Industry stakeholders say currency depreciation posing existential threat to Pakistan’s telecom sector

A shopkeeper deals with customer at his mobile shop in Islamabad on May 20, 2022. (Photo courtesy: AFP/FILE)
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Updated 04 February 2023
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Industry stakeholders say currency depreciation posing existential threat to Pakistan’s telecom sector

  • Telecom operators maintain historic devaluation of the Pakistani rupee is hurting profitability, future investment planning
  • Pakistani telecom operators pay license fees and interest on instalments in dollars while making their earnings in Pak rupee

KARACHI: Pakistan’s telecom operators said on Friday the industry was facing an “existential crisis” due to the depreciation of national currency which was increasing their operational costs while disrupting investment planning.

The country has witnessed a major spike in cellphone usage in recent decades, taking its tele-density to 86.34 percent. According to official figures, Pakistan has 193 million cellphones and 122 million mobile broadband subscribers.

Telecom operators pay license fees and interest on instalments in the United States dollar, though they make their earnings in the Pakistani rupee which has depreciated by 25.93 percent during the current fiscal year. On Friday, the national currency also hit a new historic low of Rs276.58 against the greenback.

Given the current financial situation of the country, leading telecom players find themselves in troubled waters amid reduced profitability and declining possibility of expanding business.

“The telecom industry faces an existential crisis due to the continued devaluation of currency,” Irfan Wahab Khan, CEO of Telenor Pakistan that boasts of 25.11 percent market share, told Arab News.

“With the spectrum price and all its future instalments and interest payments in USD, each time the rupee devalues, it causes the overall price to increase significantly, impacting our profitability and making any future investments nearly impossible,” he continued.

The Telenor chief said the escalating interest rates and cost of capital, along with excessive fuel, electricity and other input costs, had severely affected the company’s operations.

Another industry player, Pakistan Mobile Communication Limited (PMCL), which operates under the name of Jazz and owns 38.23 percent market share, has also sounded alarm bells.

Aamir Hafeez Ibrahim, the Jazz CEO, took to Twitter on Thursday to highlight the prevailing challenges, saying the rupee devaluation had jeopardized the business case for telecom companies.

Ibrahim noted that 50 percent license renewal fee cost the company Rs44.5 billion last year. However, its 10 percent instalment this year was somewhere over Rs13 billion.

“Due to ongoing currency devaluation we’re unable to determine the amount we’ve to pay in instalment next year adding to uncertainty that no business plan can withstand,” he said in a Twitter post, adding: “Sadly wrong policy of pegging telecom license price to [US dollar is] pushing us from #DigitalEmergency to #DigitalCatastrophe.”

Last month, the PMCL paid Rs24.24 billion ($105.80 million) license renewal fees to the telecom regulator, Pakistan Telecommunication Authority (PTA).

Ibrahim said that telecom was a cross-sector enabler, building digital highways and facilitating other economic areas to create value as well.

“Unfortunately, in our country, the industry is still perceived as an opportunity to fill short-term revenue gaps for the government, which consequently deters a broader and longer-term policy agenda aimed at expanding universal broadband coverage, enabling everyone to access education, health care, banking, and other quality of life improving services,” he told Arab News.

“While we have talked a lot about Digital Pakistan, without the right policy interventions we could actually be looking at digital dark ages,” he added.

Telecom operators and industry experts agreed the solution to the current depreciation problems was to link spectrum prices with local currency and alleviate some tax burden.

“The government is in a position to mitigate the industry’s risk,” said the top Telenor official. “For starters, the spectrum price can be denominated in local currency as most countries do. This also helps alleviate the risk of currency devaluation.”

He also called for “rationalization of taxation” on cellular services and handsets along with reduction of regulatory dues.

Parvez Iftikhar, an international consultant on telecom policy and regulation, agreed with both the suggestions.

