3G on the way in Pakistan as penetration rate creeps up

Growth has been steady in Pakistan although there have been setbacks to the country’s 3G licensing process which is due to take place this year, according to BMI.

In H111, Pakistan’s mobile industry grew by 6.0%. The country’s mobile subscriber base grew to 108.89mn. For 2011 as a whole, Pakistan’s mobile customer base grew by just over 12% to reach 115.2mn, a penetration rate of just over 65%. In future, the relatively low penetration of mobile services - especially in rural regions – will likely encourage mobile operators to continue expanding their network and pursue subscribers aggressively.

Recent noteworthy developments in Pakistan’s telecoms market include the news in September that the government had formed a cabinet committee, with responsibility for resolving the dispute over auction of 3G licences. Pakistan's government previously revealed plans to issue the country’s first 3G concessions in October, expressing hopes that the sale process would generate as much as US$1bn. However, the government failed to meet this target date and the licensing process will not occur until 2012.

Around 500,000 3G subscribers are forecast for the end of 2012. This number has potential to increase rapidly over the next few years and new forecasts predict around 3.5mn subscribers at the end of 2016.

Also, in September 2011 the chairman of Pakistan’s telecoms regulator proposed that the state use around PKR80bn (US$909mn) generated by the country’s Universal Service Fund (USF) to help increase broadband penetration. Pakistan had 1.397mn broadband subscribers at the end of May 2011. This was up from 1.141mn at the end of 2010. Pakistan’s broadband industry grew by around 59% in 2011, down from the 77% growth rate in 2010. By the end of 2011 the number of broadband subscribers had risen to over 1.8mn, a penetration rate of 1%.

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