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Telecom sector is the most prominent and dominant sector in Pakistan since past 5
years. Although the sector had suffered a lot in the current recession but still it had gained
to a huge extent as compare to the other emerging sector in Pakistan like Textile sector.
When Paktel lauched its services in 1990 there was a monopoly of Pakistan
Telecom Company Limited PTCL, the land line phone, prevail in the country. In initial
stages the users were too less that the cost of the firm could hardly be fulfilled. But as the
time passed by Mobilink and then Ufone joined the race. They educate the public about the
telecom sector and tried to grab more and more users in their network. After the
millennium the then government attract more foreign firm to invest in Pakistan and they
succeeded in their act and the telecom sector became highest contributor in the GDP.
50
45
Amount in Millions
40
35
30
20
10 11
4.6 6.3 7
2.1 2.3 2.4 2.5 3.1 4
0
1996 199719981999 2000 2001 2002 2003 20042005 2006 2007
Despite the difficult time in Pakistan economy, generally the telecom sector had
exhibit a positive and emerging growth in term of revenue and subscribers. From the above
analysis we see that in start of the millennium the teledensity in year 2003-04 was 6.25%
and it jumps to 58.8% in 2007-08. The major portion that makes this sector to 58.8% is of
Foreign Direct Investment in Pakistan these days. In other words Pakistan kept on relaxing
investment-related policies for its telecom industry, FDI in the sector boosted up. The
difference between nature of policies in early 90s and in 2000 onwards is reflected in the
difference in the level of foreign direct investment in telecom, especially cellular phone,
sector of Pakistan.
6000
5125 5153
5000
4000 3521
3000 FDI in Telecom
2000 1905.1 1824 Total FDI
1524 1438.6
1000 798 949.4
207.1 494.4
0 13.5
2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
It is expected that the trend of investment may continue in the next 5 years because
large potential market still exists in Pakistan and all operators intend to grab their share.
China Mobile acquired Paktel which has contracted out US$ 500 million worth of project
to renowned companies like Ericsson, ZTE and Alcatel to roll out their networks. Similarly
Mobilink also plan to invest US$ 500 million in 2007-08 for improving and expanding its
quality of service.
40,000 36,282
30,000 26,770
Amount in Millions 20,397
20,000
12,119
10,000 8,810
0
2001-02 2003-04 2004-05 2005-06 2006-07
Years