“When the operators say they are earning in local currency, they are right in demanding that the spectrum fee must also be paid in Pak rupees because it is not something that they import and pay in dollars,” he said while speaking to Arab News.

He denied having any knowledge of the actual profitability of telecom operators, though he maintained one way of measuring that was to look at their investment in the country.

“I don’t see any significant investment in Pakistan as compared to India and Bangladesh etc.,” Iftikhar said, adding: “This shows that the returns are not significant.”

“The telecom sector only needs enabling environment and facilitation to grow further,” he continued.

According to the PTA, the telecom industry revenue increased to about Rs694 billion during the last fiscal year and it contributed over Rs325 billion to the national exchequer.


Pakistan says over 20,000 Hajj applications received today

Updated 25 November 2024
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Pakistan says over 20,000 Hajj applications received today

  • Saudi Arabia has allotted Pakistan a total quota of 179,210 pilgrims for the upcoming Hajj pilgrimage
  • Quota of 5,000 has been allocated this year for overseas Pakistanis on “first-come, first-served basis”

ISLAMABAD: The Pakistani religious affairs ministry has said over 20,000 Hajj applications had been received by Monday, as the nation prepares for the annual pilgrimage slated to be held in June next year.

Saudi Arabia has allotted Pakistan a total quota of 179,210 pilgrims for the upcoming Hajj pilgrimage, to be divided equally between the government and private schemes. Around 15 designated Pakistani banks started receiving applications for Hajj 2025 from intending pilgrims on Monday. 

“20,170 Hajj applications received till Monday,” a spokesperson for the Religious Affairs Ministry said on Monday, saying applications were continuing to be filed at designated banks across the country. 

“Reception of applications under the government Hajj scheme will continue till December 3.”

A quota of 5,000 has been allocated for overseas Pakistanis on a “first-come, first-served basis,” the ministry said, adding that the lottery for the government Hajj scheme would be held on Dec. 6

Pakistan’s religious affairs minister this month announced the country’s Hajj 2025 policy, according to which pilgrims can pay fees for the annual Islamic pilgrimage in installments for the first time.

Under the government scheme, the first installment of Hajj dues, amounting to Rs200,000 ($717), has to be deposited along with the Hajj application, while a second installment of Rs400,000 ($1,435) must be deposited within ten days of the balloting. The remaining amount has to be deposited by Feb. 10 next year.

On Sunday, Pakistan’s religious affairs ministry said it had launched the “Pak Hajj 2025” mobile application to guide and facilitate pilgrims. The app is available for both Android and iPhone users.


Naval chief says Pakistan’s economic future ‘inextricably linked’ to maritime security

Updated 25 November 2024
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Naval chief says Pakistan’s economic future ‘inextricably linked’ to maritime security

  • Admiral Naveed Ashraf says challenges in Indian Ocean Region requires greater vigilance
  • He says Pakistan’s socio-economic prosperity can be assured by harnessing blue economy 

ISLAMABAD: Pakistan’s Chief of Naval Staff Admiral Naveed Ashraf on Monday emphasized the importance of maritime security for the country’s economic future, calling for robust measures to address “unprecedented challenges” in the Indian Ocean Region.
In a message issued to mark the Seventh Maritime Security Workshop, scheduled to run from November 26 to December 5 at the Pakistan Navy War College in Lahore, Ashraf highlighted the need to harness the country’s maritime potential while ensuring a secure environment for trade and economic growth.
He noted the Indian Ocean Region faced significant challenges, including geopolitical competition, nuclearization and transnational threats, compounded by rapid technological advancements.
“The country’s economic future is inextricably linked to the sea, which serves as mankind’s last reservoir for sustenance,” he said. “Securing our maritime domain is not merely a national priority but a necessity, requiring cooperation, innovation and vigilance.”
Ashraf stressed the potential of Pakistan’s maritime resources to drive socio-economic prosperity through the exploitation of the blue economy, enabled by a secure maritime environment.
His comments come at a time when Pakistan has made a strategic offer to landlocked Central Asian economies for access to its ports, allowing them to conduct trade via sea routes.
The initiative underscores Pakistan’s ambition to position itself as a critical hub for regional economic activity.
“Our rich maritime resources offer great potential for economic prosperity,” the naval chief maintained.
“Let us work toward a secure and stable maritime environment that benefits not only our nation but the global community at large,” he added.


