Telecom sector has shown remarkable growth in 2012 where total tele-density reached 72 percent, cellular subscribers crossed 120 million and broadband subscribers crossed the figure of two million, reflecting annual growth of 100 percent. According to official data available with Business Recorder, the overall performance of the Pakistan Telecommunication Authority (PTA), regulator of telecom sector, remained satisfactory last year.
This is evident from the overall growth in the telecom sector particularly cellular companies. During the year, the Authority continued its endeavours to provide an enabling environment for progressive, competitive and modern telecom services in the country. The Authority remained vigilant of developments and regulatory challenges in the sector and proactively worked for the provision of conducive regulations, automation of telecom subscription, regulatory compliance, consumer protection and high quality of telecom services.
According to officials data, telecom revenue spiked to Rs 411 billion showing a growth of 13 percent during 2011-12, while telecom contribution to the national kitty was the highest ever this year ie Rs 132.51 billion. However, investment remained on the lower side during 2011-12, as operators have established their basic infrastructure, investments required for necessary expansion, system maintenance and new technology adoption. Therefore, telecom investment, which was to the tune of four billion dollars in 2006-07, reduced to 240 million dollars during 2011-12.
Foreign Direct Investment (FDI) in telecom has also shown similar pattern as overall investment in the sector. During 2006 to 2010, telecom sector attracted over six billion dollars FDI in the country, which was almost 30 percent of the total FDI in the country. Net inflows of FDI in telecom remained negative during the year on account of capital outflow by some companies. Overall slow economic growth had also contributed in low investment in telecom, sources maintained.
Sources maintained that telecom sector had been contributing significantly to the national exchequer in terms of taxes, regulatory fee, activation tax and other charges. During fiscal year 2012, the sector contributed a record Rs 132.5 billion compared to Rs 117 billion last year. Major share of this growth has been through Federal Excise Duty (FED) and other taxes. Telecom sector has been overburdened with heavy taxes and telecom companies are contributing almost 30 percent of their revenues under FED and withholding tax. General Sales Tax (GST) on telecom services is deducted under FED at 19.5 percent whereas normally prevailing GST rate on services in the economy is 16 percent. Rationalisation of telecom taxes could positively contribute to the telecom sector growth and telecom sector contribution to the economy, data revealed. Telecom is the largest contributor to GST collections from services in the country. GST/FED collected from telecom was Rs 56.9 billion in 2012 compared to Rs 52.7 in the previous year, showing a growth of eight percent.
During fiscal year 2012, total telecom imports in the country reached 954 million dollars, showing a sharp rise of 24.5 percent over the previous year. This increase in total telecom imports is due to a sharp rise in the imports of cellular mobile handsets in the country, which rose to 465.3 million dollars in 2012 compared to 218 million dollars in fiscal year 2011, registering a growth of 113 percent.
PTA has introduced SIM sale and subscriber verification procedures that helped block 27 million irregularly obtained SIMs. Anyone can verify the number of issued SIMs by sending his computerised national identity card (CNIC) number at 668 through a text message. These mechanisms have also helped regularise SIMs issued to 21 million subscribers. During the year 2012, PTA resolved 33,310 consumer complaints received against mobile operators.
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