Much room for growth for Pakistan Mobile Comms and Banglalink Digital Comms: Moody's

Moody's Investor Services has done a peer comparison of Pakistan Mobile Communications and Banglalink Digital Communications, which it says have similar growth, potential and regulatory challenges.

Both companies have significant revenue-growth potential since wireless penetration and average revenue per user (ARPU) - US$1.90 per month in Bangladesh and US$1.70 per month in Pakistan - are lower than in other emerging Asian countries.

The regulatory environment remains challenging however. While the research service still sees significant growth potential, it also notes that Pakistan's government doubled the sales tax on certain handsets in June following the Punjab provincial government's imposition of a 19.5% sales tax on Internet usage. Similarly, Bangladesh levies a number of taxes and fees on telecom operators, and the introduction of a 3% supplementary duty on mobile usage in July will likely weigh on revenue growth, Moody's believes.

However, spectrum auctions could stress Banglalink’s liquidity. The Bangladesh Telecommunication Regulatory Commission (BTRC) had expressed its intention to hold spectrum auctions in 2015, allocating 10.6 megahertz (MHz) of the 1,800 band for a per-MHz base price of US$30 million and 15 MHz of the 2,100 band for US$22 million per MHz, but has deferred them several times. Moody's expects that BTRC will auction the spectrum over the next year.
 

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