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Pakistan - Market Intelligence Report

Market Intelligence Reports provide an invaluable mix of vital market data and background information, including telecoms regulation.
Published: June 2005
Pages: 44

During 2004, Pakistan's fixed-line telecommunications services market was comprehensively liberalised, with 12 companies issued with licences to operate long-distance and international (LDI) services, 36 companies issued with local loop (LL) licences, and 18 companies issued with wireless local loop (WLL) licences. Some companies hold more than one type of licence. In addition, two new digital cellular telephone licences were issued, giving Pakistan a total of six cellular operators. Furthermore, well over 600 licences have also been issued over the years, to value-added services providers, card-operated payphone network operators, and Internet service providers (ISPs).

Pakistan Telecommunication Company Ltd (PTCL), the incumbent state-controlled fixed-line operator, is now being forced to do business on a more level playing field than has been apparent in the past. It has recently published its first-ever reference interconnection offer (RIO), enabling its competitors to connect with its national backbone on a non-discriminatory basis, and this should stimulate growth in the nascent broadband market.

A 12% stake in PTCL is in the hands of employees and a limited number of private investors. At the time of writing, the authorities had just completed the sale of 26% of PTCL on the open market. The successful bidder for the stake was Emirates Telecommunications Corporation (ETISALAT) of the United Arab Emirates, which paid US$2,570 million in partnership with Dubai Islamic Bank. An offering of these shares had been planned since 1996, when PTCL was established in its present form, but each sale has ultimately been derailed by shifting political agendas, a see-sawing economy, and vociferous opposition from employees and their unions. Indeed, the latest sale had been called-off at the eleventh hour as a result of a widespread strike by employees. The government quickly redrafted the tender documents to protect jobs at the already overstaffed company, but the new owners may be forced to make drastic staff reductions at some point in the future.

Aside from its national backbone and nationwide local loop network (serving 5.072 million fixed lines as of March 2005), PTCL operates one of the country's largest and most successful cellular telephone networks. Doing business as Ufone, the network served 2.191 million subscribers in April 2005, behind market leader Mobilink (owned by Egypt's Orascom Telecom Holding). Two Millicom-owned companies, Paktel and Pakcom, take fourth and fifth positions, each with little more than half a million subscribers. The two new cellular entrants are privately-owned Warid Telecom and Telenor Pakistan, a subsidiary of Telenor of Norway; both new entrants launched their services in the first half of 2005 and Telenor Pakistan has already become the country's third-largest cellular operator.

The long-awaited liberalisation of the market should serve to improve the availability of telecommunications services nationwide. As of April 2005, there were 3.33 fixed-lines per 100 population, and 0.13 WLL connections per 100 people. Cellular penetration overtook that of fixed-line penetration early in 2004 and stood at 6.91 cellular telephones per 100 people in April 2005. Clearly, there is considerable room for expansion in Pakistan, making the high level of interest in the cellular, LDI, LL, and WLL licences in 2004 somewhat unsurprising.

This report contains profiles on the following organisations: Pakistan Telecommunication Authority; Burraq Telecom; Callmate Telips Telecom; Dancom Pakistan; DV Com; National Telecommunication Corp; Pakcom; Paktel; Pak Datacom; Pakistan Mobile Communications (Mobilink); Pakistan Telecommunication Company Ltd; Pakistan Telecommunication Mobile Ltd (Ufone); TeleCard; Telenor Pakistan; Warid Telecom; Worldcall Telecommunications; Carrier Telephone Industries; Frontier Cable Industries; Telephone Industries of Pakistan.

 


 

This Market Intelligence Report was produced as part of
Communications Markets Analysis (CMA).

For more information on CMA, click here.