Reignite Pakistan’s Telecoms Future by Unlocking Scale, Innovation, and Digital Growth

By Jon Omund Revhaug

View original article on ProPakistani’s website

As I conclude my first visit to Pakistan, I am struck by the transformative impact of mobile connectivity in this country. A small anecdote I heard was how camels in Thar, Pakistan’s largest desert, no longer wear bells but have their owners’ mobile numbers on their necks, so that they can be easily notified if the animals wander too far.

Telenor Pakistan marked their 20th anniversary in March of bringing connectivity to over 80% of the population. Over the two decades, this critical connectivity has enabled many people and industries in Pakistan, and helped the agriculture, banking and financial sectors as well as the technology freelancing communities to grow.

Despite these strides by Telenor Pakistan and other industry players, 59.3% of Pakistan’s population subscribes to mobile internet services today, underlining the scale of the ongoing challenge to connect the unconnected . The average revenue per user (ARPU) in Pakistan’s mobile sector is one of the lowest globally at below US$1, compared to the global average of US$8, making it insufficient to cover dollar-denominated costs such as spectrum fees and equipment imports.

This means while there is tremendous untapped potential, the financial sustainability of the telecom industry to continue to invest and bring more online, continues to be under significant pressure.

Consolidation to create scale

The recent wave of consolidation in telecoms presents a compelling case for similar developments in Pakistan’s mobile sector, offering a glimpse of what the next stage of growth can look like.

With the successful mergers of Celcom and Digi in Malaysia and True Corporation with dtac in Thailand, Telenor observed significant benefits that arise from such consolidations, for consumers, businesses and the telco sector overall.

In Pakistan, a similar consolidation can be achieved from the sale of Telenor Pakistan to PTCL, the nation’s largest integrated ICT company, which will help strengthen the telecoms sector, creating opportunities in new areas of growth to the benefit of consumers.

Untapped customer benefits

By combining the strengths of two entities, Telenor has seen benefits of mergers materialise in Malaysia and Thailand. The merged companies can better allocate spectrum resources, expand and improve network coverage, provide better customer service platforms, and offer customers more choice.

Customers are enjoying significant improvements in network quality and experience post-mergers. CelcomDigi and True Corp each have a laser-like focus on modernising their networks and IT systems as part of the integration. As an example, in Thailand, 4G coverage of Dtac and True was 96.9% and 99% respectively, while 5G was 46.8% and 85.6% respectively prior to the merger. Post-merger, the combined networks now provide 99.2% 4G coverage and 90% 5G coverage.

Customers now have access to a suite of digital convergence solutions, beyond mobile connectivity. In Malaysia, CelcomDigi’s bundled home fibre offering caters to a growing demand of networked devices and services for home automation. Malaysian enterprises can tap on CelcomDigi for security, AI, IoT, and cloud services, in addition to connectivity.

Bringing advanced technologies to Pakistan

A company with scale is more financially stable to invest in advanced technologies like AI and cloud computing, which can drive innovation at an accelerated pace.

CelcomDigi’s innovation centre in Kuala Lumpur, launched last year, is fast becoming the country’s foremost innovation hub, showcasing AI, 5G, IoT and robotics use cases over 8 verticals and industries.

True Digital, True Corporation’s digital convergence technology arm, offers cutting-edge technology such as AI, IoT, blockchain, business analytics and cybersecurity for enterprises.

Unlock Digital Pakistan’s potential

Based on Q4 2024 financial statements reported by Jazz and Telenor Pakistan, Jazz is the market leader with a mobile revenue market share of almost 44% while Telenor Pakistan holds around 20%. Based on Telenor estimates, Zong has a market share close to 25% while PTCL is at 12%. In this capital-intensive industry, companies with a market share below 20%, i.e. Telenor Pakistan and PTCL, cannot sustain over time. The combined entity of Telenor Pakistan and PTCL will have around 32% market share.

Telenor believes that Telenor Pakistan will have significant contribution and boost to PTCL moving forward. Creating a stronger number two player will also mean more effective competition in the market, with benefits for consumers. Equally, the government having majority ownership of the nation’s second largest connectivity infrastructure player would further ‘Digital Pakistan’ ambitions.

This merger can reignite Pakistan’s telecoms future. As the primary providers of connectivity in Pakistan, the mobile industry plays a crucial role in driving digital transformation and progress. To unlock its full digital potential, improve the lives of its citizens, and drive sustainable economic growth, Pakistan needs financially strong telco operators, who can continue to invest in resilient data networks to form a strong and robust bedrock of a digital nation.

This article is written by Jon Omund Revhaug. He is Executive Vice President and Head of Telenor Asia.