According to a recent update by State Bank of Pakistan the telecom sector has grasped nearly $126.9 million Foreign Direct Investment (FDI) during the last 11 months from July to May 2014-15. Apart this the entire level of imports have been raised by 10.37 percent during the same period of time as compared to the preceding year.
More precisely, the imports of telecom stood at $1.265 billion against the imports of $1.146 billion in July-May 2014-15.
The mobile technology imports in the country have raised by 15.86% as compare to preceding year and the whole imports increased around $653.808 million up from $564.293 million in the same period last year, according to the Pakistan Bureau of Statistics.
The report of SBP states that the “cellular operators are rolling a range of new products for their customers since the spectrum auction of 3G/4G licenses in April 2014 and are also investing for the up-gradation of their systems and network which resulted in an increase in foreign direct investment and a surge in telecom imports”.
The report further reveals that:
The performance of PTCL also remained weak during the first half of FY15. Additional cost incurred on voluntary separation scheme brought down the operating profits from Rs8.6 billion at end-June 2014 to Rs4.5bn by end of Dec 31, 2014.
The overall commenters clearly Telecom sector is now meeting growth while the recent budget 2015-2016 by the government of Pakistan doubles the taxes on mobile phones, it is scary that enhanced growth is likely to be hampered.
However the move to withdraw 19.5% GST on all types of interest services is certainly a positive step from the Government of Punjab. Apart this Telecom sectors are in mood to convince Khyber Pakhtunkhwa (KPK) and Sindh governments to remove the general sales tax (GST) on data service and broadband Internet, in case they meet the success, the country can move towards digital growth.
