Home News Telecom Industry 2015 Update: Telenor and Zong Leading the Market

Telecom Industry 2015 Update: Telenor and Zong Leading the Market

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Telecom Industry 2015 Update: Telenor and Zong Leading the Market

The Biometric SIM Verification was seen by many as a set back for the growth of cellular penetration in Pakistan, as the country five operators were to loose their subscribers. However, this turned out to be a mirage as Pakistan still stand as amongst leading country in the region due to its largest mobile network user base i.e. still more than 134 million users are on the mobile phones, according to the March 2015 stats provided by Pakistan Telecommunication Authority (PTA). Pakistan Cellular Tele-density stands at 72% with industry divided between five telecom operators.

After the launch of 3G/4G in Pakistan, the mobile industry has underwent fundamental structural changes. The operators have invested $1.8 billion on relevant infrastructure upgrade licensing fees in 2014. After that 3G/4G subscriber base has grown slowly with presently 10% of the subscribers actively using 3G/4G services in Pakistan.

Bio-metric SIM Verification: was it reason for decreased revenues

The recent terrorist activities in Pakistan has led the Government to verify all the un-registered or un-verified SIMs for security reasons. The cellular companies of the country have successfully completed the Biometric Verification of SIMs within the deadline that was provided to them by the interior ministry. The official sources confirmed that out of 103 million active SIM cards, the operators successfully verified 75.5 million, whereas some 27.5 million were blocked. The Government also asked the operators to re-verify the subscriber’s data, regardless of whether the SIMs were dormant or active.  As around 21 million SIMs were verified.

Also Read: Cellular Operators Successfully Completes SIM Verification Process

The outcome of verification process led to a small drop in user base. The exercise came at an additional cost of bio-metric verification equipment. The mobile mobile operators while may have seen drop in customers but there has been some decrease as well in its financial performance in 1QFY2015.

Telenor & Zong Leading the Market

The previous market giants Mobilink, Ufone, and Warid have lost their market shares to Zong and Telenor. In last two years, Zong’s performance has been improved and it has emerged as the the fastest growing mobile operator in Pakistan. On the other hand, Telenor has the largest 3G subscribers in the country mostly because of its user locations in cities.  According to March 2015 stats of PTA Telenor has 3,530,421 3G subscribers, while Zong holds second place with 2,921,021 3G subscribers.

Telecom Industry 2015 Update: Telenor and Zong Leading the Market

Also Read: 3G/4G Subscribers Reach 12 million by the End of March, 2015

It is also expected that Telenor’s position will be further enhanced due to its recent collaboration with Facebook for bringing internet.org in Pakistan, s millions of customers will be attracted towards free internet.

Mobilink’s Financial Report of 1st Quarter 2015

Mobilink has recently announced financial results of its first quarter. Its revenue declined by 4% to PKR 24 Billion compared to PKR 24.9 of last year. Major reasons behind the fall in revenue are attributed to the current SIM verification campaign by PTA and lower Value Added Services revenue.

Mobilink stood third for its 3G subscriber’s base, after Telenor and Zong. Nevertheless, there is tough competition in the market with major players as Telenor and ZONG in network coverage and voice/data packages; which will continue to put downward pressure on the financial performance.

Increased Smartphone Penetration has been observed

In comparison to past few years, an increase in the smartphone penetration has been witnessed, which is now 17%. The IT Ministry has further promised to lower the import duties on smartphones in order to make the devices more affordable and accessible.

According to Mobilink, the fundamental reason behind the fall in revenue of operators in first quarter of 2015 is due to the current SIM verification campaign by PTA.