ISLAMABAD: Currency appreciation against the US dollar has added to the woes of telecom operators in Pakistan as they have to import more equipment.
Speaking to WealthPK, Asif Aziz, CEO of mobile service provider Jazz, said the depreciation of the rupee has reduced the ability of operators to expand their capabilities and operations.
He said the economic downturn caused the number of mobile phone subscribers to drop in 2023 compared to 2022.
“The quality of services provided by mobile operators in Pakistan is not up to global standards. Operators must continue to invest to keep up with the changing technological landscape, and invest in network and capacity expansion,” he said.
Speaking to WefonePK, Tariq Baig, Head of Franchise Support, Ufone 4G, said that the exchange rate of the rupee against the US dollar has increased the cost of doing business in Pakistan, making it difficult for telecom companies to invest in upgrades.
The telecom industry recorded a revenue of $850 billion in FY23, showing a growth of 17% year-on-year. This growth in terms of rupees, while in dollars, the revenue decreased from $ 882 million in 2018 to $ 762 million in 2023.
The telecom sector has witnessed a huge investment of $6.2 billion during the period 2018 to 2022.
The Finance Act 2021 has declared the telecommunication sector as a sector, but still this sector does not get the benefits of other industrial sectors. The telecom sector is one of the most taxed sectors in Pakistan. License fees are one of the biggest costs that mobile operators have to pay.
While Jazz had the largest customer base during 2019-23, it witnessed a drop in customer share from 38.8% to 37%.
Tariq Baig revealed that the ongoing devaluation of the Pakistani rupee prevents the telecom industry from providing reliable internet services because of license fees and their fees in US dollars. “Policymakers need to address this issue to promote digitization in Pakistan.”
Currency devaluation mars mobile operators’ expansion efforts
