Mobile Telecom - · PDF fileMobile Telecom Building Connections ... Warid and Mobilink will ... The presentation should not be relied upon as professional advice

Mobile TelecomBuilding Connections

March 2016

Pakistan Cellular Industry

Industry – Structure

Regional Comparison

Snapshot


Industry – Structure Regional Comparison Snapshot

Mobile density in Pakistan

Year Total Mobile density (%) Unique Mobile density (%)

FY1048% 22%

FY1152% 24%

FY1259% 27%

FY1363% 29%

FY1472% 33%

FY1570% 32%

Total mobile density represents the percentage of population

having mobiles while unique mobile density captures the

number of actual subscribers, thus wide gap between the two

shows the potential available to the industry players


Industry – StructureRegional

ComparisonSnapshot

Decline in the subscribers owing to biometric verification of SIMs

Mobilink - the market leader, despite decline in share.

Increasing share of Telenor and Zong.

Market share

Period Mobilink Telenor Zong Ufone Warid Total

Subscribers 33,378,161 26,667,079 10,927,693 20,533,787 17,387,798 108,894,518

Share 31% 24% 10% 19% 16% 100%

Subscribers 35,953,434 29,963,722 16,836,983 23,897,261 13,499,835 120,151,235

Share 30% 25% 14% 20% 11% 100%

Subscribers 37,121,871 32,183,920 21,177,156 24,547,986 12,706,353 127,737,286

Share 29% 25% 17% 19% 10% 100%

Subscribers 38,768,346 36,571,820 27,197,048 24,352,717 13,084,823 139,974,754

Share 28% 26% 19% 17% 9% 100%

Subscribers 33,424,268 31,491,263 22,102,968 17,809,315 9,830,620 114,658,434

Share 29% 27% 19% 16% 9% 100%

Subscribers 35,156,550 33,191,103 23,518,919 18,750,250 10,323,691 120,940,513

Share 29% 27% 19% 16% 9% 100%

Subscribers 36,211,426 34,928,330 24,133,283 19,931,821 10,694,778 125,899,638

Share 29% 28% 19% 16% 8% 100%

Cellular Sims (Number of Active SIMs)

2QFY16

1QFY16

FY11

FY12

FY13

FY14

FY15



3G/4G Subscribers

Operator Technology Jun-14 Sep-14 Dec-14 Mar-15 Jun-15 Sep-15 Dec-15

Share in

the total

subscriber

base

Mobilink 3G 3,656,345 730,000 1,795,549 2,860,079 3,656,345 4,909,203 7,248,761 5.8%

Telenor 3G 4,162,616 650,094 2,268,860 3,530,421 4,162,616 5,485,083 6,373,498 5.1%

Zong3G 2,898,094 947,363 1,661,286 2,921,021 2,898,094 3,769,542 4,752,974 3.8%

4G 105,128 26 2,242 31,582 105,128 201,564 282,701 0.2%

Ufone 3G 2,570,283 1,365,259 1,952,584 2,662,310 2,570,283 3,518,635 4,293,739 3.4%

Warid LTE - - - 66,140 106,211 156,827 214,046 0.2%

Total 9,736,121 2,962,742 5,884,972 9,211,474 9,842,332 13,131,651 15,916,958 12.6%

Dec-15 Mobilink Telenor Zong Ufone Warid Total

Shareof 3G subscribers in the

cellular operator's subscriber base 20.0% 18.2% 19.7% 21.5% N.A. N.M.

Shareof 4G subscribers in the

cellular operator's subscriber base N.A. N.A. 1.2% N.A. 2.0% N.M.

Share of 3G/4G subscribers as

%age of total 3G/4G subscribers 45.5% 40.0% 31.6% 27.0% 1.3% 100%



Growth due to

maturity of cell sites

Mobilink

owning the

largest cell site

network

followed by

Zong.

FY13 Share FY14 Share FY15 Share

Mobilink 9,057 25% 8,593 23% 9,902 24%

Zong 6,308 18% 7,514 20% 8,651 21%

Telenor 7,599 21% 8,179 22% 8,321 20%

Ufone 7,981 22% 8,291 22% 8,318 20%

Warid 4,944 14% 4,999 13% 5,512 14%

Total 35,889 100% 37,576 100% 40,704 100%

31,303

33,920 35,889

37,576

40,704

3.9%

8.4%

5.8%

4.7%

8.3%

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

-

4,200

8,400

12,600

16,800

21,000

25,200

29,400

33,600

37,800

42,000

FY11 FY12 FY13 FY14 FY15

Gro

wth

Cel

l S

ites

Total Cell Sites

Pakistan | Average Revenue/Month



2.4 2.4 2.4 2.32.0 2.0

5.2 5.3 5.24.9

4.4 4.3

0.0

1.0

2.0

3.0

4.0

5.0

6.0

FY10 FY11 FY12 FY13 FY14 FY15

Average Revenue Trend

Per Mobile Per Unique Subscriber

US

D



During FY14, the total telecom

investment increased by three

times on YoY.

98% of this investment was

made in cellular segment on

account of planned acquisition of

3G and 4G spectrum and

deployment of advanced

telecommunication networks.

During FY15 Telecom attracted

FDI of USD 121mln – 23% of the

total FDI received by Pakistan in

that period.

