KARACHI, June 26: The race for foreign investment has left the banking sector far behind the telecommunication sector, which emerged as centre of activities for foreign investment.

The major shift in the trend was due to massive growth in the telecommunication sector, which is still open to offer more to the investors.

After the acquisition of Union Bank, PICIC and Prime Bank, activities in the financial sector have slowed down while the telecommunications has recently received some good news from China and Gulf countries.

After China Mobile, which acquired majority stakes in Paktel, more companies have approached to buy stakes in the companies doing booming business in Pakistan.

The country’s mobile phone demand is rapidly growing and the government estimates that it will continue to grow at the pace of 1.5 million phones per month.

The government’s 11 months provisional data also showed that the telecommunications sector attracted $1.482bn while the banking sector received $967m.

“The banking sector products are not growing at the pace like mobile phone despite the fact that the banks still have a good chance to create demand for 160 million Pakistanis,” said Abid Saleem, an analyst.

Though the banks in Pakistan have rapidly increased their branch network across the country, but most of their profits are the direct outcome of the large banking spread, which is highest in the region.

The foreign investment in telecom sector during the last 11 months of the current fiscal was 60 per cent higher than the banking sector.

Analysts said this was a vital shift in the investment trend. The telecom sector could attract more money than the banking sector. Banks have succeeded to keep their profits level high for last four years, which brought stability in the sector and created attraction for the foreign investors.Gulf countries have shown more interest in telecommunication sector and Financial Times on Tuesday reported that the Singapore-based telecoms group (Singtel) is in advanced talks to purchase about 30 per cent of the company, in a deal likely to value Warid at $1bn.

Warid, which is owned by Abu Dhabi Group, began operations in Pakistan two years ago. It has 10 million customers — a market share of 17 per cent.

Oman Telecommunications Co., the Sultanate's biggest phone operator, is also in negotiations to buy a majority stake in Pakistan's WorldCall Telecom Ltd.

Last year China Mobile, the world’s biggest mobile phone company, bought 89 per cent of Paktel for $284m, its first acquisition outside its home market.

Etisalat of the Middle East has acquired a controlling stake in PTCL, while Telenor of Norway bought a licence and is one of Pakistan’s six mobile operators.