Internet Taxes Are Negatively Impacting Telecom Industry: Moody Reports Confirms

October 20, 2015

Moody’s a leading provider of research, credit ratings and risk analysis has recently published a report for highlighting the potential of Pakistan and Bangladesh Telecom’s industry. The report highlights two organizations with a strong potential, Mobilink from Pakistan and Banglalinks from Bangladesh.
According to the report published by Moody’s, Mobilink has a strong potential growth for revenue owing to lower the average revenue per user (ARPU) and as well the wireless penetrations compared to other Asian countries.
The report also mentions that Mobilink operates in a 5 player market, is also known for its fierce competition, it has managed to remain and enhance its current position of leadership and the largest market share of 29%.Bangalink which is the second largest operator in Bangladesh and captures 25% of market share among the 6 companies operating in Bangladesh.
Similarly the report further states that in spite of having a stable stand and a sustain potential for future growth the evolving regulation in both the countries is set to obstruct the augmentation of number of subscribers and revenues.
The report focuses on the much talked about the fact in recent reports on ProPakistani where they highlights the impact of excessive taxation on the telecom industry, specially on internet Data.
The doubling of taxes on various categories of imported handsets had a significant impact on the phone penetration in Pakistan which is confirmed by the report. Similarly by the implementation of a data tax of 19.5% by the Punjab Government to a province which has the largest number of cellular subscribers is a negative impact on revenues. The tax was a crease effect of the taxes imposed on internet data by Sindh and KPK provinces. Moody’s report raffle interesting parallels between Mobilink and Banglalinks by stating that in both countries Governments are introducing new taxes which is ominously obstructing the growth of revenues and I avoiding the potential for expansion in these two markets.
Regardless of all these challenges, the report states that both of the companies are performing well in their respective market as a result of innovative, coherent and advent-grad strategies.
Mobilink has recently maintained its lead after biometric re-verification campaign, and it resulted in authentication of 87% of its over all customer base and it reported an increase of 1% in its market share. This report corroborates the potential of Mobilink for its growth as it builds on past success and seems future growth.

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Hamza Khan


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