Telecom Investment(USD mln)

Cellular LDI LL WLL Total

2010-11 359 109 18 8 493

2011-12 212 16 5 7 240

2012-13 422 2 16 12 451

2013-14 1,790 2 14 10 1,816

2014-15 828 12 4 7 851Note: Investment 2014-15 are estimated

FY11 FY12 FY13 FY14 FY15

Total FDI 1,574 821 1,576 2,641 529

Telecom FDI/(FD Outflow) 79 (361) (408) 903 121

Telecm FDI share in Total FDI 5% 0% 0% 34% 23%

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

35%

40%

(1,000)

(500)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

US

D i

n m

ln

Foreign Direct Investment (FDI)



Pakistan’s telecom revenue after witnessing a decline of ~3%, stood at PKR 449bln

in FY15. Cellular mobile segment continues to have the largest share (FY15: ~71%;

FY14: 72%).

LDI: Long Distance

International

WLL: Wireless Local

Loop

VAS: Value Added

Services



Next Generation Mobile Services (NGMS) Results

Applicant Winner in 2100 MHz Band Winner in 1800 MHz Band

Total license fee received

in FY14

(USD)

Zong 2x10 MHz (USD 307mln) 2x10 MHz (USD 210mln) 517 mln

Mobilink 2x10 MHz (USD 301mln) - 301 mln

Ufone 2x5MHz (USD 148mln) 2x10 MHz 74 mln

Telenor 2x5MHz (USD 148mln) - 74 mln

Total 2x30 MHz 2x20 MHz 966 mln

NGMS remaining payable

Ufone 74 mln + Markup @ LIBOR + 3% p.a.

Telenor 74 mln + Markup @ LIBOR + 3% p.a.

Total 148 mln + Markup @ LIBOR + 3% p.a.

According to GSMA, Unique subscriber is single individual that has subscribed

to a mobile service and that person can hold multiple mobile connections.

Unique teledensity considerably lower than total teledensity.



China India Indonesia Japan Pakistan Philippines Thailand Malaysia Australia

Total Connections 1,278 927 257 148 137 112 96 37 31

Unique

Subscribers672 468 106 116 59 51 38 16 22

Total

Teledensity91% 72% 101% 117% 73% 111% 143% 119% 129%

Unique

Teledensity48% 36% 41% 92% 31% 50% 56% 54% 91%

0%

15%

30%

45%

60%

75%

90%

105%

120%

135%

150%

-

140

280

420

560

700

840

980

1,120

1,260

1,400

Su

bsc

rib

er i

n m

ln

Subscriber (Sim) Base - September 2014

Unique Subscriber Base - March 2015



392 365

287 270

217 215

136

62

-

50

100

150

200

250

300

350

400

450

China India Australia Thailand Pakistan Malaysia Indonesia Philippines

Min

ute

s

Average Minutes of Usage per Subscriber per Month

7.0

6.0

2.0 2.0 2.0

1.0 1.0 1.0

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

US

Cen

ts

Call Charges per Minute



41.5 41.2

14.7

9.1 6.6

3.3 3.0 2.9 2.0 1.9

0

5

10

15

20

25

30

35

40

45

Japan Australia Malaysia China Thailand Philippines India Indonesia Pakistan Bangladesh

US

D

Average Revenue Per User Per Month

68%

59%

48% 47%44%

40%37%

27%

21%

0%

10%

20%

30%

40%

50%

60%

70%

80%

Japan Australia Indonesia Philippines China Malaysia Thailand Pakistan India

Data Revenue as % of ARPU

Snapshot



As competitive landscape exists, average revenues per user

(ARPUs) have yet to stabilize.

Business potential in value added services is expected to

provide impetus to revenue growth to the market players,

though time-line is uncertain.

Intense competition among players is expected to keep

EBITDA margin under pressure.

After acquisition of 3G and 4G spectrum, wireless internet

taken by the cellular operators

Mobilink to acquire 100% shares of Warid post regulatory

approvals and resultantly Abu Dhabi Group will in turn get

15% shares in Mobilink

After completion of the process, Warid and Mobilink will

merge into one company and consolidation will take place

Bibliography

1. Pakistan Telecommunication Authority (PTA) : http://www.pta.gov.pk/index.php?Itemid=1

2. PTA Annual Reports :

http://www.pta.gov.pk/index.php?option=com_content&view=article&id=361&Itemid=590

3. Cellular Operators Association of India: http://www.coai.com/reports-and-papers/coai-annual-

report

Analysts

Rana Nadeem

Unit Head Ratings

[email protected]

Aisha Khalid

Manager Ratings

[email protected]

Abdul Sami

Senior Financial Analyst

[email protected]

Contact Number: +92 42 3586 9504

DISCLAIMER

PACRA has used due care in preparation of this document. Our information

has been obtained from sources we consider to be reliable but its accuracy

or completeness is not guaranteed. The information in this document may

be copied or otherwise reproduced, in whole or in part, provided the source

is duly acknowledged. The presentation should not be relied upon as

professional advice.

http://www.pta.gov.pk/index.php?Itemid=1

http://www.pta.gov.pk/index.php?option=com_content&view=article&id=361&Itemid=590

http://www.coai.com/reports-and-papers/coai-annual-report

Documents

Mobile Telecom - · PDF fileMobile Telecom Building Connections ... Warid and Mobilink will ... The presentation should not be relied upon as professional advice