Telecom sector's tax contribution increased by 129% in FY20: PTA

PTA says coronavirus lockdown was behind increase in taxes as usage of telecom services also increased

Our Correspondent

January 16, 2021

PTA says data usage in country increased 77% in FY20 due to coronavirus lockdown
PTA says country’s total broadband subscription grew by 175% in last five years
PTA says Pakistan has lowest affordability of telecom services in region

ISLAMABAD: An increase in usage of telecom services during the coronavirus lockdown led to a 129% increase in the sector’s tax contribution, with the sector paying Rs278 billion in fiscal year 2019-2020, The News has reported citing a PTA report.

“A surge in demand for telecom services due to lockdown resulted in significant growth not only in subscriber base but also in the usage of telecom services. Today, data usage stands at 4,498 Peta Bytes (FY2020) as compared to 2,545 Peta Bytes (FY 2019) showing a growth of over 77%,” said the Pakistan Telecom Authority (PTA) in its annual report for the year 2020.

The report said that the “substantial growth” would not have been recorded had the telecom sector not been upgraded in time. The country currently has international bandwidth connectivity of 3.1 Tera Bytes and around 47,000 cell sites, of which 90% are 4G enabled sites.

The report stated that the country’s total broadband subscription, in the last five years, also grew by 175%.

Broadband subscribers in the country have crossed 90 million, with the user base increasing by close to 8% in FY2020. Pakistan has a total broadband penetration of 42.2% as of FY2020.

“The telecom networks are currently available for 87% of the population and PTA is working with operators to increase their network coverage for remaining 13% unserved people of the country,” the report said adding, “Total teledensity now stands at 82% with over 172 million mobile and 2.2 million fixed-line subscribers”.

The report said that even though Foreign Direct Investment (FDI) across the economy was affected due to global lockdowns in 2020, the telecom sector accounted for 25% or $623 million of the total FDI in the country last year.

The report said that total investment in the country by local operators grew by 14.25% and a total of $734 million was invested locally, while the total revenues from the telecom sector climbed to Rs537 billion in FY 2020 with most of the money generated by the mobile sector.

It said that the the affordability of telecom services in the country has improved over the years and currently per GB broadband prices were as low as $0.20, adding that they were the lowest in the region.

The report stated that government’s tax collection has also increased due to the Device Identification & Registration System (DIRBS) for tax collection on handset imports. The local manufacturing of handsets had enlivened the telecom ecosystem, with growth in local 4G device manufacturing crossing 34%.

5G trials conducted in Pakistan: PTA

The regulatory authority said that the country also witnessed trials of 5G services, making it one of the few countries to trial the technology in South Asia.

“PTA is aiming for spectrum auction of LTE, VoLTE services in 2021 as a precursor to 5G. The regulator is also gearing up for auction of spectrum for high speed broadband services in AJK & GB,” the report said.

PTA this year awarded 110 licenses for different telecom services and issued 91 Commencement of Service certificates to the operators, the report added.

PTA also conducted QoS surveys across Pakistan for data, voice and SMS services and the operators were directed to take corrective measures where they underperformed, the report said adding that PTA also conducted a number of successful raids against illegal VoIP setups this year to curb grey telephony.