One policeman killed, over 100 injured in clashes with Imran Khan supporters leading Islamabad protest 

Updated 25 November 2024
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One policeman killed, over 100 injured in clashes with Imran Khan supporters leading Islamabad protest 

  • Punjab inspector general says 119 officers wounded in violence by Khan’s supporters, party says scores of its followers also hurt
  • Protest ‘long march’ has coincided with visit of Belarus president, with government accusing PTI of trying to sabotage economic recovery

ISLAMABAD: Pakistani officials said on Monday one police constable had been killed and nearly 120 were wounded in violence by supporters of jailed former premier Imran Khan’s Pakistan Tehreek-e-Insaf (PTI) party, which is leading a protest march to the federal capital of Islamabad. 

Thousands of rallygoers reached the edges of Islamabad on Monday evening after protest caravans set out from various parts of the country a day earlier to call for the release of political prisoners, including Khan, among other demands.

The protesters set out despite the government refusing to grant the PTI permission to enter Islamabad for a sit-in. Last week, the district administration also imposed a two-month ban on public gatherings in the capital, citing security challenges and inconvenience to the public. 

Authorities have closed all schools in Islamabad and the adjacent garrison city of Rawalpindi, while the Internet and WhatsApp messaging services have also slowed as the protest march continues. All routes connecting Islamabad and Rawalpindi have been completely shut for the last two days, as are highways and roads from other cities leading to the federal capital. 

Addressing a press conference in Lahore, the provincial capital of Punjab, Punjab Information Minister Azma Bukhari said one policeman had been killed in clashes with PTI supporters. 

“Constable Mubashir has lost his life. Five people remain in critical condition,” the minister said. 

She added that 70 people had been wounded in clashes with the protesters just outside Islamabad, while there were reports of several other clashes elsewhere in the province. It was unclear if the 70 people were all policemen.

Inspector General (IG) Punjab, Dr. Usman Anwar, said 119 cops had been injured. 

“Four of them sustained firearm injuries caused by a weapon,” he told reporters. “Our forces could also use firearms but to avoid any mishap we kept them without firearms.”

He said several police officers had critical head injuries. 

“More than 22 police vehicles have been damaged. Despite this, the Punjab Police remains on duty, with 22,000 personnel still actively performing their responsibilities.”

Interior Minister Mohsin Naqvi said those who had given the call for the Islamabad protest were responsible for those who had been killed and injured.

“We have clearly communicated to all the Inspector Generals of Police, Islamabad Police, and everyone involved that those who issued this call [for protest] and incited people to gather will be held fully responsible for these actions and we will not leave anyone,” Naqvi said at a press conference after attending the funeral prayers of the policeman who was killed during the protests.

“FIRs [police report] will be registered against all of them. The protesters have fired live bullets, and our security forces could also do the same, but they only answered with rubber bullets.”

Khan’s party said scores of its workers were also hurt.

“TILL MY LAST BREATH”

The PTI march started on Sunday but could not reach Islamabad as shipping containers placed by the government on key points on major highways slowed the pace of the caravans. The PTI says its final destination is D-Chowk, a high-security area in the capital’s Red Zone that houses key government buildings and is a popular site for protests. Heavy contingents of police and other security forces have been stationed across Islamabad and at entry and exit points. 

The largest PTI protest caravan began its journey from Peshawar, the provincial capital of the Khyber Pakhtunkhwa (KP) province where Khan’s party is in power. It is being led by KP Chief Minister Ali Amin Gandapur and Khan’s wife Bushra Khan, who was released on bail in October after nearly nine months in detention. 

