Saad Khan

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The discussions and debates about an apparent slow down in the Pakistani telecom sector are in full bloom these days. While the telecom growth has certainly taken a nosedive and indicators prove this assumption but what would be its impacts on a common Pakistani and more importantly on thousands of people who depend on telecom sector for their bread and butter? This is a question that needs to be answered as we mostly look at the bigger picture with telecom professionals in mind.The increased call tariffs and heavy taxation on balance uploads/mobile cards has badly affected the vendors. I recently had a discussion with some of mobile cards vendors in Islamabad and they opined that their sales have seen a slump of almost 25%-30%. Same is the case with cell phone vendors as the prices are climbing due to devaluation of Pakistani rupee. The decline in business has resulted in job cuts in some instances. These guys get very nominal salaries but still were earning something for their families. If the telecom growth comes to a stagnation point then a massive unemployment among these folks is a writing on the wall.We don’t have exact statistics of people working in telecom related professions (am referring to vendors, cell phone technicians and not telecom professionals) but rough estimates put their numbers at around 100,000 - 120,000. In most of the cases, these people are sole bread winners of their family thus the number of affectees of telecom meltdown will be in millions if there is a major telecom boom burst in Pakistan.There will not be a total crash in Pakistani telecom sector but the growth will remain on a lower end. This means that with the passage of time at least half of these vendors will have to close their businesses resulting in unemployment of 50,000 to 60,000 workers and financial crisis for half a million people (considering the impacts on their families).Can we avoid this from happening? I guess we can’t as the process of ‘natural selection’ is necessary in the telecom sector due to its over saturation. The telecom boom provided job opportunities for thousands of illiterate and semi-illiterate guys and it still is quite common that a guy who has nothing to do lands in a mobile shop. But that would not be the case in future. We have to think some alternatives about these folks otherwise expect a rise in the already high crime rates.

9 additional thoughts for this post.

  1. Farzal Said:

    Fraud activities - tricking user into buying airtime and sending it over through SMS/USSD and hope of winning rewards - is on the rise.

    BTW - I wouldn’t call it meltdown. The sector continues to grow at twice the GDP even with high pressure of taxes and overall economic situation

  2. Saad Said:

    Faraz,

    Let’s say it a meltdown in the making :)

    The saturation point is fast approaching and coupled with the economic crisis, we can expect a telecom bust here. Anyways let’s see what future has in store.

  3. Tee Emm Said:

    I allow the author and G&W to use the image at my page (incidentally shot by my very self) to use the image without assigning the credits :)

  4. Osama A. Said:

    Sorry about that T - maybe I’ve been away from the blog for too long but I missed that.

  5. Saad Said:

    Sorry Tee…

  6. Mackey Said:

    Last month I paid 800 Rs. tax on mobile phone bill of Rs. 3200.

    I bet it is going to renovate parliament house and presidential palace.

  7. Ivan Komarov Said:

    To Farzal:

    If those committing fraud are content providers registered with the operator — you should file a complaint with the Telecom operator. If they do what is called spoofing — i.e. illegally using somebody’s number to spam people — also complain. We provide a solution that stops such illegal use of the SMS/USSD gateway.

    Ivan

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