Mobile broadband space

After hitting the 100-millon mark last June, the mobile broadband subscriptions (3G and 4G) continued their growth run in the ongoing fiscal. As per the latest data released by the sector regulator Pakistan Telecommunication Authority (PTA), the number of mobile broadband subscriptions had reached nearly 113 million as of April-end 2022, showing a growth of 16 percent year-on-year (up 13% since June 2021). Recent growth in digital payments and e-commerce is due, in part, to higher mobile broadband coverage.

The number of unique subscribers is also growing in tandem. Assuming that every third mobile broadband user in Pakistan is holding two Sims/connections, then the unique subscribers would stand at nearly 85 million as of April 2022 (10 million more since June 2021). Considering there are 120 million or so adults in Pakistan, the presumed density of mobile broadband comes to 70 percent of adult population. There is a lot of room for growth, especially in areas away from major cities and second/third-tier cities.

Among the four players, Jazz leads with nearly 43 million mobile broadband subscriptions as of April 2022, having a market share of 38 percent. At number two is Zong, with 31.3 million subscriptions and a market share of 28 percent. Telenor is third in the pack, with nearly 25 million subscriptions and market share of 22 percent. Ufone is at the end, with 12.4 million subscriptions and 11 percent market share.

Absolute growth in mobile broadbandsubs has naturally been driven by Jazz, as it is the market leader. But other operators have also added significant subscribers. In relative terms, Ufone’s mobile broadband subscription pie grew by 18 percent between June 2021 and April 2022. In the same period, mobile broadband subscriptions grew by 14 percent for Zong, 12 percent for Telenor and 11 percent for Jazz.

It has been nearly eight years since the rollout of mobile broadband in Pakistan, and data revenue stream has become prominent since. But thus far, despite phenomenal increase in mobile broadband footprint, the data revenues have yet to cross 50 percent of topline for any of the operators. This speaks to the continued difficulties in monetizing a supposedly-lucrative revenue segment in a price-sensitive market.

Still, to survive, there has been a race to expand 4G networks. Operators have been making significant capital investments to add to their collection of 4G towers. It shows in the subscription numbers. However, current macroeconomic uncertainty (which raises cost of service and lowers investor returns), inflationary pressures (which drive down connectivity spending) and government measures (e.g. mobile phone import freeze and potentially higher telecom taxes) pose significant challenges to this segment’s future growth.