Internal Competition Among Cellular Mobile Operators Is Biggest Hurdle In Revenue growth: Sources

According to official sources, the Internal competition among cellular mobile operators is causing restrictions on Revenue growth.  As a result, the restriction on Average Revenue Per User (ARPU) is hurting the business plans of Mobile operators.

Cellular Mobile Operators Are Facing Revenue Issues Due to Internal competition

The fact is that the telecom sector was deregulated back in 2003. Due to this, there is no restriction from PTA on CMOs to increase ARPU. However, the point worth mentioning here is that this does not include Jazz, which we all know is a significant market player (SMP). It requires prior approval for changes in tariff to avoid disturbance in the market.

Reports claim that CMOs during the National Assembly Standing Committee on Information Technology and Telecommunication demanded a 250% increase in ARPU in order to meet growing expenses. Moreover, they said that they cannot compete with the EU or US. CMOs representative has clearly stated that they do not need any other relief, but just increase the ARPU from the current 80 cents to two dollars.

The point notable here is that Pakistan telecom market is de-regulated and the government of Pakistan cannot intervene except for SMP. According to the rules, SMP cannot be given free hand because it can result in a disturbance in the market even by lowering tariffs massively. Due to the fear of subscribers’ loss, CMOs are quite reluctant to increase rates by themselves. Official Sources stated:

“If one operator will increase package price it may result in losing subscribers and that is why all are looking at each and competing to attract more subscribes even at lower rates and apparently presenting the case at various forums being a low friendly market for the telecom industry, which actually is not. “

As a result of the rising number of Internet subscribers, there is no doubt that a major chunk of mobile operators’ revenue comes from the provision of data services. The point noted here is that the share of data revenue in the gross revenue that was generated by mobile operators increased from 38% in the fiscal year 2017-18 to 61% in 2021-22. PTA report claims that Jazz ARPU was Rs 253, Ufone Rs 205, Zong Rs 216, Telenor Rs 178, and the total was Rs 220 per month during 2021-22.

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