push Pakistan’s PTCL into the red

Higher capex, new taxes push Pakistan’s PTCL into the red

27 OCT 2015

Pakistan’s third largest operator PTCL reported a large loss in Q3 as it boosted investment in its mobile subsidiary’s 3G network and the business environment deteriorated after the government raised taxes.

The operator posted a net loss of PKR371 million ($3.54 million) during the quarter, although this was narrowed from a loss of PKR407.4 million in the prior-year period.

Its operating profit dropped 78 per cent to PKR328 million, and revenue fell 3.3 per cent to PKR29 billion.

Its mobile unit Ufone, with a 15 per cent market share, also experienced a continued loss of customers. Over the past year, its user base dropped by 5.5 million to 18.6 million, according to GSMA Intelligence. While 3G connections almost doubled to 4.2 million, it lost more than seven million 2G connections from Q3 2014.

The federal government this year doubled the sales tax on various categories of imported mobile handsets in June to PKR300-1,000 ($3-$10), and the government in Punjab introduced a 19.5 per cent sales tax on internet usage in early June.

Ufone has been paying the internet usage tax to the government, after opting not to pass the GST onto its customers because of the fierce competition for mobile internet users, ProPakistani reported. The government has indicated it plans to drop the tax on internet services, but no official announcement has been made since it first introduced the controversial tax five months ago.


Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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