It and cellular growth is surpassing Pakistan’s GDP, economic and industrial growth, the latest business results confirm.

While the GDP ranged between controversial estimates and claims of 2.7 per cent to 3.7 per cent, the IT industry and cellular growth in the just-ended financial year 2011-12 has been very significant.

Besides cellular phones growth reported by Pakistan Telecom Authority (PTA), the sector’s another institution, the financial market and equity regulator Security & Exchange commission of Pakistan (SECP) report for fiscal year 2011-12 is also upbeat. SECP says the number of registered IT companies, foreign direct investment, and exports of their services and products recorded “ a handsome growth.”

SECP says the number of IT companies registered with it rose to 260 in financial year 2011-12, rising from 209 in fiscal year 2010-11, and came in with “considerable investment.” As of now, after sectors like trading, services, and religious travel, IT ranks fourth among all sectors. IT companies have a variety of specialisations, including software production and services, mobile applications, gaming and graphics, hardware systems and computer networking.

IT sector reported a 13 per cent growth in FDI investment inflows, rising to $ 45 million in financial year 2011-12. Software development saw an FDI rise of 12.8 per cent to $ 16.7 million. IT services reported a 12.16 per cent increase in investment at $ 28.2 million.

IT exports recorded a 13 per cent increase to $ 247 million — up from $ 217 million in financial year 2010-11, according to State Bank of Pakistan (SBP), the central bank.

At the same time, cellular business has done still better. The number of cellular subscribers rose to 119.86 million at end of financial year 2011-12. The increase in the first eleven months of the year alone was 10.966 million.

“The number of new connections has been rising at a monthly average of 0.99 million in July-May of financial year 2011-12,” reports Pakistan Telecom Authority (PTA) the industry regulator.

“The overall teledensity of cellular phone users reached 68.60 per cent by the third quarter of financial year 2011-12. It means, every 68 persons out of 100 own a mobile phone connections in Pakistan,” PTA also says.

There are five major cellular companies operating in Pakistan, including Egypt-based Mobilink, U-fone — a subsidiary of etisalat-owned Pakistani telecom giant Pakistan Telecom Company Ltd (PTCL), Norway’s Telenor, UAE-owned Warid, and Chinese-owned Zhong.

Mobilink , the biggest operator, has 36.4 million subscribers. Telenor, even though a new comer which has caught up fast, stands at number two with 29.89 million subscribers. Ufone is subscribed by 23.5 million people. Zong has 16.56 million subscribers, while Warid has 13.7 million.

All companies are furiously competing, easing tariffs and expanding the range of their services to attract customers. “The subscriber growth was recorded in urban and rural areas both, in different age groups and income classes,” analysis of company reports indicates. The number of subscribers among lower income groups and the younger, especially the students, is growing fast.

In-spite of the fact that the growth of new cellular subscriber in the big city like Karachi, Lahore, Hyderabad, Faisalabad, Peshawar and Islamabad is close to saturation, the number is still on the rise. A large number of big-city subscribers have multiple SIMS of various companies among the five. A big segment of school-going students, becoming younger and younger in age groups, are purchasing cellular phones these days to use SIMS for communication, entertainment and social and contacts.

Customers are using the variety of new services, with more than one SIM of various companies, to benefit from on-net calls, SMS bundles, for professional social and entertainment purposes, user-preference analysis indicates.

Cellular services are expanding in the rural areas and villages which were not previously served by land-line and traditional telephone services. The five operators haven expanded their network infrastructures. But still vast, far flung areas are without infrastructures, and are yet to be opened for mobile phones. The operators are attracting new customers by offering free air time, competitive services and even holding lotteries to give out prizes and cars to new customers.

The overall number of cellular connections is a bit on the high side, because a number of people have multiple SIMS from competing operators. There have been cases of even criminals using several SIMS for unlawful activities. In view of this, PTA has limited the number of SIMS to five that can be provided to a single individual. Previously, there were cases of persons holding even up to 50 SIMS. It has also been made obligatory on operators and their outlets to sell SIMS only on the basis of National Identity Cards (NIC) which are issued by the government. A customer has to show the original NIC, and provide the company a photo copy of the same, for the operator’s record.

The most interesting aspect of the IT-cellular phone business and investment is that it is growing at a decent pace, while the overall economy is moving in a rather slow mode. IT-Cellular investment still has a good business and profit potential.

Views expressed by the author are his own and do not reflect the newspaper’s policy.