LAHORE - The 3G and 4G internet subscribers depicted a phenomenal growth of 20 percent during first four months of current fiscal year, reaching 35.4 million as compared to 29.5 million in June 2016.

According to Pakistan Telecommunication Authority (PTA) data, on monthly basis, the subscribers grew at a rate of three percent, whereby the increase in 3G/4G subscriber base was led by Zong and Mobilink. CMO’s competitive arena overtaken by Mobilink: the market leader with a 33 percent market share in the 3G/4G arena, depicted a subscriber base growth of 32 percent over 4MFY17 (11.8 million users), followed closely by Zong (8.6 million users), with its subscriber base depicting a 29 percent growth over the same period.

With Warid’s 4G subscriber base at 0.6 million, its merger with Mobilink would further strengthen the company’s competitive position CY17 onwards. In the whole scenario, the growth in PTML subscriber base remained muted, where the subscribers remained at 5.2 million, similar to the level seen in June 2016. Consequently, the topline growth for PTML remained muted and clocked in at Rs11.7 billion in 3QCY16 (up 3 percent QoQ). Price flooring mechanism to bode well for PTCL: PTML offers data services at one of the highest rates that is Re0.07/MB.

To put things in perspective, the 3G rates of PTML are 1.3x and 4.7x higher than the average rates offered by the industry (Re0.05/MB) and Zong (Re0.015/MB), respectively. This has partially led to a decline in PTML’s market share by 3pps over 4MFY17. In this regard, it is expect the upcoming materialisation of price flooring mechanism to potentially bode well for PTML, as it would decrease the disparity between rates on offer, leading to a possible shift of subscribers from other networks to PTML.

Industry experts said that investment perspective: Despite being a laggard, the materialisation of price flooring mechanism can prove to be a positive trigger for PTML’s competitive position and revenue outlook.