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ISLAMABAD: During fiscal year 2023-24, Pakistan’s telecom industry suffered heavy losses in Foreign Direct Investment (FDI), contributions to the national exchequer, and overall investments. This highlights the wider economic issues that Pakistan is facing. Foreign direct investment (FDI) in the telecom industry fell 21% to $46 million in 2023-24 from $58 million the previous year, according to the Pakistan Telecommunication Authority’s (PTA) annual report, which was published on Monday. This decrease keeps going downward after falling by $204 million in 2020–21 and $175 million in 2021–22.
Investments in the telecommunications industry also declined little, falling from $770 million in 2023–24 to $765 million. This is a 0.65% decline. The previous two years’ budgets, $1.657 billion and $1.214 billion, represent a considerable decrease. Despite this, CMOs (cellular mobile operators) boosted their investment share, going from $396 million in 2022–23 to $431 million in 2023–24. Investments in the industry have surpassed $3.63 billion in the last five years.
There was a record-breaking 955 billion rupees in telecom revenues in 2023–24, with 335 billion rupees going into the national exchequer, according to the PTA report. Having said that, the Rs 341 billion recorded in 2022-23 was a little higher.
In 2023–24, mobile ARPU jumped significantly to 276 rupees per month from 229 rupees the year before. A further increase to Rs 302 per month occurred during the April-June 2024 quarter of ARPU. Jazz and Ufone were two of the operators that had significant growth in 2023–24, with ARPU figures of 327 and 280, respectively, up from 254 and 233 the previous year. Similar increases were recorded by Telenor and Zong, with ARPU hitting Rs 214 and Rs 258, respectively.
Broadband and digital services are becoming increasingly important in boosting profitability, as seen by the fact that data revenue now constitutes 65% of total mobile sector income.
Key Challenges Slowing 5G Deployment
Major challenges to 5G implementation in Pakistan were detailed in the PTA report. These included high investment costs, low return on investment, and a lack of suitable phones. The installation of upgraded antennas and fiber optic backhaul are examples of infrastructure upgrades that require substantial cash. Another problem is dealing with price-sensitive consumers.
The report stressed the importance of public-private partnerships (PPPs) and government incentives to solve these problems. Due to financial and logistical constraints, connecting rural communities to the Internet is more important than ever. To inform the public about the advantages of 5G and to correct common misunderstandings, public awareness initiatives are essential.
Increasing Cyber Threats
Malware, phishing, ransomware, and insider threats all saw a concerning uptick in assaults in 2023 and 24. Critical infrastructure, healthcare entities, and government organizations in Pakistan were targeted by Advanced Persistent Threats (APTs) like Gamaredon, Lazarus, and SideWinder.
The telecom sector experienced a significant spike of 173% in 2023–24, making it the seventh most targeted sector globally for phishing assaults. Despite these obstacles, Pakistan rose to Tier-1 (Role Modelling) status in the 2024 Global Cybersecurity Index, moving up from 79th place to among the top 40 nations.
Muhammad Naveed, a PTA member, commented on the falling foreign direct investment and investment trends, attributing them to the wider economic problems facing Pakistan. In spite of all of these challenges, the telecom industry is still an important part of our country’s economy.
At the same time, Senate Chairman Syed Yousaf Raza Gillani called on the government to bridge the gap in internet access between urban and rural areas and use AI solutions in all industries. Mr. Gillani emphasized the need to provide the public with high-quality internet and IT services while speaking at the National Broadband Network Forum 2024, which the PTA organized in partnership with Huawei.
He argued that in order to accomplish this goal, the government should promote public-private partnerships and eliminate obstacles to internet efficiency in order to push its digital agenda forward.
Internet outages, throttling, and app blocks are a major concern for industry leaders because they discourage investment. Even though there will be a 5G auction in April 2025, Jazz CEO Aamir Ibrahim said, “4G for all is better than 5G for a few.” He asked the government to fix the problem of spectrum that wasn’t being used and make rules to bring ARPU up to world averages.
According to Shiza Fatima, the state minister of information technology, the government will continue to provide assistance for closing the digital divide. Despite concerns about cybercrime and security, she was optimistic about the possibilities of a nationwide internet connection through satellite.
Efforts to create a digitally inclusive Pakistan were highlighted by Secretary MoIT Zarar Khan, who said that tax cuts for the IT industry may be explored if infrastructure reinvestment was secured.
Syed Yousaf Raza Gilani, chairman of the Senate, received the annual report from Major General Hafeezur Rehman, chairman of the Pakistan Telecommunication Authority (PTA).
The PTA chairman stressed the authority’s promise to support technological progress, put in place safety measures for the internet, protect customer rights, and encourage fair competition.
He emphasized that the PTA’s objectives include providing high-quality telecom services at competitive prices and establishing progressive regulatory frameworks to optimize digital infrastructure, encourage investment, strengthen cyber security, and increase service delivery.
According to the PTA chairman, no VPNs have been blocked and will not be blacklisted in the future. Although the authority is capable of blocking VPNs, it has not implemented nor intends to implement this policy at this time. He stressed that trying to hide anything is pointless in the modern era.
He admitted that the PTA doesn’t know what to say about shutting down the internet for national security reasons. He suggested that lawmakers should be questioned on matters of national security.
