It’s been a difficult year for Pakistan’s mobile players, but the one bright spot in the market has been strong data revenue growth. According to a report by the State Bank of Pakistan (SBP), data revenue in the second half of the year grew 69 per cent from the previous year.
Without stating figures, the annual report said the increase in data revenues is likely to continue in the second half of the fiscal year ending 30 June, ProPakistani reported.
Operators are starting to see benefits from their investments in 3G/4G networks in the form of rising mobile data penetration and usage, with about one million 3G/4G customers added each month since the commercial launch of these services, the SBP report estimated.
The top four operators, which together have 94 per cent of the country’s mobile users, added more than ten million 3G connections in the first three months of the year, according to GSMA Intelligence. Mobilink, the market leader by a small margin, added 3.1 million 3G connections during the period, while number two Telenor picked up 3.3 million. Zong, the only 4G player, had 200,000 4G users in Q3.
Operators’ revenue in Q3 fell 12 per cent to PKR102 billion ($98 million) from the previous quarter; mobile revenue dropped 1.8 per cent in the fiscal year ending 30 June. Operators are also struggling with low margins and have complained to the government about high taxes, low return on investments and weak economic growth.
The federal government 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.
In addition, direct foreign investment (DFI) plunged 72 per cent in the fiscal year ending 30 June and the sector’s tax contributions fell almost 50 per cent from the previous year. The drop in DFI was attributed in part to the huge inflows from the operators’ parent companies a year earlier for the 3G/4G spectrum licences.