Cellphones outstripping fixed lines: Pakistan cements position as world’s fastest growing telecoms market

22 Oct 2004

The number of people owning a mobile phone in Pakistan has outstripped the number of traditional copper land lines for the first time, helping it to consolidate its position among the leading growth markets for telecoms around the globe. At the end of September the total number of mobile phones in the country stood at 6.13 million, compared with 4.46 million fixed lines, with the relative teledensity rates standing at 4.13% and 3% respectively. According to the telecoms regulator, the Pakistan Telecommunication Authority (PTA), the successes of the last decade have been driven in large part by the arrival of three foreign-backed wireless operations – Mobilink, Paktel and Pakcom – which collectively control over four million cellular users. Mobilink, backed by Orascom of Egypt, leads the way with just under 3.81 million subscribers, while MIC-backed Pakcom (Instaphone) and Paktel claim 544,000 and 488,000 subscribers respectively. Meanwhile U-Fone, the mobile arm of national fixed line operator PTCL reported 1.3 million users, a market share of 21%.

The situation in Pakistan is a marked contrast from even five years ago when the total number of wireless users stood at just 280,676. The popularity of cellular services has been attributed to the convenience and availability of services, the introduction of pre-paid services, the inception of a calling party pays (CPP) regime, and strong sector competition. Indeed, competition is set to intensify in 2005 with the arrival of two new players Warid Telecom and Telenor Pakistan. The former is backed by a group of UAE-based investors, including the Abu Dhabi Group, led by His Highness Sheikh Nahayan Mabarak Al Nahayan. Warid was issued with a GSM concession in April 2004 after South Korea’s Space Telecom, which had initially been awarded the licence, failed to pay the first instalment of the licence fee. Its chief operating officer Hamid Farooq says the company plans to launch phase one of its rollout in the first half of next year and has earmarked USD140 million to USD150 million in investment. It hopes to install a network with capacity for 1.5 million customers. Meanwhile, Telenor Pakistan, a wholly owned subsidiary of Norway’s Telenor, plans to launch by 1 April 2005, covering 70% of Pakistan’s population by its fourth year of operation. In July 2004 it selected Nokia to build out its network, which will include the facility to seamlessly upgrade to a 3G network based on W-CDMA technology.

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