ISLAMABAD, June 10: Telecom sector remains a major source of revenue generation for the government as Rs100.5 billion were collected in the form of taxes, duties and regulatory charges during the previous year, the Economic Survey 2007-08 said.

“Service sector continued to maintain a solid pace of expansion at 8.2 per cent compared to 7.6 per cent in 2006-07 as over three-fourth (75 per cent) contribution to this year's growth came alone from the service sector,” Finance Minister Naveed Qamar said here on Tuesday while releasing the Economic Survey 2007-08.

“Therefore, this year's growth is services sector-led-growth,” the minister observed.

Referring to the contribution to government revenues, the survey recorded that a total of Rs36.6 billion as general sales tax or central excise duty was collected by the government. It is expected, the survey projected, the collection would grow exponentially in the coming years.

During 2006-07, the government also collected Rs17.6 billion as activation tax on new mobile connections at the rate of Rs500.

A foreign direct investment (FDI) inflow of $811.6 million also came in the telecom sector during 2007-08 (July-March), which is almost one-third of the total FDI in the country during the period. This trend has continued and during July 07 to Dec 07, $653.4 million FDI inflows came in the telecom sector.

The telecommunications sector liberalization also created huge employment opportunities (direct and indirect) and it is estimated that 1.36 million jobs were created in 2006-07 as compared to 705,368 in 2004-05.

According to the survey, Pakistan has become one of the fastest growing mobile markets among emerging telecom markets.

This year the sector grew by 80 per cent whereas average growth rate in last four years is more than 100 per cent.

Total cellular subscriber base today stands at 82.5 million (March 2008) whereas it was 34.5 million in 2006 and 12.7 million in 2005. The tremendous growth is attributed to many internal and external factors starting from deregulation down to implementation of mobile number portability.

Almost 90 per cent of total population in Pakistan is covered with mobile networks in addition to availability of fixed and Wireless Local Loop services.

Till December 2007, more than 7,011 cities, towns and villages have mobile networks by one or all operators.

But growth in the broadband market is slow despite the fact that services have been available since almost five years.

Currently there are a total of 12,689 broadband subscribers which provide a dismal picture when compared with other similar economies.