The mobile sector saw a return to strong subscriber growth in the quarter ended June 2009. With a total of 3.071mn net additions, this was far higher than either of the two previous quarters with Q109 reporting 1.671mn net additions and Q408 with a loss of 296,000. However, it was no match for the 5.5mn net additions reported in Q208.

Improvements in subscriber net additions have resulted from the market resuming growth following the implementation of the government’s re-registration programme two quarters ago. Operators remain keen on rebuilding their reduced subscriber bases, and with regard to this, they have taken a market segmented approach, appealing to customers through targeted, niche tariffs.

Benefiting from this approach were second-ranked operator Telenor, claiming 908,000 net additions in Q209 and a 29.6% share of the market, with market leader Mobilink on 29.2% with 897,000 net additions. Some way behind were Zong, Warid and Ufone, with net additional shares of 13.2%, 12.2% and 12.8%, respectively.

Although encouraged by the growth experienced during the quarter, concerns over the continued dominant growth in the prepaid market have also led operators to focus on ways of encouraging subscribers onto non-voice applications. Among the most popular during the quarter was mobile banking.

Mobilink launched its first mobile banking service in July 2009. The operator, together with Citibank, signed an arrangement endorsed by the State Bank of Pakistan.

Other forms of m-commerce are also taking shape. Zong plans on launching its m-commerce service in its next fiscal year and has yet to outline details of its market revolutionary model. It does already have a mobile payments service, launched in October 2008, allowing customers to register for the service on the internet and make purchases, which are added to their mobile phone bill.

The impact on ARPUs has yet to be felt, however. In the newly introduced ARPU forecast scenario, we note that, during 2008, ARPU rates fell by 13.3%, to reach US$2.04, this was in line with the 12.41% fall reported in the previous year of 2007. Thanks to a dominant prepaid market, limited non-voice applications and lack of supporting handsets and limited educations, this fall in ARPUs is forecast to continue until the end of our forecast period, when we estimate an ARPU of US$1.61 as of 2013.