Telecom Sector Brings No FDI, Sends $166 Million To Headquarters in FY2018

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Telecom operators did not bring Foreign Direct Investment (FDI) in Pakistan in the first eight months of the financial year 2017-18, but they earned well and sent back an amount of $166 million to their respective headquarters in the same period.

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According to statistics by State Bank of Pakistan, profit repatriation of telecom companies to their shareholders and investors have increased by more than five times to $166.8 million in the current financial year as compared to $28.5 million recorded in the corresponding period of last financial year.

Surprisingly, the sector that brought investment, in millions of dollars, to Pakistan in the last few years made no contribution in bringing FDI in Pakistan so far (July to February) in the current financial year.

No doubt, the telecom sector made notable investmentsĀ on the infrastructure and network and continued re-investment of its revenue in the local market earlier. Similarly, it also earned handsomely from the lucrative market of Pakistan, which is an encouraging sign for future prospects.

Over the last few years, telecom companies carried out the expansion of broadband internet services, which impacted significantly on the economy not only through tax revenues but through the utility of the technology by the masses.

The worrisome situation is the outflow of $33.8 million of FDI during the period of eight months of FY 17-18. On the contrary, the FDI inflows of $27.9 million were recorded in the corresponding period of the last financial year.

Financial YearsForeign Direct InvestmentProfit Repatriation
2011-12$50.1 million$54.8 million
2012-13$14.4 million$14.4 million
2013-14$38.9 million$41.8 million
2014-15$254 million$258.6 million
2015-16$174.5 million$176.2 million
2016-17$177.2 million$177.8 million

The Ministry of IT and Telecommunication (MOITT) should review its policy for investments and incentivize companies to bring FDI in Pakistan through tax rationalization, which is comparatively higher in the country compared with the rest of the world.


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Besides, it should monitor the expansion of 3G/4G networks and services in different parts of the country and set a target for telecom companies to speed up the upgradation of services in the next few years.

Originally Published on ProPakistani.com

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