ISLAMABAD ( BMZ REPORT )
Pakistanis paid Rs 123.47 billion to the government in terms of taxes and duties on telecom services during the Fiscal Year 2015-16 (FY16) pushing total telecom sector contribution to national exchequer up by 25% to Rs157.85 billion.
On the top of all, the government has collected Rs 41.65 billion General Sales Tax (GST) and Rs 81.82 billion in terms of custom duties, Withholding Tax (WHT) and other taxes from the public for using telecom services in FY16.
According to the Pakistan Telecommunication Authority’s (PTA) annual report for FY16, telecom sector has contributed an amount of Rs 157.85 billion to national exchequer in terms of regulatory duties and taxes during FY16, registering 25% yearly growth over contribution of Rs 126.3 billion in FY15.
Telecom companies paid Rs 34.1 billion to PTA in terms of initial and annual license fees, annual radio frequency, spectrum fee, annual spectrum administrative fee, USF and R&D fund contributions, APC for USF, numbering charges, license application fee, etc.
Meanwhile, telecom companies’ revenues remained stagnant in FY16 as total telecom sector revenue registered only 1 percent growth posting Rs 452.9 billion revenues in the said year as compared to Rs 446.3 billion in FY15. However, cellular mobile operators during the fiscal year under review bagged some Rs 348.9 billion as revenue, representing 10 percent yearly growth whereas it had secured Rs 317.1 billion in 12 months during previous fiscal year.
It seems that mobile operators have been overcoming the losses that occurred due to loss of millions of cellular subscribers after Biometric Verification System (BVS), revivification process and intense competition that forced them to lower tariffs in preceding years.
“Cellular mobile operators are offering one of the lowest mobile call charges in the world and the affordability of services has contributed to phenomenal growth in the mobile adoption. All operators are involved in aggressive marketing campaigns and promotions. Therefore, the cellular mobile segment of Pakistan needs a thorough review so that financial viability and health of the segment can be assured” says the report.
Declining tariffs’ trends provided in the PTA’s report shows that effective price of cellular mobile calls in FY 2010-11 was about Rs 1.68 per minute, which has substantially reduced to Rs 0.60 per minute in FY 2014-15 i.e price per minute of cellular mobile call is now almost one third of the price in FY 2010-11.
Foreign direct investment (FDI) in the sector went up enormously by 142 percent in the period under review to $1.29 billion as compared to $ 529 million of net FDI in FY15.
However, investment in telecom sector dropped significantly in FY16 as total investment registered 29 percent decline to $ 719.7 million as against investment in telecom sector about $1001 million in FY15.
According to the breakup, cellular mobile operators invested $659.4 million, Long Distance and International (LDI) sector witnessed $6.3 million investment, and local loop operators invested $54 million while wireless local loop operators did not make any investment.