Since the introduction of mobile telecommunications in Pakistan in 1991, there has been continuous expansion in this sector. The range of connections grew by a combined annual growth rate of 52.8 percent over the period 2000-2013. In the last two decades, the mobile sector in Pakistan has enabled 60 million users to gain access to transformative technologies, including mobile broadband. This increase in access is bringing wide-ranging benefits to the home economy and society, is boosting productivity, and is supporting increased economic growth.
Today, mobile networks cover nearly 85 percent of the population. With three national mobile operators, competition within the market has a crystal rectifier to a major fall within the value of mobile possession for Pakistani shoppers, extending access and enabling millions of Pakistanis to enjoy the benefits of mobile services.
However, total mobile new subscribers in Pakistan remains low compared with the other countries of the region. Market’s subscriber base has also grown less rapidly over recent years. This places Pakistan behind its neighbouring countries in terms of subscriber penetration, which remains below global and regional averages. The reason is that the mobile sector is heavily taxed in Pakistan, with numerous taxes levied both on mobile operators and consumers. Many of these taxes are specific to mobile, for example, the tax levied on SIM card sale, or applicable at higher rates within the mobile sector, such as the Provincial Sales Taxand the Federal Excise Duty on usage. This puts the mobile business at a competitive disadvantage with regard to different industries and makes Foreign Direct Investment in ICT less enticing.
Consumer taxes in the mobile sector in Pakistan directly impact the affordability of services and create barriers for access to basic telephony services and advanced technologies, such as mobile internet and mobile broadband.
It’s worth mentioning that the development of mobile services has brought an extensive range of benefits to both consumers and businesses in Pakistan, and has the potential to make an even greater contribution with the enhancement of 3G and 4G services, and expansion of the knowledge economy across the country. Specifically, mobile services provide widespread benefits across a country’s economy and society through digital inclusion. It means that benefits of Information and Communication Technology (ICT) should be available to all, regardless of location or socioeconomic status. Mobile and broadband communication offers an effective means of bringing healthcare and education services to remote and underserved areas, through m-Government initiatives and mobile applications.
By investments in network rollout and quality of service improvements, mobile operators have the potential to further contribute to Pakistan’s economic growth
In India, as an example, primary schools used mobile phone tools to help students from rural, low-income households learn English. Researchers devised an application to improve listening, sentence construction and spelling. Test scores of students using the mobile tool improved by nearly 60 percent. There is a wealth of mobile applications, such as m-Agriculture, m-Women, and m-Health, which have the potential to bring significant socio-economic benefits to Pakistan, by delivering access to knowledge and skills across a variety of sectors.
Mobile services increase productivity across the Pakistani economy. They can reduce transaction costs, making it less costly for people to communicate and conduct everyday business operations, supporting the expansion of businesses and enterprises. Through wider effects on the economy, this helps to increase living standards in Pakistan and improve the country’s international competitiveness. This includes the direct contribution made by mobile operators, which is estimated at seven percent of Pakistan’s total tax revenues, and also the tax revenues generated by the wider ecosystem of industries supported by mobile services.
Through these positive effects, the mobile business will support several of the government’s objectives enumerated in Pakistan Vision 2025, which are specifically focused on ICT policy and those related to wider economic and social developments. In Vision 2025, the Pakistani government has demonstrated its commitment towards revolutionising ICT usage across the country.
By investments in network rollout and quality of service improvements, mobile operators have the potential to further contribute to Pakistan’s economic growth and help bridge this gap. Extending access to mobile services, or digital inclusion, could enable more Pakistanis to fully contribute to the economy, rise out of poverty, and gain access to vital services, along with supporting the country in achieving its Vision 2025 goals.
The writer is a journalist at Fox News Digital