Telecom sector attracts record foreign direct investment
By Adnan Rafique

ISLAMABAD—Telecom sector has received about 1,824 million dollar, which is 35 per cent of total Foreign Direct Investment (FDI) in the country, an official of the Pakistan Telecommunication Authority (PTA) said here Tuesday. Total share of telecom sector in FDI in 2001-02 was 1.2%, 2002-03 1.7%, 2003-04 21.8%, 2004-05 32.5%, 2005-06 54.1% and in 2006-07 35.6%.
The official said liberalisation, deregulation and growing competition in the telecom sector has compelled many companies to expand their infrastructure across the country, which requires more investment from foreign sources.
In the last couple of years, the telecom sector has attracted record inflows of foreign direct investment and in 2005-06, the sector received over US $1.8 billion and emerged as the only sector of the economy to have such huge investment.
Telecom sector has attracted about 17 percen more FDI than the financial sector and 25 percent more than oil and gas sector in 2006-07.
The official said mergers and acquisitions can better serve the customers and enhance the profits of companies who acquire their companies.
During the last four years Pakistan’s telecom sector has experienced unprecedented changes with respect to technology, regulation and growth.
The liberal FDI policy by the government and deregulation and privatization of the sector has triggered a wave of international acquisitions in the sector.
Stiff competition, squeezing profit margins and lack of investment resources have forced some players to rethink whether to go on their own thus convincing them to offer their shares to other strong players in the industry.
Renowned companies from Gulf and East Asian region with in-depth experience in the sector are looking towards Pakistan as a lucrative market.