Telecom sector remains a potential window for FDI

ISLAMABAD (Online): Telecom sector has a potential to attract billions dollars of Foreign Direct Investment (FDI) as total revenues of telecom operators in the country has been swelled to an all time high Rs 362 billion in 2011 at the end of financial year.

The telecom sector has expanded its services rapidly in many parts of the country over the period of past one decade. It is still in the evolving stage to deploy its services in many un-served small cities and villages and companies are plan to increase their operation areas in maximum locations to get handsome number of customers of their different services.

According to a report of Pakistan Telecommunication Authority (PTA) the telecom sector contributed more than Rs 116.9 billion to the national exchequer in the outgoing financial year during 2010-11.

Accordingly, the GST/FED collections from the sector spike by 20% to reach Rs 52.6 billion in the same year whereas Rs 7.2 billion activation tax collected.

According to this report PTA deposits reached to Rs12 billion whereas other taxes reached to Rs 45.2 billion.

Cellular income which constitutes major chunk of the telecom revenues was boosted by 11% to Rs. 262 billion from Rs. 236 billion. A modest increase in cellular industry’s ARPU was witnessed from US$ 2.41 in the previous fiscal year to US$ 2.45.

The revenues of local loop operators recorded Rs58.32 billion. The wireless operators earned Rs4.84 billion and LDI sector revenues reached to Rs 29.95 billion. The value added sector made Rs 7.02 billion revenues during fiscal year 2011..

The number of mobile subscribers at the end of fiscal year 2011 stood at 108.9 million, showing growth rate of 10%, double than that of the last year. Mobile penetration rose to 65.4% from 60.4% in the previous year.

In this report it has been said that during the past three years, PTA has collected around Rs. 40 billion against APC for USF. In its drive to curb grey traffic, the Authority saved revenue of US$ 26 million.

Pakistan Telecommunication Authority in its report “Vision 2020” estimated that telecom investments in Pakistan would be landed more than US$ 2.4 billion by 2020. The mobile subscribers’ base is expected to be widened to 161 million, hence approximately 89% of the total population by 2020.

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