Telecom sector FDI declined 20% in 2023-24: PTA

ISLAMABAD: Pakistan’s telecom sector on account witnessed an over 20 percent decline in receiving Foreign Direct Investment that has stood at $46 million in the fiscal year 2023-24 against $58 million in the previous fiscal year 2022-23.

According to the annual report of the Pakistan Telecommunication Authority (PTA) released on Monday, the dollar inflow in the shape of FDI was less than the outflow of dollars as the inflow of investment stood at $46 million but the outflow of dollars hovered at $90 million in the fiscal year 2023-24. The inflow of FDI in the dollar term stood at $58 million in 2022-23 while the outflow of the dollar ranged at $280 million.

According to the report, there are 196 million telecom subscribers. The number of broadband subscribers stands at 143 million, mobile subscribers at 193.4 million and fixed line subscribers at 2.6 million. The number of mobile broadband subscribers reached 138.7 million and the number of fixed broadband subscribers is 3.6 million. This sector’s investment continues to decline as it stood at $765 million in 2023-24 compared to $770 million in 2022-23. Earlier in 2021-22 the investment was $1.657 billion, $1.214 billion in 2020-21 and $1.140 billion in 2019-20.

The cellular mobile operators (CMOs) registered a maximum investment of $431 million in 2023-24 compared to $396 million in 2022-23. Over the last five years, total investments in Pakistan’s telecom sector have surpassed the $3.63 billion mark.

Its revenues touched Rs955 billion in fiscal year 2023-24, attracting $765 million in investments and contributing Rs335 billion to the national exchequer. The Telecom sector’s contribution to the exchequer was Rs341 billion in 2022-23. The Mobile Average Revenue per User (ARPU) rose to Rs302 per month in April-June 2024. ARPU increased to Rs276 per month in fiscal year 2023-24 up from Rs229 in the preceding year. However, the APRU was not shown in dollar terms which had declined compared to other comparable countries.

Jazz and Ufone particularly stood out, achieving significant ARPU growth rates of Rs327 and Rs280 in 2023-24 respectively compared to Rs 254 and Rs233 in the preceding year. Telenor and Zong also experienced growth, with their ARPU increasing Rs214 and Rs258 respectively. In April-June 2024, Jazz’s ARPU surpassed Rs369 per month followed by Ufone’s Rs304 during this period.

The report shows that the deployment of 5G requires a substantial investment in terms of upgrading existing networks and expanding infrastructure with the installation of small cells, advanced antennas, and extensive fibre optic backhaul. This imposes a considerable financial burden on telecom operators as securing the required capital can be a challenge for them, particularly in a competitive market with price-sensitive consumers.

Pakistan’s cybersecurity landscape is rapidly evolving, with a marked increase in threats targeting critical infrastructure, financial institutions, and government entities. The PTA has warned that challenges such as limited resources, shortage of skilled professionals, and inadequate public-private collaborations continue to impede progress. The global nature of cyber threats has necessitated the prioritization of international cooperation to strengthen cybersecurity defences, and while Pakistan is proactively establishing linkages and building synergies, there is still room for strategic actions to mitigate the entire spectrum of threats endangering the digital ecosystem.

Pakistan experienced a significant surge in cyber-attacks from July 2023 to June 2024. They included malware, followed by phishing, Distributed Denial-of-Service, ransomware, and insider threats, among others. Advanced Persistent Threats (APTs) represent the top tier of threat actors, distinguished by their advanced capabilities, sophisticated attack techniques, and continuous evolution.

These cyber criminals engage in high-profile attacks involving novel tools and intricate techniques that surpass the capabilities of other cyber-criminal groups. Geopolitical factors significantly influence the tactics and targets of APT actors. The major APTs that targeted Pakistan during 2023 were Gamaredon, DoNot, Bitter, Kimsuky, Lazarus, and SideWinder. Their key targets included Internet backbone infrastructures, healthcare entities, and organizations affiliated with the government.