As of September 2005, total mobile subscribers stand at 17.7 million whereas a year ago it was less than 5.5 million, indicating a growth rate of 154% till June 2005. Mobile subscribers per 100 inhabitants of Pakistan is approaching 10.1 (August 05) showing more than three times more penetration than fixed line, which stands at 3.4 per hundred inhabitants of Pakistan.
There is a record growth in the sector and average subscribers addition each month in the total subscriber base is approximately one million.
Correspondingly there has been increase in revenues for the operators. Total revenue earned by mobile operators at the end of year 2004-05 are Rs 58.03 billion, which is almost 40%of total telecom industry revenues for the same period.
Average revenue per subscriber, however, has been on a plunge with current Average Revenue Per User (ARPU) at $6. Decrease in ARPU, mainly, is due to decrease in airtime tariff.
Total investments made in the mobile sector were more than $882 million which is approx. 86% of total investments made in the telecom sector.
In addition, rate reductions by mobile operators have resulted in increase in Minutes of Usage (MoU) per subscriber, including international and domestic incoming and outgoing - for the year 2004-05, total traffic generated on mobile networks was 14.04 billion minutes. Average minute per user per month stands at 155 during the year 2004-05 .
Six mobile operators cover currently more than 350 cities, with highest mobile penetration in Sindh province, which stands at 11%. Similarly, there has been enormous increase in capacity and coverage through installation of new cell sites.
Closely analysing the growth in mobile cellular sector and large un-tapped rural population, it is expected that the exponential growth in mobile sector would continue.
Timely launch of Telenor and Warid, ongoing expansion of Mobilink, renewal of Instaphone license, privatisation of Ufone's parent company PTCL, launch of Paktel GSM and reduction in government taxes and handset prices are all right ingredients for best possible growth patterns any mobile sector can desire. It is estimated that at the end of year 2005, the mobile subscriber base would be around 20 million.
Rapid expansion of mobile networks and unprecedented growth in number of subscribers has resulted in number of issues for the regulator, the operators, public and government.
These include increased environmental hazard due to large number of cell site towers, tax levied by civic bodies for installation of these cell sites, frequency conflict of operators with radio jamming devices, cut throat marketing competition, price wars, data security issues and maintenance of quality of services.
To address these issues accordingly, appropriate polices are needed to be chalked out, such as; sharing of base stations by operators, directing civic bodies to help operators, approval for installation of jamming devices, regulating prices of market leaders, ensuring possible ways for privacy of operator's data, and regular quality of service surveys by regulators and third party assessments for ensuring good quality of services.
Keeping the above highlighted issues in mind there is a possibility that this current upbeat in the sector might slow down.
With high roll out, operational costs and regulatory charges (set-up, licensing etc), the new operators would not like to loose the game.
Similarly current operators also need to keep up with new operators for their competitive edge. Provision of basic cellular service in order to maximise profits may be the main objective of all operators.
To mitigate effects of lower ARPUs and churn rate, the operators would have to expand to unserved areas since mature markets (metropolitan cities) are already showing highest penetration level.
Similarly, product differentiation can be an effective tool to increase subscriber base.
This differentiation may be mobile banking facility, money transfers, payment of utility bills via mobile, internet access at low rates, location based services, content in local language, business on move (corporate emails access) and vehicle tracking system etc.