Khan has been in jail since August last year and faces a slew of charges he says are politically motivated. 

On Monday evening, the PTI said in a text to reporters that the rally had “broken through one of the biggest barrages of containers and is at the gate of Islamabad.”

“Until Khan does not return to us, we will not end this march,” Bushra said to supporters from atop the protest caravan as the PTI edged closer to Islamabad. “I will stand there till my last breath, you people have to stand by me. I will keep standing even if nobody does because this does not concern just my husband but the country and its leader.”

Islamabad police confirmed over 400 arrests related to the protest in the past few days, saying the detainees were being held in different police stations. The PTI said over 3,500 of its leaders and supporters had been arrested in connection to the protests.

PTI leader Shaukat Yousafzai, who is part of the caravan, told Arab News over the phone the march would carry on until it reached D-Chowk. 

“We will only return from D-Chowk when Imran Khan and other innocent party workers are released from Pakistani prisons,” he said. 

The PTI also said key leaders Gohar Khan and Ali Mohammad Khan had been allowed to meet the PTI flounder at Adiala jail, but no details were shared about the focus or outcome of the discussions. A second meeting with Khan was also reported late on Monday night. 

The PTI’s march has coincided with a visit to Islamabad by Belarusian President Aleksandr Lukashenko and a 68-member delegation to discuss investment deals. The government has accused the PTI of trying to sabotage the foreign visit in a bid to destabilize its economic recovery efforts. 

Yousafzai rejected this criticism, saying his party had called the protest well before the Belarusian delegation’s arrival was announced. 

“We have not blocked the roads,” he added. “The government has blocked the roads, creating a situation like this. The government should have held talks with the PTI instead of blocking the roads.”


Wheel-jam strike paralyzes Balochistan highways amid protest over kidnapped schoolboy

Updated 25 November 2024
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Wheel-jam strike paralyzes Balochistan highways amid protest over kidnapped schoolboy

  • 11-year-old Muhammad Musawir Khan was kidnapped by armed men in Quetta on Nov. 15
  • Government says law enforcement agencies are working for the kidnapped boy’s recovery

QUETTA: A wheel-jam strike paralyzed highways in Pakistan’s southwestern Balochistan province on Monday as protests over the kidnapping of an 11-year-old schoolboy entered their 11th consecutive day in Quetta.
Muhammad Musawir Khan, a third-grade student, was kidnapped from a school van by unknown armed men while on his way to school on November 15.
The family has not received any ransom call from the kidnappers in all these days since his abduction. They have also categorically said they will not pay a single penny to the kidnappers.
“Today, all national highways connecting Balochistan with the rest of the country are closed against the kidnapping of my son,” Raz Muhammad, the boy’s father, told Arab News. “We will continue our protest until he safely returns home.”
Muhammad urged Prime Minister Shahbaz Sharif and Army Chief General Asim Munir to consider Khan as their own child and play a role in his recovery.
Other family members echoed the sentiment, saying it was the state’s responsibility to ensure the boy’s recovery and improve the general environment of insecurity.
“We have been sitting here for the last 11 days to seek protection for all children like Muhammad Musawir Khan from these kidnappers,” Hajji Malang, the boy’s uncle, told Arab News. “Whoever kidnapped our child, we will not bargain with them for his release.”

