Telecom Sector Witnesses Decline in Revenues for the Fiscal Year 2015-16

According to the economic survey 2015-16, cellular mobile operators invested $557.3 million to upgrade their 3G/4G broadband networks in the first nine months (July 2015 to March 2016) of the outgoing fiscal year, but revenues continued to decline.The sector’s monthly revenue has declined by Rs1.6 billion per month in the outgoing fiscal year compared to the previous fiscal year.

Telecom Sector Witnesses Decline in Revenues for the Fiscal Year 2015-16

From the month July to March, the total investment observed was $589. It covers the investment from entire sector which includes Long Distance and International and Local Loop segments.

The survey says that:

 “…operators are adding back customers that were lost due to blocking of SIMs during biometric re-verification drive last year.”

Possible Reason for Decline:

One of the major reason for the decline in the investment is the heavy taxes paid by the cellular companies. Telecom sector has paid a sum of Rs105.92 billion in duties, taxes and levies to the national exchequer in 9MFY16. This calculation suggests that full-year tax payment to the government would surpass previous fiscal year’s taxes of Rs.126.26 billion with the addition of last quarter (Apr-June 2016) taxes – estimated to be Rs. 35.30 billion.

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Ray of Hope:

The survey suggests that 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.

PTA survey also gives the ray of hope by proving the increased number of people from the last year. At the end of April 2016, the number of mobile phone users has surged to 132.65 million as compared to 114.65 million at the end of the previous fiscal year on June 30, 2015.

Telecom Policy 2015 is aimed at facilitating the attainment of an all-embracing national agenda and to transform Pakistan into an economically vibrant, knowledge-based, middle-income country by 2025.