Pakistan telecommunication industry
HistoryPakistan is on the verge of Telecom revolution Pakistan continues to be one of the fastest growing telecom markets in the world. Reforms introduced by successive Pakistani governments over the last decade have dramatically changed the nature of telecommunications in the country. , the Pakistani telecom sector has attracted more than $9 billion in foreign investments. During 2007-08, the Pakistani Communication sector alone received $ 1.62 billion in Foreign Direct Investment (FDI) – about 30% of the country’s total foreign direct investment.
By March 2009, Pakistan had 91 million mobile subscribers – 25 million more subscribers than reported in the same period 2008. In addition to 3.1 million fixed lines, while as many as 2.4 million are using Wireless Local Loop connections
Pakistan is ranked 4th in terms of broadband Internet growth in the world, as the subscriber base of broadband Internet has been increasing rapidly with the total base crossing 170,000 in the country. The rankings are released by Point Topic Global broadband analysis, a global research centre.
Pakistan according to PC World was amongst those top five countries with the highest SMS traffic processed with 763 million SMS during 2008-09. In terms of year-on-year growth, Pakistan traffic volume grew by 253 percent compared to last year during the same period..
The contribution of telecom sector to the national exchequer increased to Rs 110 billion in the year 2007-08 on account of general sales tax, activation charges and other steps as compared to Rs 100 billion in the year 2006-07.
According to Government Board of Investment, Cellular Phone Subscribers:
2001-02 – 1,698,536
2002-03 – 2,404,400
2003-04 – 5,022,908
2004-05 – 12,771,203
2005-06 – 34,506,557
2006-07 – 63,159,857
2007-08 – 88,019,812
2008-09 – 91,400,000
Pakistan telecom industry is handling the telecom companies which are operating at this time like Mobilink, Ufone, Warid, Telenor, Zong etc…
Pest analysis of telecom industry in Pakistan
We analyze the pest analysis of Pakistan telecom industry .A PEST analysis is concerned with the environmental influences on a business. These are Political, Economic, Social and Technological issues that could affect the strategic development of a business. PEST analysis is a useful way of summarizing the external environment in which a business operates.
Contents of PEST
PEST Framework Analysis
1 Political Factors
2 Economic Factors
3 Social Factors
4 Technological Factors
Now we start from political factors…
How political factor affects the telecom industry of Pakistan
The Telecom sector all around the world and especially in Pakistan has experienced a tremendous growth in the last few years.
The telecom of Pakistan was awarded the status of industry in 2005 and since then it has been one of the fastest growing sectors of Pakistan from various factors such as the mobile density reaching 52.87 in April, 2008 and the number of mobile subscribers reaching 85 million.
Political Factors.
Telecom sector is playing a very important role in whole country and fastly spreading day after day. So it is also affects by government rules and regulation like other sectors.
The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses.
Ø Stable political environment
Ø Government policy influence laws that regulate or tax on telecom
Ø Government's position on communication
Ø Government's policy on telecom sector.
Ø Government have a view on culture and religion
Essential requirement Case
Ø A license issued by telecommunications regulation authority is required to commence business in that area; the number of players is thus restricted.
Ø Need to adhere to numerous health & safety regulations in order to comply with expected standards.
Ø Mobile telecom service providers do not have 100% freedom in pricing issues
Ø Due to the sensitive nature of the operations within the industry, governments would generally not allow 100% share holding by foreign investors in the local mobile telecommunications industry.
Economic factors
Telecom sector has been played an important role in our economy during the previous 5 to 6 years and help to increase efficiency in telecom sector
Ø In fiscal year 2008-09 saturation in the market and global financial crisis the total investment decrease 47% in telecom sector of Pakistan which is a huge deficit in telecom sector of Pakistan.
Ø Despite the global crisis the telecom sector continuous to grow positively in term of subscription and revenue.
Ø Operators speedily rolled out their infrastructure reaching out to meet of the population. But still huge are remain where investment opportunities exist.
Investment in telecom sector
Ø In 2008-09 operators total US $1.6 billion worth of investment has been made by all operators in Pakistan.
Ø Pakistan provide profitable environment for investment for foreign investors to invest in telecom sector of Pakistan.
Ø Due to profitable environment, telecom sector attract US $815 million in 2008-09 which was a big investment during this financial crisis period.
Revenue and growth rate from telecom sector
Ø In last 6 months of 2009, telecom sector received over US $143 million. Which was 18% of total Foreign Direct investment in Pakistan?
Ø Telecom revenue showed 19.8% growth during 2008-09 but in 2007-08 it showed 18.2%.
Ø Cellular mobile sector continued to be the leader in telecom revenue, whose share came out to be 64% in total revenue of telecom sector of Pakistan
Ø Cellular mobile growth rate is 17% in 2008-09.
Ø Government of Pakistan reduce GST/FED rate from 21% to 19.5%.
Ø Telecom sector contribute to National exchequer112 billion in 2008-09 but in 2007-08 it was 111 billion.
Socio-Cultural Factors:
Ø As Pakistan is an Islamic country and people are very strict in case of Islam any thing against the philosophy of Islam on either print or electronic media are treated as against Pakistan.
Ø Most of the people dislike anything extra-ordinary or something which sabotage their culture or subculture.
Ø Companies who are targeting upper-end of market mostly published and aired their advertisement in English language.
Ø In metropolitan cities women are doing work along with their other responsibilities but other than metropolitan cities it is difficult for women to convince their parents and spouses for work.
Technological factor:
The companies involves in the communications industry in respect to Pakistan are in a constant race to be the first to have the newest phones with the latest technology. As a result, research and development play an imperative role in these companies because of the fact that they all want to be known as the innovators.
Now these days Mobile telecommunication technology has made several different products like.
i. Walkman.
ii. Paging.
iii. Use of postal mail.
iv. Alarm clocks.
Mobile / SMS banking.
The technology creates so many changes in telecommunication sector like in the early stage of telecom we considered that camera was the latest technology, today, cameras come standard with most mobile phones.
Advanced features and services such as cameras, MP3 players, multimedia messaging, email and mobile TV are increasingly offered as base capabilities on new phones rather than as extras. We will continuously see an increase in Smartphone abilities as well as structure.
The industry by using technology creates several risk related situations especially with regards to network security & system operations.
Currently mostly companies are providing Multi-media Messaging Services (MMS), General Packet Radio Service (GPRS), Virtual Private Network (VPN), Pocket Stocks, Conference Calling, Wallpapers Animated pictures Polyphonic ring tones (WAP), and Voice Mail at low price and some are also providing feature that one can see TV channels on their cell.
Now days, due to the sophisticated nature of technologies that exist within the telecommunication industry, it has allowed & facilitated new ways of working for individuals as well as creating new business opportunities.
Now by using new method of technologies companies are investing in their infrastructure to not only expand but also to upgrade their existing structure
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