Monitoring Desk
ISLAMABAD: The Average Revenue Per User (ARPU), a basic tool for evaluating the financial health of cellular mobile operators/Telcos, in Pakistan has dropped to $0.80 per month – lowest in the world, local media reported on Friday.
In a meeting with Minister of Information Technology and Telecom, Aminul Haque, CEOs of the leading telecom companies voiced their concern over the industry’s deteriorating financial health, which, they said, was pushing the country into digital dark ages.
Telco reps
PTCL Group CEO Hatem Bamatraf, Jazz CEO Aamir Ibrahim, Telenor Pakistan CEO Irfan Wahab and a management representative of Zong expressed the fear that the industry was moving towards collapse, mainly due to the “wrong policy of pegging telecom licence price with the United States dollar and delay in opening Letters of Credit for import of telecom equipment”.
In a tweet, Aamir Ibrahim said that for the survival of the industry, its ARPU must stay above $1.5 per month as the telecom sector’s cost structure has been dollarised in terms of spectrum fee, electricity, capex, fuel, etc. He was of the view that the industry also could not afford the regulatory approach to restrict tariff increase any more.
Similarly, Asia-Pacific GSMA Head Julian Gorman also expressed his concern and said that the world’s lowest Average Revenue Per User indicated affordability, but it was not prescriptive and must be considered in the context of financial sustainability of the sector. “Digital Pakistan is at risk of collapse unless meaningful action is taken to chart a path out of the crisis and for growth,” he suggested.
The IT minister was informed that due to an unprecedented increase in operating costs, interest rate, primarily fuel, electricity and currency depreciation, the industry was in crisis. Based on publicly available data, two telecom companies reported a combined loss of around Rs30bn in the last calendar year.
Expresing his views, Hatem Bamatraf, in a tweet, said that with constant devaluation of Pak rupee against US dollar, the cost of doing business had significantly increased.
At a time when the sector’s profit is constantly shrinking amid increasing operational costs, investment in infrastructure development and improvement in the quality of services is unlikely.
