Pak-telecom sector rises, offers opportunities for investors

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ISLAMABAD: The telecom business in Pakistan has shot up yielding big taxes for the government, pushing the economy to expand and offering big opportunities to investors, said a new report.

According to Kahleej Times, the telecom sector in Pakistan is doing prospering business with revenues of Rs 333.2 billion for July to March FY-16 after travelling a bumpy road a year ago.

The report said that it was the time when government launched an anti-terrorism campaign to cancel millions of suspected SIM cards. Due to loss of millions of these cellular subscribers after BVS re-verification process, intense competition and low tariffs and a declining trend in revenues of the telecom sector was observed since last year.

The Finance Ministry and Pakistan Telecommunication Authority (PTA) reported that during the last five years, fiscal year 2011 to fiscal year 2015, the telecom sector has contributed Rs 744.6 billion to the national exchequer in the form of various taxes and duties.

Sources said that in the first three quarters, July to March of fiscal year 2016 alone, the sector contributed Rs 105.9 billion adding that the reduction in tax rates as well as rationalisation of taxes on telecom sector can result into better sector growth and consequently better collection for the government in the long run.

“These telecom revenues are a big golden apple in the government’s budget. It yields more cash than several big industries. So, I doubt, if a major cut is on the cards,” Finance Ministry official said.

According to PTA, “The investment in the telecom sector in its boom period of fiscal year 2013 to March 2016 with a total of $4 billion. The period saw the number of cellular subscriber rise to 131.4 million out of an officially estimated population of 180 million and it is still rising.”

At the end of March 2016, the number of 3G and 4G LTE subscribers was 27.87 million up from 13.49 million as of June 2015. It indicates that the subscribers have been added by more than one million a year.

The broadband subscriber base showed a strong growth. At the end of March 2016, their number stood at 30.99 million, up from 16.89 million as on June 30 FY-15. Most of the broadband subscribers belong to mobile broadband, launched in June 2014.

The number collectively forms almost 90 percent of the total broadband subscribers as at now. The total international traffic including incoming and outgoing, rose to 14,545 million minutes during July-March of fiscal year 2016 up from 5,643 million minutes in the like period of fiscal year 2015 showing a 158 percent growth.

Source: APP

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