GSMA has recently released a report that states that the majority of the population i.e. 59.7% of the population ( approx. 120 million people) in Pakistan are still unconnected to a mobile network.
According to GSMA this suggests for significant investment to drive the expansion of the mobile market, and to improve the affordability of services for consumers. In the report, it further states that, “Unique subscriber mobile penetration in Pakistan stood at 40.3% in 3rd quarter 2018, which is the lowest level in South Asia.”
Despite the numbers over the past decade the mobile market in Pakistan has demonstrated a significant growth. Between the time period of 2008 to 2018, the mobile market in Pakistan has expanded with the number of unique subscribers increasing by 37.4 million (85.1%).
The Mobile sector has greatly expanded in Pakistan with a significant capital expenditure by mobile operators that have made annual capital investments equivalent to around 25% of their revenue during the last decade. According to the report by GSMA, the total mobile sector revenues in 2017 were $3.4 billion that were equivalent to 1.1% of Pakistani gross domestic product (GDP), while the sector contributed approximately $1.8 billion of direct economic value to Pakistan in 2017 (0.6% of GDP).
However, the report stated that this contribution to GDP is relatively low as compared to international benchmarks. Therefore there is a considerable scope for expansion that has been suggested as majority of the population is still unconnected to a mobile network. The unique subscriber mobile penetration in Pakistan in 2018 stood at 40.3% in Q3 and is the lowest level in South Asia.
It is to be noted that facilitating the growth of the mobile sector also aligns with the new government’s economic objectives.
The report by GSMA also states further improvements in affordability of mobile services and devices would contribute to mobile market expansion and development of the digital economy in Pakistan. Currently, for the bottom 20% and 40% income groups in the country is above the “1 for 2” United Nations (UN) affordability target.
Another challenge that arises in purchase of mobile handsets is the upfront cost of a handset especially for those lower-income Pakistanis who do not have access to finance, which would enable them to pay the cost of a mobile phone in installments.
Furthermore, the affordability of handsets in Pakistan is to be further impacted by the upcoming regulatory and tax changes as there is a chance of increase in taxation of handsets in the Supplementary Bill 2019. The “Device Identification Registration and Blocking System” (DIRBS) that has been recently launched by the Pakistan Telecommunication Authority (PTA) could also potentially increase the average price of a mobile phone on the Pakistani market.
