Cheap data, rising costs put Pakistan’s telecom economics in focus

Business Recorder reported that Pakistanis are using heavier volumes of mobile data at prices among the world's cheapest, but the economics behind that affordability are under strain. Industry experts reached this view in a background discussion with the newspaper. Customers currently pay about Rs29 per GB, while average revenue per user sits near US$1 a month, which places Pakistan among the lowest-revenue telecom markets.

The squeeze is set to tighten after the recent spectrum auction, with operators facing at least US$510 million in payments, half of it due next year. Industry estimates indicate each operator could need to modernise over 1,000 mobile sites every year to boost capacity and prepare for 5G. Network operation has become far dearer: energy, imported gear, freight and insurance all cost more amid inflation, currency swings and geopolitical tensions. Brent crude, which stood near US$60 a barrel in December, is now close to US$84.

Operators commit an estimated 15 to 20% of yearly revenue to network expansion and modernisation, yet data traffic and investment needs are outpacing revenue per subscriber. Cellular subscribers in Pakistan number over 208 million and mobile broadband users around 160 million, while the changing economics are bringing the retail tariff framework back in focus. Operators with Significant Market Power need prior approval from the Pakistan Telecommunication Authority (PTA) for upward tariff revisions, while routine tariffs in the UK, US, Canada and Australia are generally set commercially.