Telecommunication industry of Pakistan

The exchange of information by electronic mean at a distance places is telecommunication Telecommunication industry is one of the fastest growing industries in Pakistan. At the time of independence Pakistan has inheritated with 14,000 landline and now there are over 94 million mobile connections. In 1994 an agency was formed name Pakistan Telecommunication Authority which is responsible for the establishment, operations and maintenance of telecommunication in Pakistan. Oct 2010 is the year of highest mobile saturation rate in the south Asia region according to PTA .In June 2011 PTA reported that the overall cellular phone subscription has reached 107 million with increase of 2.7 million new numbers in the past two month. Some of the telecommunication companies are: Mobilink Ufone Warid Zong

In fact it is the fastest growing industry in Pakistan but yet there are some factor which are affecting this industry potential. I explain these factor using two well famous analysis. PESTEL Porter Five forces

Full analysis of Telecom industry using PESTEL and Porter Five Forces Scanning the environment is the most important step in strategic management process, which is conducted to find out all those trends and events that can control an organizational efficiency in both positive and negative way. Internal environmental analysis helps in finding strengthen and weaken of the firm. While external environmental scanning helps to analyze external forces effecting the industry like economic, political, cultural, technological. This analysis basically helps find out that

what the threats for an industry and what are the opportunities. This will further help to enhance the strength and also help in minimizing weaknesses of the industry. PESTEL Analysis: A PESTEL Analysis is the way of scanning the macro-environment that affects all the companies working in the particular industry. PESTEL is the abbreviation of Political, Economical, Social, Technological, Environmental, legal. Political Analysis: The factor which are totally under the control and supervision of Government and political parties come under it and it directly influence the industry and all its works In Pakistan the major political issues are : Political instability. This factor always threatening for any industry because it always keep a fear in there mind that if the Government change they come with their own rules and policies. Risk of Martial Law. This is also the major issue for all the industries working in the dictatorship because they cant able to explore themselves and grow as they could be. Terrorism. Terrorism is the Major problem that Pakistan facing from last couple of year that become the major hurdle for the growing of the telecom industry in Pakistan. As the environment now a days is so unpredictable for security issue that no one knows about any activities of terrorism. Pricing regulations. The massive fluctuation in the pricing policies also creating trouble for this industry. Development of PTA. This is the very intelligent step of making such a authority in country which carry out all the legal working of this industry and help in making business in Pakistan more efficiently. But still when government find that there is some deficiency coming in their policies government come into action and make their own policies.

Economical Analysis: The factors which are totally under the control of the financial institute like state Bank of Pakistan is come under it. These banks help the industry in growing there businesses and help them when they are facing crises. Economic condition influence my Government For all the working and supervision of this sector there is PTA but still some times play their role and start intrepting this secotor and start imposing there own policies by politicians. Over all condition of economy is very poor Pakistan economy is going down day by day which are creating problem for any industry working in this scenario. As the inflation rate is increasing and value of currency in going so down the value of loan payable in increasing. Efficiency of financial market is not that much effective: In Pakistan after having the state bank lot of financial work is still carry out by government. There is a continuos improvement in the Rate of interest which is very much high then any country which create a trouble for telecom industry too take loan. Tax rate increase Currently Pakistan increase the tax rate which reduce the income of the telecom sector

Foreign direct investment

During 2010 telecom sector attracted US $142.7 million FDI was 26.4% if the total FDI. Because of this factor government is trying to give maximum benefit to the telecom industry. Lower Labor Rates in the world As the labor rate of Pakistan is too low as compare of other countries in the world so this is the plus point for the telecom industry.

Fastest growing Industry in the Pakistan Telecommunication industry is the fastest growing growing sector in Pakistan that is the beneficial thing for this sector industry and shows that investment is quite comfortable in telecommunication sector. Social analysis: Social analysis is directly attached with the people and their culture they are living. As the system of Pakistan is very social country people here are very much living in a family system and they always want to be in contact with their family member that is one of the reason why this sector is so much flourishing in Pakistan. As Pakistan there is lot of celebration so that they need to come in contact with there family member this create the lot of opportunity for the telecom industry to make this things possible for the Pakistani culture.As the population is increasing as a very high intensity this will increase the number of cellular usage. There is also some negative factors come under this that is low literacy rate that the people are usually UN educated which create problem for them to understand the language. Another negative factor is the corruption which is major threat for any industry in Pakistan. Technological Analysis: Technology is very much effective tool in todays modern world any advancement in this sector can affect the industry and if the industry cant able to work according to the technological advancement it will create a swear problem for them. Because of todays technological advancement the telecom industry is decreasing and they are giving lowest rate to the people to remain in contact with relatives with their family.