Telecom Sector Deregulation, Business Growth and Economic Development

Pakistan is amongst one of the leading nations in the region where the telecom sector reforms were well conceived properly planned and skillfully executed resulting in measurable growth and its impact on all spheres of public and private lives is felt and seen. The telecommunication sector in Pakistan has shown significant growth since the promulgation of Pakistan Telecommunication (Reorganization) Act of 1996. Over 76.6 million cellular mobile users and 4.8 million landlines connections provide a teledensity of 52.8% to the nation. The mobile networks provide coverage to 90 percent of the population. Total telecom investment during the year 2006-07 was US $ 4.12 billion while the share of telecommunication sector in GDP was 2.0%. Telecom companies invested over US$ 8 billion during the last four years, mobile sector investment share accounted for 66% of the total investment. China Mobile alone invested US$ 704 million during 2006-07 for expansion of its CMPak networks. The mobile sector paid over a billion dollars in taxes to the National Exchequer during the year 2006-07. The telecom sector received above US$ 1.8 billion FDI, i.e., 35% of the total FDI and helped create over one million jobs since the deregulation of the telecom sector began. Despite very convincing results the reform process was not free of errors and omissions. The paper highlights the successes and points out the areas that require readjustments.