Telco sector faces record low ARPU, lowest in the world

Pakistani mobile subscribers pay less than $1 per month, the lowest in the world. According to a GSMA analysis, the average revenue per user (ARPU) in Pakistan is less than $1, making it one of the lowest in the world; the worldwide ARPU is $8, while inflation in Pakistan has reached its highest level in 47 years.

The telco ARPU has been declining due to a variety of factors, including competition, price wars, increased smartphone adoption, tax implications, and increased data consumption, in addition to Pakistan’s macroeconomic situation and Pakistani rupee depreciation against the dollar, which has exacerbated the Telecom industry’s situation.

The global ARPU average is more than $8, however it is substantially higher in countries such as the United States, Canada, and Bahrain: $46, $41, and $39, respectively.

According to GSMA Intelligence, Pakistan ranks 267th out of 269 telecom markets analysed internationally in terms of ARPU. While low telecom tariffs have been fantastic for enabling access to tens of millions of new internet users, they have resulted in weak financials that have now limited further expansion and innovation in this industry.

More recently, the sector has entered an existential crisis as a result of significant increases in operational expenses, particularly gasoline, power, loan rates, and currency depreciation.

The report advises the government of Pakistan on taxation, telecom equipment import levies, spectrum, and a telecom licensing plan.