Business | Markets
Promising outlook for Pakistan's telecom industry
China Mobile's launch in Pakistan comes at a time when the country's equity investors in the telecom sector are looking around for opportunities elsewhere. And yet, growth in telecoms can not be ignored as a relatively insignificant development for the long-term prospects of the economy.
- By Farhan Bokhari, Special to Gulf News
- Published: 00:31 April 6, 2008
Islamabad: China Mobile's launch in Pakistan comes at a time when the country's equity investors in the telecom sector are looking around for opportunities elsewhere. And yet, growth in telecoms can not be ignored as a relatively insignificant development for the long-term prospects of the economy.
According to a statement attributed to Wang Jian-zhou, chief executive of China Mobile, the company is looking to eventually make a large investment of at least $1.5 billion in Pakistan, aimed towards introducing attractive new packages for its users.
New value-added services like mobile TV, mobile music and news on mobile phones are among the new features announced by Jianzhou for offering the company's customers.
Expressing confidence in Pakistan's mobile communications market, Jianzhou said: "Based on our experiences in China, we have good understanding in emerging markets. We are very successful in fast growing economies and we would like to apply those practices here.
Right choice
"Pakistan is the right choice for international expansion and we will continue to improve and strengthen our network. We have 2,500 base stations today compared with the 900 when we took over last year. And our future investments will depend on our financial performances."
For the moment, telecom analysts looking at the Karachi stock exchange will probably want to concentrate fundamentally on prime areas such as stocks representing cement and energy which appear to have shown more promise.
At a time when Pakistan is faced with prospects of an economic slowdown, the country's cement exports are rising to the Middle East while companies in energy-related interests are finding their prospects lifted with the worldwide hike in energy prices.
Huge demand
But going forward, the outlook for the telecom sector is likely to become increasingly attractive for several reasons. Pakistan is a country with a large and constantly growing population. Anecdotal evidence already suggests that it is difficult to find a household across the country without a mobile telephone.
As time goes on, this trend will only strengthen further to the point where not only demand for new telephones will rise but indeed customers will become more savvy in seeking added services. Investors looking to the future will be attracted towards eventually setting up mobile phone production facilities in Pakistan. If so, this will be the perfect opportunity to respond to Pakistan's growing unemployment by offering employment for the increasing number of unemployed young people.
As China Mobile hits the road in Pakistan, there are also warnings from analysts of the danger of a saturation in the cellular phone industry in the country. This warning follows from the existence of a number of cellular phone services already operating in the country.
However, the saturation question should not be a deterrent to the new government to consider fresh incentives.
- The writer is a journalist based in Pakistan.
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