BMI's Executive Summary

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The Sector At A Glance

Key Insights On The Telecomunications sector of Pakistan

‘Pakistan continues to amaze us.’ These are the words of Orascom CEO Naguib Sawiris when discussing the performance of the operator’s Pakistan unit Mobilink. What Sawiris finds amazing is the continued growth of Pakistan’s mobile market, which is becoming as notable as its neighbour India for its fast growth and its potential for further stellar rises. Indeed, BMI has amended our mobile forecasts for the rest of the decade directly as a result of record growth. In October 2006, Pakistan’s mobile market was home to 2.89mn net additions to its overall cellular subscriber base. This record figure took the number of mobile subscribers to in excess of 44mn. Our projections now suggest that by the end of the year Pakistan will have just over 49mn wireless customers.

From there growth should continue to be rapid. Indeed, BMI expects Pakistan to join the small band of countries with more than 100mn mobile subscribers during 2008. And what is driving this growth? Tremendous consumer demand, high levels of competition and a government that is ready to welcome inward investment. This latter point is seen particularly clearly in Pakistan’s telecoms market, where the analyst can clearly see the footmarks of strategic investors such as Orascom, Etisalat, Telenor and Abu Dhabi Group’s Warid Telecom. It is the success of these investors that has caused the avalanche of growth. However, the introduction of mobile number portability (MNP) should ensure that competition in Pakistan’s wireless market remains stiff. Pakistan’s telecoms regulator, the PTA, will need to monitor the situation very closely as it does not want to see price wars breaking out across Pakistan, with the likely consequence of a deterioration in the quality of the operators’ network services caused by traffic congestion.

Pakistan’s fixed-line and internet markets are slow moving in comparison, The deregulation of Pakistan’s fixed sector has, however, allowed the emergence of alternative operators, many of whom operate using CDMA WLL networks. TeleCard is pushing PTCL particularly closely here.

For the first time since BMI has started to produce Business Environment Rankings, comparing 14 Asia Pacific markets in terms of competitiveness and investor friendliness, Pakistan has fought its way out of the bottom two. It now lies in equal ninth position (with Indonesia), still ahead of Vietnam, but also above Thailand, China and the Philippines. This rise is due to the high levels of competition in Pakistan’s telecoms industry, its immense growth potential and a government that is prepared to encourage FDI. If the PTA launches its 3G licensing programme in 2007, as we expect it to do, we could yet see Pakistan move further up the table. However, any signs of the consumer being compromised by a decline in network standards as a result of traffic congestion, and Pakistan could return into the bottom three. However, we class Pakistan’s telecoms sector, and in particular its mobile market, as being a buoyant industry, and we expect to see further growth, aided by continued consumer demand and government support.

Contents

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Chapter 1 - Executive Summary

Chapter 2 - Business Environment

Asia

Pakistan

Pakistan Telecoms Business Environment SWOT Analysis

Chapter 3 - Industry Forecast Scenario

Fixed-Line

Table: Pakistan Telecoms Sector – Fixed-lines/WLL – Historical Data & Forecasts

Mobile

Table: Pakistan Telecoms Sector – Mobiles – Historical Data & Forecasts

Internet

Table: Pakistan Telecoms Sector – Internet – Historical Data & Forecasts

Chapter 4 - Macroeconomic Forecast Scenario

Table: GDP And Population

Chapter 5 - Country Snapshot: Pakistan Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 6 - Competitive Landscape

Market Overview

Competitor Analysis

Table: Key Companies – Pakistan Telecommunications Sector

Key Players

Fixed Line

Table: Regional Fixed-Line Penetration Overview

Mobile

Table: Regional Mobile Penetration Overview

Internet

Table: Regional Internet Penetration Overview

Market Data Analysis

Fixed-Line

Table: Pakistan Fixed-Line Market, June 2006

Table: Pakistan Wireless Local Loop Market, October 2006

Mobile

Table: Pakistan Mobile Market, October 2006

Table: Pakistan Mobile Market, Net Additions January-October 2006

Industry Developments

Chapter 7 - Company Profiles

Regional Case Study – Motorola

Table: Motorola Net Sales by Region (US$mn)

Table: Motorola Market Sales by Locality of End Customer

Table: Leading Mobile Phone Handset Sales (mn) – Q306

Pakistan Telecommunications Company Ltd (PTCL)

TeleCard

Mobilink

Telenor Pakistan

Chapter 8 - BMI Forecast Modelling

How we generate our industry forecasts

Telecommunications Industry

Sources

Chapter 9 - Appendix: Regional Demographic Data

Table- Manufacturing Wages (ave per annum), US$

Table - Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Competitive Landscape for Asia Telecommunications Reports: Sample of Companies Ranked

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Commentary on key operators highlighting ownership structures, latest available revenue figures, market share analysis and ARPU counts. BMI forecasts for all headline macroeconomic indicators, including real GDP growth, inflation, fiscal balance, trade balance, current account and external debt. Company SWOTS Covering all leading telecommunications operators and manufacturers operating in each market, including competitive intelligence on geographic presence and competitive positioning against local companies; local market share; leading products, services and technologies; foreign direct investments, projects, merger and acquisition strategies.

Network of Asian Telecommunications Sources

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BMI's Asian Telecommunications Reports are based on an extensive network of multilateral organisations, government departments, telecommunications industry associations, chambers of commerce and company reports. Information sources include: