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October 18, 2019

Pakistan lags peers in mobile internet adoption

Business

October 18, 2019

KARACHI: Pakistan needs to address a major challenge of low mobile internet adoption to maximise the potential of digital transformation and increase economic contribution of the mobile industry that is equivalent to 5.4 percent of GDP, communications industry body GSMA said on Thursday.

UK-based GSMA, which represents more than 750 telecom operators and 350 companies worldwide, said smart phone adoption in Pakistan is 37 percent compared to an average 48 percent in South Asia. Mobile phone connections exceeded 154 million in the country. Of them, 62 million of these are based on mobile broadband technologies. “Pakistan significantly lags other countries in the region in terms of mobile internet adoption,” GSMA said in its country-oriented report. “Even when access exists via available network connectivity, mobile adoption still lags behind.”

GSMA said only a fraction of the 89 percent of the population covered by mobile broadband networks subscribe to a mobile internet service. “Lack of relevant local content and basic and digital literacy skills are key issues in mobile internet adoption,” it said. “Another factor that limits mobile internet usage is that mobile subscribers in Pakistan are affected by taxes that apply to devices, SIM cards and usage charges. These taxes are particularly likely to affect the prices ultimately paid by consumers and may have a strong impact on the poorest consumers, reducing their ability to subscribe to a mobile broadband service.” GSMA further said some 31 percent of women who do not own a mobile phone in Pakistan report that disapproval from their family is the top barrier to owning a mobile phone, while only 4 percent of men in the country reported this as a barrier at all.

GSMA, however, said the economic contribution of the mobile industry would increase in both absolute and relative terms, reaching $24 billion in 2023, and accounting for 6.6 percent of GDP. In 2018, the total value added generated by the mobile operators alone – taking into account direct, indirect and productivity effects – in the country was around $16.7 billion, equivalent to 5.4 percent of GDP, the global trade body said.

“The majority of this increase will be driven by improved productivity, particularly from the increasing adoption of mobile internet services,” it said. “Wider network coverage and the rapid adoption of new 4G services could further accelerate growth and, subsequently, the mobile industry’s contribution to economic growth.” GSMA estimated that mobile operators and the ecosystem provided direct employment (formal and informal) to around 320,000 people in 2018.

“To fully exploit the opportunity that mobile technology presents to achieve Pakistan’s national development aspirations, key stakeholders on this journey (the government, the development community, civil society organisations, the mobile ecosystem, and the private sector) need to collaborate to accelerate the impact of mobile-enabled digital transformation on socioeconomic progress in Pakistan,” it said.

GSMA said while mobile ownership is relatively high among men the country has one of the largest mobile ownership and mobile internet usage gender gaps in the world, “which limits overall penetration of mobile subscriptions”.

GSMA further said there is need for more early-stage investment and a more investor-friendly legal framework that would strengthen the ecosystem.

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