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Majority of the Population in Pakistan is Still Unconnected to a Mobile Network: GSMA

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The majority of the population (59.7% of the population, or 120 million people) in Pakistan is still unconnected to a mobile network, suggesting for significant investment to drive the expansion of the mobile market, and to improve the affordability of services for consumers, says GSMA. 

“Unique subscriber mobile penetration in Pakistan stood at 40.3% in 3rd quarter 2018, which is the lowest level in South Asia”, GSMA states in its latest report on Pakistan

Majority of the Population in Pakistan is Still Unconnected to a Mobile Network: GSMA

 The mobile market in Pakistan has demonstrated significant growth over the past decade; however, a significant share of the population remains unconnected to mobile services.

 The mobile market in Pakistan has expanded rapidly over the past decade, with the number of unique subscribers increasing by 37.4 million (85.1%) between 2008 and 2018.

 Mobile sector expansion in Pakistan has been driven by significant capital expenditure by mobile operators, who, on average, have made annual capital investments equivalent to around 25% of their revenue during the last decade.

 The report further states total mobile sector revenues were $3.4 billion in 2017, equivalent to 1.1% of Pakistani gross domestic product (GDP), while the sector contributed approximately $1.8 billion of direct economic value to Pakistan in 2017 (0.6% of GDP).

 This contribution to GDP is relatively low compared to international benchmarks, suggesting considerable scope for expansion. The majority of the population (59.7% of the population, or 120 million people) is still unconnected to a mobile network. Unique subscriber mobile penetration in Pakistan stood at 40.3% in Q3 2018, which is the lowest level in South Asia.

 Further significant investment is required to drive the expansion of the mobile market and to improve the affordability of services for consumers. In particular, a focus on expanding network coverage, and investments in the quality of data services, could accelerate the growth of the sector in Pakistan.

 Facilitating the growth of the mobile sector aligns with the new government’s economic objectives, which are set out in the PTI Manifesto and the PTI Digital Policy 2018.

 These include achieving inclusive economic growth, creating new jobs, and transforming Pakistan into a knowledge economy. In this context, incentivising further investment to improve the availability and quality of mobile networks, as well as improving the affordability of mobile services, should become a policy priority for the government, particularly given the low level of unique mobile subscriber penetration, and a very low level of fixed broadband penetration in Pakistan (9 subscriptions per 1,000 people in 2017).

The report states further improvements in affordability of mobile services and devices would contribute to mobile market expansion and development of the digital economy in Pakistan For the bottom 20% and 40% income groups of the Pakistani population, the total cost of mobile ownership (for both low and medium consumption baskets) is above the “1 for 2” United Nations (UN) affordability target (1 GB of data costing less than 2% of monthly income).

Moreover, an upfront cost of a handset represents an affordability challenge for those lower-income Pakistanis who do not have access to finance, which would enable them to pay the cost of a mobile phone in installments.

 The affordability of handsets in Pakistan may be impacted in the near future by upcoming regulatory and tax changes. For example, a proposed increase in taxation of handsets in the Supplementary Bill 2019 would increase the price of mobile phones in Pakistan.

 In addition, the “Device Identification Registration and Blocking System” (DIRBS) recently launched by the Pakistan Telecommunication Authority (PTA) could increase the average price of a mobile phone on the Pakistani market, as legal handsets are generally more expensive than counterfeit and illegal devices, unless it is mitigated by government measures, aimed at improving the affordability of handsets.

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