Telecom contributes a bigger slice to the budget pie this year

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Telecom sector is one of the most potential sectors that remained important contributor to the national economy by depositing Rs 363 billion during the year 2012 and showed increase of 5.4 percent compared to last year. In line with the teledensity the cellular sector also has the highest share in telecom revenue as during 2011 cellular revenue increased by 11 percent to reach Rs 262,761 million as compared to Rs 236, 047 million in the previous year. During the first two quarters of 2012, Rs 197,686 million worth of revenue has been generated by the telecom sector.
According to the report of Pakistan economic survey 2011-12, companies have invested more than US$ 12 billion in building of infrastructure and other projects in the last six years. In 2011, the telecom sector invested US$ 495.8 million with the cellular mobile sector being the major contributor. In addition USF invested Rs 3.5 billion in the 2011.
The telecom sector made its higher contribution to the national exchequer in 2011 as almost Rs 117 billion deposited by the telecom companies showering 7% growing in 2011.
According the report, foreign direct investment (FDI) by the telecom companies is more than 30 percent of the total foreign direct investment in the country during last six years.
Owing to terrain/security situation companies were reluctant to invest further however in 2011 telecom sector attracted over US$ 79 million FDI in the country which is about 5 percent of the total FDI in Pakistan in 2011.
Despite all the factors the cellular industry managed to double its growth rate from the previous year and according to the World Economic Forum’s Global Information Technology Report 2101-11 Pakistan ranks no 1 in the internet and telephony competition. The total of mobile subscriber reached 118.3 million at the end of 2012.
The mobile market over the years has come more stable due to intense competition. Market shares are now more balanced among the five operators with almost insignificant changes over the years. At the end of March 2012 Mobilink had a market share of 30.25 percent followed by Telenor with 24.80 percent and Ufone with 19.54 percent.
The auction of 3G license is expected that will bring more investment into the country and improved economic condition of the country would further encourage investors to bring the capital into the country. Economic survey further revealed that teledensity in the country stood at 68.3 percent showing 6.7 percent growth as compared to the previous year. Since the mobile sector contributes over 95 percent to the total density of the country an increase in mobile penetration from 60.4 percent in 201-11 to64.9 percent in 2012-12 resulted into improvement of 4.3 percentage points in total density. Fixed teledensity has been declining over the year due to mobile substitution and today it stands at 1.93 percent in 2011-12 as compared to 2.1 percent last year showing a decrease of 0.17 percent.