Demonstrators are protesting over the kidnapping of an 11-year-old schoolboy in Quetta, Pakistan, on November 25, 2024. (AN photo)

The kidnapped boy belongs to a prominent tribal family involved in the gold trading business in Balochistan for decades. According to the family, he was abducted from Patel Bagh, a busy neighborhood in Quetta.
Political and religious parties, traders, transporters, lawyers and civil society members have all been visiting the protest camp to express solidarity with the family and demand the immediate and safe recovery of the boy.
Speaking to the media outside the provincial assembly, Chief Minister Mir Sarfraz Bugti said he thought of the kidnapped child like his own son.
“We are utilizing our full capacity and the government is making serious efforts to ensure his safe recovery,” he said.
Commissioner of Quetta Division Hamza Shafqaat shared the same update while speaking to Arab News.
“The government, along with all law enforcement agencies, is working diligently for the recovery of Muhammad Musawir Khan,” he said.
“We have shared our report on the progress in the recovery of the kidnapped boy to with the Balochistan High Court, chief minister and the provincial assembly, and they have all expressed satisfaction that the investigation is heading in the right direction,” he added.
However, Shafqaat declined to divulge details of the ongoing investigation.
Malik Muhammad Sadiq Kakar, senior member of Pashtoonkhwa Milli Awami Party, said that highways in Balochistan’s Quetta, Mastung, Khuzdar, Killa Abdullah, Chaman, Zhob, Killa Saifullah and Loralai districts were closed to protest the kidnapping of the child.
“We are sitting with the family of the kidnapped boy to express solidarity because we want peace in Balochistan,” he told Arab News.
Pakistan’s restive Balochistan province, which shares borders with Afghanistan and Iran, has been the site of a low-level insurgency by separatist militants for over two decades.
Other extremist factions, including Tehreek-e-Taliban Pakistan and Daesh’s Khorasan chapter, also have a presence in the region and frequently attack security forces and civilians.
Last week, Pakistan approved a “comprehensive military operation” in the province, targeting ethnic Baloch separatist groups attacking security forces and Chinese nationals working on the multibillion-dollar China-Pakistan Economic Corridor (CPEC).


COMSTECH, Pakistani conglomerate announce internship program for OIC member countries

Updated 25 November 2024
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COMSTECH, Pakistani conglomerate announce internship program for OIC member countries

  • International program hosted by Gourmet Industries, the largest food processing complex in Pakistan
  • Selected candidates will receive accommodation, meals, and return economy-class air ticket to Pakistan

ISLAMABAD: The OIC Standing Committee on Scientific and Technological Cooperation (COMSTECH), in collaboration with Pakistan’s Gourmet Industries, has announced the COMSTECH-Gourmet Industrial Internship Program for its first batch in January 2025, state news agency APP reported on Monday.

Hosted by Gourmet Industries, the largest food processing complex in Pakistan, the program offers 10 internships lasting four weeks. Selected candidates will receive accommodation, meals, and return economy-class air ticket to participate in the program, which aims to promote innovation, research, and skill development across various industrial sectors, offering participants practical training and exposure to advanced technologies and industrial processes.

The program will focus on key areas in food industry operations including bakery, dairy, and beverages, plant utilities, recycling through innovative RPET methodologies, shrink-wrap production, sugar mill logistics, and media training in journalism and broadcasting. Participants will gain hands-on experience in supply chain management, production processes, and sustainability practices also.

“The internship is open to applicants from OIC member countries holding a BS/BSc or MS/MSc in relevant fields and under the age of 40,” the report said. 

“The objective of the COMSTECH-Gourmet Industrial Internship Program is to foster innovation and research and development (R&D) across diverse industrial sectors, including food processing, engineering, plant operations, recycling, and so forth.”

The program will provide interns hands-on experience and exposure to cutting-edge technologies and methodologies, thereby enhancing their practical skills and theoretical knowledge.

“By engaging in real-world projects, interns will contribute to the advancement of industrial processes and the development of sustainable solutions, ultimately driving technological innovation and improving operational efficiencies in the fields of human nutrition and value addition,” APP added. 

“This initiative underscores COMSTECH’s mission to empower youth in OIC nations and advance technological development for socio-economic progress.”

Applicants have to complete an application form and upload requested documents (CV, Research Proposal, etc.) at: (https://form.jotform.com/243101366016444) till Nov, 30. Applicants can contact [email protected] for further information.