July 2015 to March 2016: revenues of telecom sector estimated at Rs 333.2 billion RECORDER REPORT

Revenues of Telecom sector during July 2015 to March 2016 were estimated at Rs 333.2 billion, revealed the Economic Survey (2015-2016) released on Thursday.
According to the Survey, Telecom sector showed positive growth during the first three quarters of Fiscal Year 2016. Total teledensity reached 70.4 percent at the end of March, 2016 compared to 62.8 percent at the end of last fiscal year, showing an increase of 12.1 percent during first three quarters of Fiscal Year 2016. The prime driver of teledensity rise is the growth in cellular mobile subscribers as FLL and WLL teledensity slightly dropped.
Revenues of Telecom sector during July 2015 to March 2016 are estimated at Rs 333.2 billion. Due to loss of millions of cellular subscribers after Biometric Verification System (BVS), re-verification process and intense competition and low tariffs, a declining trend in revenues of Telecom Operators is being observed since last year.
Although this decline is in line with the international trend of profitability and revenues in Telecom Industry, Pakistan's Telecom Industry can improve its revenue generation by expanding their value added services and entering into new avenues of growth such as branchless / mobile financial services and other ICT enabled services in collaboration with other service providers in the economy.
According to the Survey, during the first three quarters of FY 2016, telecom sector has contributed an estimated Rs 105.9 billion in the national exchequer in terms of regulatory duties and taxes.
The PTA and the Telecom Industry believe that rationalisation of taxes on Telecom sector can result into better sector growth and, consequently better collections for the government in the long run.
In terms of overall investment in the Telecom sector, the momentum started in fiscal year 2013 for the up-gradation of telecom networks for 3G and 4G services has continued.
Telecom operators have invested a significant amount of $589 million during July - March, fiscal year 2016. The main driver behind this investment is the cellular mobile sector which has invested $557.3 million during the first three quarters of FY 2016.
By the end of March 2016, the total number of mobile subscriptions in Pakistan reached 131.4 million at the end of March, 2016. Biometric re-verification of SIMs last year had an adverse impact on the cellular subscriber base. However, the industry has survived through the tough period and continues to regain subscribers at a fast pace. It is expected that the rise of mobile broadband will also have a catalytic effect on the SIMs sale.
3G and 4G LTE subscribers have reached at 27.87 million at the end of March 2016 as compared to 13.49 million as of June 2015 which shows that on average, there have been more than one million subscriptions to 3G&4G LTE networks per month. More coverage and reduced tariffs will further increase the uptake of 3G and 4G LTE subscriptions.
Broadband subscriber base showed strong growth during the July- March, FY2016. At the end of March 2016, broadband subscribers stood at 30.99 million as compared to 16.89 million at the end of last fiscal year depicting 83 percent growth over the last nine months.
The number of net subscriber additions in the period stood at 14.10 million. Most of the broadband subscriber base belongs to mobile broadband, launched in June 2014, which collectively forms almost 90 percent of the total broadband subscribers now.
DSL, WiMAX, EvDO, HFC and FTTH collectively have 3.13 million subscribers at the end of March, 2016. This disparity in subscriber trends highlights the substitution effect of mobile broadband on the other broadband technologies. In order to further provide impetus to the broadband sector, synergy of various elements is required. Therefore, external factors are also needed to be addressed which includes affordability, computer literacy, religious and cultural views regarding objectionable content on internet and lack of local content.
The total international traffic (incoming + outgoing) stood at 14,545 million minutes during July-Mar FY2016 as compared to 5,643 million minutes during the same period of FY 2015.
The growth of 158 percent is an encouraging sign for the LDI segment. Breakdown of traffic shows that international incoming minutes have increased remarkably with a total volume of 13,125 million minutes in three quarters of FY 2016 as compared to 4,169 million minutes in the entire previous fiscal year. On the other hand, total international outgoing traffic minutes dropped by (3.7 percent) during the July-March 2016 as compared to July-March 2015. The total international outgoing traffic minutes were reported to be 1,424 million during the July-March 2016 as compared to 1,474 million in the same period of previous year, mainly due to the rising trend in using Over-the top (OTT) services for international calls such as Skype, Whatsapp, Viber, Facetime, Line etc.