Why 3G/4G Subscribers Are Declining in Pakistan and How to Fix It?

In a concerning trend that has caught the attention of telecommunications experts and policymakers alike, Pakistanโs 3G/4G subscriber base has shown a significant decline over the past year.
The number of 3G and 4G users in Pakistan declined toย 138.496 million by the end of December 2024 from 139.037 million in November, according to data from the Pakistan Telecommunication Authority (PTA).
The Pakistan Telecommunication Authority (PTA) reported a slight decline in teledensity and 3G subscriber base in December 2024. Teledensity, which measures the number of telecom connections per 100 individuals, dipped from 80.1% to 80%.
Operator-wise Performance:
- Jazz: Experienced a significant drop in 3G users (to zero) and a slight decrease in 4G subscribers.
- Zong: Witnessed a minor decline in 3G users but saw an increase in 4G subscriptions.
- Telenor: Reported a decrease in 3G users while maintaining a steady 4G subscriber base.
- Ufone: Showed a decline in 3G users but experienced a slight growth in 4G subscriptions.
Economic Constraints and Inflation
Economic pressures have emerged as the primary driver behind this unprecedented decline. Pakistanโs inflation rate, which recorded all-time high of 37% in 2024, has severely impacted consumersโ purchasing power. The average cost of a 4G-enabled smartphone in Pakistan now represents approximately 40% of the average monthly income in urban areas and up to 70% in rural regions. This economic burden has forced many consumers to postpone device upgrades or opt for more basic feature phones, effectively reducing the potential 3G/4G user base.
โThe decline in 3G users across all operators indicates a continued shift towards 4G technology.โ
The telecommunications sector has been particularly hard hit by the depreciation of the Pakistani Rupee, which has increased the cost of imported network equipment and smartphones. Major telecom operators report that their capital expenditure costs have risen by up to 60% in the past 18 months, leading to delayed infrastructure investments and network expansion plans. This financial strain has created a ripple effect throughout the industry, affecting both service quality and accessibility.
Service Quality Issues
Service quality issues have further exacerbated the situation. According to a recent Quality of Service (QoS) survey conducted by the PTA, only 68% of mobile internet users reported satisfaction with their service reliability, down from 76% in the previous year.
Network coverage remains particularly problematic in rural and semi-urban areas, where approximately 60% of Pakistanโs population resides. The survey identified significant coverage gaps in over 3,000 villages across all provinces, highlighting the digital divide that continues to plague the nation.
Connectivity Issues in Rural Areas
Inadequate infrastructure in rural and remote areas significantly limits the expansion of 3G/4G services. Many potential users in these regions face connectivity barriers due to limited network coverage and signal strength. This lack of access hinders overall growth in mobile internet adoption and slows down the digital inclusion of rural communities.
Saturation in Urban Markets
In urban areas, the market for 3G/4G services is nearing saturation. A large portion of the population already subscribes to these services, leaving limited room for acquiring new subscribers. This saturation impacts the overall growth of 3G/4G subscriber numbers, as the pool of potential new customers in urban areas is shrinking.
Migration to Alternative Technologies
The growing availability of alternative technologies like fiber broadband and the ongoing rollout of 5G networks are attracting users away from traditional 3G/4G mobile internet services. These faster and more reliable options provide a compelling alternative for users who require higher bandwidth and lower latency. This migration to alternative technologies can contribute to a decline in 3G/4G subscriber numbers as users opt for more advanced connectivity solutions.
Measures To Address These Challenges
Industry experts and government officials have proposed several solutions to address these challenges. The Ministry of Information Technology and Telecommunication has announced plans to introduce a device financing scheme, which would allow consumers to purchase 4G smartphones through installment plans with minimal interest rates. This initiative aims to make modern devices more accessible to lower-income segments of the population.
Telecom operators have begun implementing more flexible pricing strategies, including specialized packages for different user segments and time-based pricing models. Jazz, Pakistanโs largest mobile operator, recently introduced โsmart subsidiesโ for 4G devices, targeting first-time smartphone users in rural areas. These initiatives have shown promising early results, with a 12% increase in 4G adoption rates in pilot regions.
