Pakistan’s quarterly customer growth rate stood at 6.7% in Q2, the lowest level recorded since the first quarter of 2000, when there was a fledgling market of just 0.3m customers. On an annual basis growth fell to 39.4%, down 45.1pp compared to the prior twelve months. The total market stood at 88.05m customers at the end of Q2 with penetration at 51.0%, and one possible explanation for the slowdown is that the market is approaching the natural limit for potential customers at the current price points. Certainly the slowdown is a long-term one, as the graph on the left demonstrates.
The decline in growth was widespread, with only one operator recording double-digit growth in Q2 08 compared to four in Q2 07. Market leader Mobilink (Orascom) was particularly hard hit, with a quarterly uplift of just 0.8% in Q2 08, down from 7.4% a year earlier. Telenor saw its worst ever figure for quarterly growth with a gain of 8.5%, down from 18.0% in Q2 07, although this did not prevent it from seizing second place in the market from Ufone, which grew by 5.2% in the quarter compared to 20.8% a year earlier. The two operators were separated by just 25k customers at the end of Q2 08 with Ufone on 18.10m and Telenor on 18.13m, and in fact Ufone managed to reclaim the lead in July and open up a gap of 274k by the end of August. More than 2.6m adrift in fourth place was Warid, which was only 80k behind Telenor at the end of Q2 07. It saw quarterly growth of 7.6%, down from 18.6%, to finish on 15.49m.
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The only operator to record double-digit growth was China Mobile Pakistan, which is branded Zong. In fact, it put in an extraordinary quarterly performance, adding 1.81m customers – a market-leading figure – to finish with 3.95m. This represents proportionate growth of 84.4%. Moreover, the latest monthly figures suggest that this is no flash in the pan, with a further 0.85m added in the two months since the end of Q2.
Customers and Annual Growth, Q2 06 – Q2 08
Zong’s excellent growth saw its market share increase by 2.9pp year on year to 4.5%. Mobilink was down 5.5pp to 36.4%, Telenor and Ufone both had 20.6% – the former gaining 3.7pp and the latter losing 1.6pp – while Warid gained 0.8pp to 17.6%.
Source: Cellular News.