Effects of 3G and 4G Technology on the Economic Growth of Pakistan

As per the recent news, on Wednesday, 23rd April 2014, Pakistan successfully completed the auction for third generation telecom spectrums by raising $1.112 billion or 111 billion from the process. Now is the time to concern ourselves with the benefits and effects of 3G and 4G technology on the economic growth of Pakistan. Which network managed to secure what in its bag is another story for another day. (Refer to the previous article ‘’Advent of 3G and 4G technology in Pakistan’’ to get the facts and figures)

“After this auction, not only 132 million subscribers but the whole Pakistani nation has taken the road of progress,” Rashid Khan, the chief executive of Mobilink said.

Last year in August, a study by the UK-based consultancy said Plum 3G could boost Pakistan´s GDP.

Effects of 3G and 4G Technology on the Economic Growth

The report further concluded that:

  • 3G could result in additional GDP value between 380 billion/PKR and 1,180 billion/PKR up to the advent of 2020.
  • The government will be able to generate around PKR 23 billion to 70 billion additional tax revenue (it depends upon the technology penetration scenarios)
  • If the next spectrum licenses are issued today, they can yield up to 900,000 new jobs till 2018.
  • Immediate revenue from 2.1GHz award can be in between 100 to 180 billion Pakistani rupees.
  • Further delay in license auction could cost the GDP a loss of 5 billion rupees per month up to the next 7 years OR revenue loss of PKR 300 million per month.

In Indonesia, (fairly comparable economy) mobile broadband services helped e-commerce grow by 56% between 2006 and 2011 with an average of 11% per annum. Hopefully  we can expect a similar trend in Pakistan too.

Cheap mobile phone telephony took Pakistan by storm in the early 2000s, but only 3.3 million people are signed up to broadband internet, according to PTA figures, offering a huge, untapped market for faster web speeds.

Information Technology Minister Anusha Rehman spoke highly of the auction as a boon for Pakistanis unable to afford computers and fixed-lined internet connections.

“Through this, the cheap mobile phones of the under-served people having a price of eight to ten thousand rupees will be become their computers,” she said.

Effects of 3G and 4G Technology on the Economic Growth of Pakistan

A bad news for consumers is that the auction will not immediately translate into the advent of 3G connection on your mobile phones. As per the fact, the timeframe agreed upon between the PTA and mobile operators envisions 3G roll out within the next six months of the auction.

In the first phase, services will be available exclusively in Islamabad, Karachi, Lahore, Peshawar and Quetta then later on in other cities from the four provinces.

The second phase, which will start after about a year and a half of the auction, envisions the expansion of 3G services to 80 more cities.

In the third phase, which will begin in about four years from now, 90 per cent of all tehsil headquarters will have access to 3G services.

For now, as one can estimate how expensive 3G and 4G technologies in Pakistan will be. Although with an expanding customer base, it is expected that 3G and 4G will be available in cheap packages but it will certainly take some time, around 3-5 years before anyone can easily make use of this technology.

But while many welcomed the long-awaited advent of 3G, some on social media lamented the continuing government ban on video-sharing website YouTube.

You may also like...