Pakistan - Telecoms, Mobile and Broadband - Statistics and Analyses

Pakistan's telecom market had been struggling for a long time with the transition from a regulated state-owned monopoly to a deregulated competitive structure. Foreign investment has been an important factor in Pakistan's telecom sector.

Despite the government's promotion of internet and expansion of universal internet access throughout the nation over the past decade, internet penetration has remained relatively low in global terms.

The fixed line market in Pakistan remains underdeveloped due to the dominance of the mobile segment. Further, the number of fixed telephone lines is slowly declining as the mobile segment continues to expand. The market is predicted to decline further over the next five years to 2024 as the mobile segment continues to grow for both voice and data/broadband usage.

Like in many countries in Asia, both businesses and government agencies in Pakistan are opening up to the benefits of third party data centres for both public, private and hybrid cloud deployments. Data centres are established in Pakistan's three largest cities of Karachi, Lahore, and Islamabad. Telcos with data centres include: Telenor, Zong, Ufone. Major data centre clients include web hosting service providers, banks and other financial institutions. The major global social media platforms such as Facebook have some presence in Pakistan's data centres.

The struggling fixed-line market in Pakistan is dominated by Pakistan Telecommunications Company Ltd (PTCL). The only other provider with a significant customer base is NTC.

Examples of IoT applications in Pakistan are solar-powered home services enabling rural households outside of the grid to power TV sets, mobile phone chargers and other electronic devices. Mobile operator Zong launched the Zong 4G Smart Car' solution in Islamabad.

Despite the efforts of the government to stimulate growth in the internet segment of the telecommunications market, for a long period it has remained a fairly sluggish component of Pakistan's overall telecoms sector. The data and internet service sector has been opened up for private operators to invest and operate services in the country.

Fixed broadband penetration in Pakistan remains very low mainly due to the dominance of the mobile platform. Also, the limited and declining number of fixed lines in Pakistan is restricting more widespread development of fixed broadband. Penetration increased from 0.4% in 2010 to 1.9% in 2014, but then dropped 1.0% in 2019. Over the next five years to 2024 low growth is expected from this small base.

DSL dominates the fixed broadband market. Its market share has been falling over the past five years. HFC and FTTH have seen rising numbers, however each still constitute for a very low market share of the overall fixed broadband market.

The Universal Service Fund (USF) and Ufone signed a contract for a project of seamless broadband coverage on the Makran Coastal Highway. It is the first scheme under the Next Generation Broadband for Sustainable Development program with focus on broadband coverage in order to allow seamless operations.

Pakistan's mobile market has experienced moderate growth over the last six years. Mobile growth opportunities in Pakistan have been very substantial due to a young population and rising penetration of mobile services. Slow to moderate growth is predicted over the next five years to 2024. The market will be constrained from higher growth due to very strong local competition.

The country's mobile operators are all fighting for a larger share of the market, forcing down prices and subsequently Average Revenue Per Unit (ARPU). The operators have been shifting their focus to Value Added Services (VAS) in order to improve revenues.

Mobilink and Warid merged their operations into a single brand, Jazz, which saw the number of mobile operators reduce from six to five. Further market consolidation is predicted over the next five years as the operating margins of the major operators come under further pressure.

Pakistan has seen a dramatic increase in mobile broadband penetration over the past five years. However, the mobile broadband market is still at an early stage of development with penetration well below most other Asian countries. Strong growth is predicted over the next five years to 2024, driven by further adoption of 4G and eventually 5G services.

In 2019 the Pakistan Telecommunication Authority (PTA) published guidelines for issuing temporary 5G authorisations to service providers, vendors and research organisations. Zong announced that it was the first MNO to successfully test 5G in Pakistan. It staged the trial at its headquarters in Islamabad, and generated download speeds in excess of 1Gbps.

BuddeComm notes that the outbreak of the Coronavirus in 2020 is having a significant impact on production and supply chains globally. During the coming year the telecoms sector to various degrees is likely to experience a downturn in mobile device production, while it may also be difficult for network operators to manage workflows when maintaining and upgrading existing infrastructure. Overall progress towards 5G may be postponed or slowed down in some countries.

On the consumer side, spending on telecoms services and devices is under pressure from the financial effect of large-scale job losses and the consequent restriction on disposable incomes. However, the crucial nature of telecom services, both for general communication as well as a tool for home-working, will offset such pressures. In many markets the net effect should be a steady though reduced increased in subscriber growth.

Although it is challenging to predict and interpret the long-term impacts of the crisis as it develops, these have been acknowledged in the industry forecasts contained in this report.

The report also covers the responses of the telecom operators as well as government agencies and regulators as they react to the crisis to ensure that citizens can continue to make optimum use of telecom services. This can be reflected in subsidy schemes and the promotion of tele-health and tele-education, among other solutions.

Key Developments

Both businesses and government agencies in Pakistan are opening up to the benefits of third party data centres

The fixed line market is predicted to decline further over the next five years to 2024.

Fixed broadband penetration in Pakistan remains very low mainly due to the dominance of the mobile platform.

The Universal Service Fund (USF) and Ufone signed a contract for a project of seamless broadband coverage on the Makran Coastal Highway.

Pakistan has seen a very strong increase in mobile broadband penetration over the past five years.

Pakistan's MoIT is aiming to introduce commercial 5G services before 2020.

Report update includes an assessment of the global impact of COVID-19 on the telecoms sector

Key companies mentioned in this report:

Pakistan Telecommunication Co Ltd (PTCL); Ufone (PTML, PTCL's subsidiary); Telenor Pakistan; Warid Telecom; Zong; WorldCall; TeleCard; PakNet; Wateen Telecom (subsidiary of Warid Telecom); Mobilink; NayaTel; Wi-Tribe; National Telecommunications Corp (NTC), Instaphone

Phil HarpurOctober 2019