Telecommunication sector has faced a massive decline in foreign direct investment, as opportunities are limited in the said sector due to stiff competition and lack of technological moderation. Therefore, State Bank of Pakistan in its annual report for the year 2010-11 anticipated that in the absence of increase in network coverage the growth in telecom sector is likely to decelerate further.
The sector is bent upon expanding the range of services for improving revenues and this strategy has resulted in tough competition, leading to very high marketing costs and declining operating margins of service providers. A continuation of this trend is likely to increase market saturation and further weakening of profitability, the report said, adding that in 2010-11 FDI in IT and telecom stood at minus $34.1million.