he current state of the telecommunication sector in Pakistan is a landscape brimming with challenges as well as opportunities. The available data indicates a significant gap in service accessibility. Although telecom penetration has surged from its humble beginnings in the early 2000, the data from Pakistan Telecommunication Authority shows that there are 131 million broadband subscribers in the country; the broadband penetration is 54.58 percent.

This means that high-speed internet services are available to nearly half of the population.The total tele-density reached 80 percent in December 2023 with a 0.85 million increase in 3G and 4G users, reaching around 126 million.

In August 2023, a comprehensive analysis of network providers in Pakistan by the Global System for Mobile Communications Association, illustrated notable trends in user bases whereas overall a decline has been observed in the 3G users and rise in the number of the 4G users.

Jazz observed a reduction in its 3G user count from 4.300 million to 4.148 million, indicating a decline of 0.152 million users. On the other hand, Jazz’s 4G users increased from 42.769 million to 43.010 million during the same period. Zong has experienced a decrease in 3G subscribers, falling from 2.479 million to 2.425 million, while their 4G user base witnessed growth, rising from 32.927 million to 33.269 million. Telenor followed a similar pattern, with a decline in 3G users from 2.761 million to 2.720 million, accompanied by an increase in 4G user numbers from 23.150 million to 23.260 million.

Ufone recorded a slight decrease in 3G users from 2.691 million to 2.676 million, whereas its 4G user base exhibited growth, escalating from 13.206 million to 13.616 million.

These changes underscore the dynamic nature of Pakistan’s mobile network use, highlighting the contrasting trajectories of 3G and 4G user bases among major providers as of August 2023. Apparently, the impressive 4G penetration exceeds 50 percent, but adjusting for duplication brings it down to 30-40 percent, as per GSMA estimates. The situation signals a pressing need for strategic reforms to unleash the full potential of digital infrastructure in the country.

In 2022, GSMA connectivity index ranked Pakistan as an ‘emerging' network, scoring 44.92, which is the second lowest in the South Asian region.[Afghanistan with the status of a ‘discoverer’ scored 30.15. In the South Asian regional comparison, India topped the list with 61.26, followed by Sri Lanka with 59.42, Nepal with 52.60 and Bangladesh with 51.30.]

The index values represent a quantitative assessment of connectivity, incorporating various factors, such as infrastructure, affordability and access to communication technologies. A relatively lowscore for Pakistan suggests potential challenges or gaps in its connectivity ecosystem, emphasising the need for strategic interventions to enhance infrastructure, accessibility and affordability in the telecommunications sector. The comparison with nighbouring countries highlights the importance of targeted efforts to improve connectivity in the country.

Strengthening the telecommunications infrastructure and implementing measures to enhance affordability can contribute to an overall improvement in the connectivity landscape, increasing accessibility and use of digital services in Pakistan.

A breakdown of four indicators of enablers shows that infrastructure has a score of 19.49; affordability stands at 12.99; consumer readiness is rated at 22.48; and content and services receive a score of 22.21. A low score for affordability indicates that high service costs and limited availability of budget-friendly plans make telecommunication services economically inaccessible to a significant segment of the population. Improving affordability should be a critical focus area for policymakers and service providers to enhance inclusivity in connectivity.

The consumer readiness score suggests a relatively highlevel of preparedness and willingness among the population to adopt and utilise digital services. However, the success of connectivity initiatives is equally important while addressing the identified gaps in infrastructure and affordability.

Strengthening the telecommunications infrastructure and implementing measures to enhance affordability can contribute to an overall improvement in the connectivity landscape, increasing accessibility and use of digital services in Pakistan. Additionally, focus on content and services can stimulate user engagement and contribute to an improved digital experience.

The problem lies in the enablers of connectivity including spectrum and optical fibre. A recent World Bank study exposed Pakistan’s standing as the second lowest in the region concerning spectrum assignment. Currently all operators in Pakistan put together possess less spectrum than a single Australian operator. The government focus on revenue generation from spectrum auctions since 2014 has hindered progress. A key recommendation is to rationalise Pakistan Telecom Policy 2015 for Spectrum Trading, recognising its role as an enabler rather than a one-off revenue source.

The reluctance of the government to release ample spectrum for auction affects connectivity and service quality for telecom operators. High reserve prices hinder participation and limit competition, undermining the potential of spectrum as a catalyst for connectivity and economic growth.

The spectrum, a connectivity and market competitiveness element, is also included in the digital infrastructure pillars in an ongoing country diagnosis conducted by Asian Development Bank and Sustainable Development Policy Institute. It is important that the government shift its perspective, recognising the long-term benefits of rationalising spectrum policy over short-term revenue gains.

In addition to spectrum issues, inadequate fibre-opticconnectivity poses a significant obstacle to the realisation of 5G technology. With less than 10 percent of telecom assets connected through fibre, a robust strategy is needed to address this shortfall.

Sector-specific taxation is another critical challenge. The telecommunications sector is burdened by disproportionately high taxes compared to other industries. The need for a fair and consistent tax policy is mandatory, as demonstrated by the glaring discrepancies in tax rates between essential services like mobile transactions and non-essential luxury transactions.

To unlock the full potential of the telecommunication sector, a holistic approach encompassing spectrum policy rationalisation, fibre penetration, fair taxation and consistent long-term policies is crucial. It is time for Pakistan to pave the way for a digitally empowered future through visionary policies and systematic overhaul.

The writer is a project assistant at the Centre for Private Sector Engagement, Sustainable Development Policy Institute, Islamabad. She can be reached at maheenrhan1212 @gmail.com