Infrastructure investment remains crucial for long-term growth. The Universal Service Fund (USF) has allocated PKR 32 billion for the current fiscal year to expand mobile broadband coverage in underserved areas. This investment is expected to benefit approximately 8 million people across 235 rural union councils. Additionally, the PTA has introduced stricter quality of service requirements for operators, with increased penalties for non-compliance.
Customer retention has become a key focus for operators, with new programs offering loyalty rewards, data rollover options, and enhanced customer service. Zong and Telenor have implemented AI-powered customer service solutions to improve response times and service quality, resulting in a 25% improvement in customer satisfaction scores.
Strategies to Restrict this Decline
Looking ahead, the acceleration of 5G deployment could provide a much-needed boost to the sector. The government has announced plans to auction 5G spectrum by the end of 2024, with commercial services expected to launch in major cities by 2025. This technological advancement could help operators optimize their network resources and provide better quality services to existing 4G users.
The phasing out of 3G services, while controversial, is being considered as a strategy to encourage migration to more advanced networks. The PTA has proposed a gradual phase-out plan over the next three years, with incentives for users to upgrade to 4G or 5G services. This transition would free up valuable spectrum resources and reduce operatorsโ maintenance costs for legacy networks.
Industry analysts suggest that the current decline in 3G/4G subscribers could be temporary if the proposed solutions are implemented effectively. The key to recovery lies in addressing the affordability challenge while maintaining investment in network infrastructure. Success will require coordinated efforts from all stakeholdersโgovernment, operators, device manufacturers, and consumers.
Additional Recommendations
Device Sharing Programs
To make 4G technology more accessible, local mobile shops could introduce innovative rental programs allowing customers to test 4G phones before making a purchase decision. These shops could offer short-term device rentals for 3-5 days at affordable rates.
Additionally, telecom companies could introduce family-sharing plans where multiple family members can share a single data pool, reducing overall costs. In rural areas, community internet centers could be established where residents can access 4G internet at subsidized rates, similar to the old PCO system but modernized for data services.
Digital Skills Training
A comprehensive digital literacy program could be implemented nationwide, focusing on free workshops conducted in Urdu and regional languages. These sessions would cover basic smartphone operations, internet usage, and popular apps. By partnering with local educational institutions, the program could reach young people effectively.
The training would emphasize practical benefits, such as how using internet-based communication apps can reduce phone bills. For instance, demonstrating how a family could save hundreds of rupees monthly by switching from traditional calls to WhatsApp for international communications.
Special Packages for Students
Educational-focused internet packages could revolutionize how students access online resources. These packages would offer discounted rates during typical school hours (8 AM to 3 PM) and provide extra data allowances for accessing educational websites and learning platforms.
Telecom companies could partner with universities to integrate internet packages into semester fees, ensuring students have consistent access to online resources. This approach would be particularly beneficial for distance learning programs and virtual classrooms, making education more accessible and affordable.
Job-specific Internet Solutions
Tailored internet packages could address the unique needs of different professional groups. Small business owners could receive packages with enhanced data limits for social media marketing and inventory management apps.
Delivery riders and taxi drivers could access specialized plans with reliable coverage and GPS optimization. Home-based workers, including freelancers and remote employees, could benefit from packages offering stable connections during peak working hours and increased upload speeds for video conferencing and file sharing.
Path Forwardโฆ
As Pakistan strives to achieve its digital transformation goals, the revival of mobile broadband growth remains crucial. The coming months will be critical in determining whether the proposed interventions can effectively reverse the current decline and put the country back on track toward increased digital inclusion and connectivity.
The telecommunications industry stands at a crossroads, with the potential to either overcome these challenges and emerge stronger or risk falling further behind in the global digital race. The decisions made and actions taken in the near term will have lasting implications for Pakistanโs digital future and its ability to compete in an increasingly connected world.
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