Feasibility of Vodafone in Pakistan

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Telecom Industry
After mergers and acquisitions, the top mobile companies are: Egypt-based Mobilink has 32 %market share with 32.3 million subscribers. Norway-based Telenor has 24% market share with 20.893 million users. Ufone, associated with the Pakistan Telecom Company Ltd (PTCL), managed and partly owned by UAE-based Etisalat, has 19.5 million users. UAE-based Al-Warid has 16.9 million users. China-based Zong has 6.7 million users. According to the latest reports, the number of mobile phone users has exceeded 99 million in fiscal 2010, a five per cent jump on yearly basis. http://tribune.com.pk/story/40007/mobile-phone-users-cross-99m-mark/

http://telecomnewspk.com/2010/03/telecom-subscribers-down-2-2-million-subscribers-jan-2010-stats/ The summary of the growth in the revenues over the years is as follows

http://teletimesinternational.com/images/teletimes_sep_2010.pdf The graph below depicts teledensity growth which encompasses the cellular mobile, local loop and the wireless local loop.

The total teledensity of the country reached 63.5% in December 2009, which was 62.1% in June 2009. During the first two quarters of FY 2009-10, the overall teledensity increased by about 1.8%. source: http://voicendata.ciol.com/content/vnd100_2010vol-II/110070528.asp Since the inception of cellular mobiles in the Pakistan, the industry has witnessed a rocketing increase in the mobile density in the early years, with the amount leveling in the recent past. This is reflective of not only the high revenues and rapid growth in the initial years but also of the resulting stiff competition and market saturation.

Cellular Company| Aug 09| Sept. 09| Oct 09| Nov 09| Dec 09| Mobilink| 29,840,415| 30,046,050| 30,275,979| 30,480,398| 30,800,354| Ufone| 19,607,299| 19,104,594| 18,329,967| 18,361,072| 18,510,175| Zong| 6,556,697| 6,629,761| 6,752,031| 6,869,174| 6,920,234| Instaphone| 3,575| 1,073| 1,073| 1,073| 1,073|

Telenor| 21,428,286| 21,658,592| 21,975,271| 22,279,449| 22,500,789| Warid| 18,347,366| 18,468,208| 18,584,409| 18,718,419| 18,847,315| Total| 95,783,638| 95,908,277| 95,918,729| 96,709,585| 97,579,940| | | | | | |

SCO Cellular Subscribers are 285,072Note: Including AJK & NAs| Important Trends Telecom Industry
Pakistan has more than 97.6 million mobile phone subscribers and a penetration rate of 59.03 per cent, figures from the Pakistan Telecommunications Authority. It is forecasted to grow to 130.6 million subscribers by 2013, according to IE Market Research. Although the industry generated revenues of 212.42bn Pakistani rupees (Dh9.18bn) in 2008, the monthly average revenue per user rate is only about 185 rupees. Owing to the weak economic conditions, liquidity in this market has dried up. Inflation has increased and the Pakistani rupee has depreciated by up to 40%. While industry players struggle to maintain market share and revenues, it has been a challenge because they have borrowed in dollars. Source: http://www.apnatime.com/4554/2010/02/04/telecom/ptcl-telenor-acquire-warid-pakistan/ Pakistan, much like its neighbor India, is widely viewed as a telecom market dominated by low ARPU users, with subscribers spending an average of just $2 to $3 a month on mobile services, according to data from Ireland-based Research and Markets.

Furthermore, with five mobile operators, Pakistan is also fiercely competitive. But while such a price sensitive environment might be expected to provoke most operators into a destructive price war, Warid Telecom, the country’s fourth largest operator by subscriber numbers, is keen to steer clear of a fixation on price. Source: http://www.waridtel.com/about/media/archive/warid-ceo.php Recent Events

In Pakistan, the economy was strongly hit by the major flood, causing a loss of infrastructure and agricultural crops. It has been estimated that GDP growth may drop to 2%, missing the 4.5% GDP initial growth target which will...
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