The teledensity in the last fiscal year was more than double after consumers attracted towards cellular phones. The telecom sector is one of the fastest growing sectors in Pakistan. Indeed, the FY06 could be termed as a fabulous year for the telecom sector for its upbeat growth.
While the conventional land/fixed line segment posted flat trend, the other segments ie cellular and WLL have depicted excellent display of growth in FY06.
Against its level of 11.9 percent at the beginning of FY06, Pakistan's total teledensity has more than doubled to 26.3 percent by the end of the year.
It is pertinent to note that the growth in teledensity is mostly fuelled by cellular growth. The fixed line teledensity has improved marginally to 4.1 percent in FY06 from 3.6 percent in FY05, while cellular density increased to 22.2 percent by the end of FY06 from that of 8.3 percent a year earlier.
It is interesting to note that cellular users accounts for around 85 percent of the total telecom subscribers in Pakistan. The remaining 15 percent are using fixed line (wireline and wireless). In India, about 68 percent of the total subscribers are mobile users with teledensity of 13.5 percent as of May 2006.
As mentioned above, within the telecom sector the major growth was witnessed in cellular segment. As per data release by the Pakistan Telecommunication Authority (PTA), mobile subscribers have reached 34.5 million at end of FY06 against 12.7 million subscribers previously - a growth of 170 percent. This translates into mobile teledensity of 22.2 percent. On an average, cellular subscribers have grown by 1.8 million per month (60k per day) in FY06. It was observed that the later half of the year saw higher growth, where on average 2.1 million connections were added each month versus 1.4 million in the first half of the year.
To win the race, the cut throat competition was seen amongst the cellular operators and ultimately we saw a price war. This, in turn, has resulted in the fall of Arpu (average revenue per user). As per latest available figure by PTA, Arpu of cellular companies has declined to $4.05 in 2005 as compared to $6.06 in 2004.
The WLL, relatively a new phenomenon in Pakistan, has posted gigantic growth of 284 percent with 1.03 million subscribers by FY06 versus that of 0.27 million a year ago. The PTCL, the largest player in WLL, gained its market share from 61 percent in FY05 to 64 percent in FY06. While Telecard, the second largest player, has lost its market share to 22 percent from 37 percent in FY05. The PTA awarded two more licenses of LDI making total number of LDI operators to 14. Here also, increased competition was observed leading to price war-like situation amongst the players.
Currently, there are six mobile operators working in Pakistan. The Mobilink is the market leader with a share of 50 percent by FY06 (58 percent in FY05). The following shows the subscribers base of the cellular companies and their respective share.
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Cellular subscribers as on June 30, 2006
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FY06 Growth (%) % share
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Mobilink 17.21 130% 50%
Ufone 7.49 190% 22%
Warid 4.86 853% 14%
Telenor 3.57 325% 10%
Paktel 1.04 131% 3%
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