It is no small feat. Within a year of launch, telcos have migrated nearly 12 percent of their cellular subscriptions onto their expanding 3G networks. It took Indian 3G/4G operators over four years to secure similar transition. From a non-existent base, the quantum of 3G subscribers has swelled to 13.3 million as of June 2015, PTA statistics show. The rise of mobile broadband took overall broadband subscriptions in Pakistan to 16.9 million, up from 3.8 million as of June 2014.
How the 3G operators have carved up this market is interesting. Telenor Pakistan sits atop the 3G chart with 4.16 million users. Thats a solid 31 percent subscription share for an operator that opted for a smaller, 5MHz spectrum block in last years auction. In an interview last year in September, Telenors CEO Michael Foley told BR Research: "For Telenor, 3G will be a marathon, not a sprint." It seems that the Canadian bosss steady approach is working out well.
In contrast, growth for Zong, the China Mobile project in Pakistan, has surprisingly slowed. With 2.89 million 3G users, Zong had a market share of 22 percent at June end, trailing the second-ranked Mobilink that has a 38 percent cut.
Zong had gone big in the auction by acquiring both 3G and 4G licenses, with 10MHz to boot each one of those. Over in the more advanced 4G/LTE segment, too, Zong is not the leading operator. Its 105,000 subscriptions of 4G data are marginally lower than Warids 106,000 LTE subscribers, even though Warid LTE started rolling six months late in December 2014.
Ufone happens to be the last-ranked 3G operator. This, however, is not surprising given its holding groups strategy that resulted in Ufone buying the smaller spectrum block last year. "From day one, Etisalat has put emphasis on "value share" over "market share". We want to grow subscriptions but we want to be profitable. Ufone has to be on top in terms of revenues," was how Walid Irshaid, PTCL Groups CEO summed up Ufones playbook for mobile broadband in an interview with BR Research last year.
While number of subscriptions is an important benchmark, perhaps more so is how much those subscribers are worth - that is, how much data they are using, resulting in higher non-voice revenues. Operators have invested heavily in buying the spectrum and in rolling out their respective infrastructures. How much "value" (or ARPU - average revenue per user) data subscribers generate and how fast the growth is, will determine the operators appetite for more investment in coming years. Official figures on the operators 3G revenues aren available. We are still months away from seeing official data on overall cellular revenues for FY15 (FY14: Rs323 bn). Even then, the picture would be muddied thanks to the cellular 2G subscriptions going down by 18 percent year-on-year to 114 million in FY15. That purge owes, in most part, to the Sim re-verification drive conducted earlier this year, and in small part to the 3G trade-up.
Nonetheless, the circumstances are conducive for further uptake of 3G, and 4G. Operators are now increasingly bundling up data service with voice minutes - the tariffs on offer look affordable for a middle-income user.
Smartphones are being bought and sold in amazing quantities, thanks to their falling prices and rising interest from folks. At this pace, the market should be at least 20 percent 3G by June 2016. Eyes, meanwhile, will be on ARPU.
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