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Pakistan’s telecom sector is slipping into a deeper financial crunch as fresh data shows that operators are losing revenue even while handling record levels of traffic. Industry executives say this pressure has intensified over the past year, with rising costs, heavy taxation, and shrinking consumer spending pushing the sector toward a breaking point.
New figures suggest the situation is becoming unsustainable. Companies are adding users, expanding networks, and carrying more data than ever, yet they continue to earn less. Analysts say this mismatch reveals structural weaknesses that could slow Pakistan’s digital growth if not addressed soon.
Revenues Fall Despite Surging Usage
PTA’s latest report confirms a sharp drop in the industry’s financial health. Telecom revenues fell from Rs 955 billion in 2023-24 to Rs 803 billion in 2024-25. This decline is striking because data consumption rose to an unprecedented 27,897 PB, and broadband subscriptions reached 150 million.
The sector now serves 200.02 million users, with broadband penetration at 60.8% and total cell sites at 58,423. Even so, operators say they are generating less money per customer as voice and data ARPUs continue to slide. They link this trend to high inflation, aggressive price competition, and rising dollar-linked expenses on spectrum fees, equipment imports, and network rollouts.
Key pressure points highlighted during a PTA-led briefing include:
- Lower voice and data ARPUs due to consumer spending compression
- Heavy taxes on SIMs, usage, recharge, and an unreversed advance income tax
- Surging operating expenses driven by currency volatility
- Limited pricing flexibility despite higher costs
Pakistan’s national exchequer received Rs 271 billion from the sector, up from Rs 195.1 billion last year. While this appears positive for the state, analysts call it alarming because it shows the government is extracting more from a sector whose revenues are shrinking.
Executives warned that the industry is running on thin margins because retail prices cannot be increased in proportion to rising costs. One official said the current environment is “unsustainable without pricing reforms,” as operators struggle to invest in capacity, maintain quality, and prepare for 5G.
This revenue slump has arrived at a crucial time. Pakistan needs modern networks, spectrum refarming, and significant infrastructure upgrades to stay competitive in the region. Analysts caution that continued financial decline could trigger underinvestment, weaker service quality, and slower digital progress.
Industry stakeholders urged the government to offer fiscal relief, rationalize taxes, and adopt a long-term digital policy. They stressed that without urgent intervention, Pakistan’s telecom backbone could weaken further, affecting consumers and the wider economy.
