Country's telecom sector reflects slowdown in growth

ISLAMABAD (APP) - Although the rise in the number of mobile subscribers in the country has been extremely rapid over the past nine quarters, the data of the telecom sector reflects a slowdown in growth. The mobile market added around 9.9 million new customers in the first half of 2008, expanding by 12.6 percent to reach 88.05 million mobile users. The Annual Report of Pakistan Telecommunication Authority (PTA) 2008 reflects that Telenor Pakistan emerged as the fastest growing telecom company as Telenor added around 7.4 million subscribers in the incumbent year as compared to 7.1 million in 2007. Mobilink comes second with the addition of 5.7 million subscribers during the same period. Warid Telecom added another 4.8 million subscribers while Ufone bagged 4.0 million subscribers as compared to 6.5 million in previous year. CMPak entered the cellular market with aggressive marketing and infrastructure roll out. Its growth was negative in the previous year. However, it added 2.9 million subscribers in last few months. The cellular mobile penetration in Pakistan reached 54.7 percent at the end of year 2007-08 which is 15.3 percent higher than the previous year. By the end of June 2008, the mobile penetration in Pakistan had surpassed the 50 percent threshold. Mobilink continues to dominate Pakistan's mobile market, ending Q208 with over 32mn subscribers, said a report. Mobilink's market share continued to fall, dropping to 36.4 percent from 41.9 percent in the previous year. The operator's parent company, Orascom of Egypt, now appears to be increasing its investments in an effort to prevent a further loss of market share. In terms of customer numbers, Telenor moved into second place in the second quarter of 2008, beating Ufone, the mobile business of Pakistan's incumbent operator, Pakistan Telecommunication Company Limited (PTCL), by a mere 25,000 customers. Both operators currently sit neck-and-neck with 20.6 percent shares of the market. While Telenor continues to expand its market share, Ufone has had a relatively stable market share in recent quarters. Telenor is expected to pull ahead of Ufone in Q308. Meanwhile, with regard to our 3G forecasts, the Pakistan Telecommunications Authority (PTA) has said that the process of awarding 3G licenses will be completed before the end of 2008 via an auction. The latest data suggests that the market for both wireline and wireless fixed-line services has now entered a period of decline. Although the traditional fixed-line services provided by PTCL's competitors continue to grow, PTCL's own fixed-line customer base saw a sharp decline in the first six months of 2008. Meanwhile, the only wireless local loop (WLL) operators which reported an increase in customers were World Call and TeleCard, with PTCL once again reporting customer losses. Having fallen by 2.8 percent in the first six months of 2008, it is being predicted that the number of fixed-line customers will fall by around 4.9 percent for 2008 as a whole. According to the PTA, Pakistan had just over 130,000 broadband internet subscribers at the end of March 2008, up from 65,000 in March 2007. Despite the strong growth, Pakistan's broadband penetration rate was still only 0.1 percent in March 2008. Digital Subscriber Line (DSL) and hybrid fibre coax (HFC) remain the most popular broadband technologies. However, Pakistan's limited fixed-line infrastructure has deterred growth of these services, and the cost of broadband has further undermined growth while WiMAX is expected to account for a growing number of broadband connections in the future.

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