The Impact of Macroeconomic Factors and Policy Issues on Telecom Sector Performance in Pakistan: An Econometric Analysis

Abstract

Using a time-series data, the paper appraises allocative efficiency of
the telecom sector in Pakistan through some of the macroeconomic and
policy variables. Results of the study reveal that the openness of the
telecom sector to foreign firms and the existing size of population have
led to an improvement in efficiency of both the fixed and cellular
networks. However, findings on the impact of real per capita GDP and
the existence of a separate regulator remain mixed. The study also
discloses that cellular networks appear to be benefiting from slow
growth of fixed-line networks. The paper suggests that the
attractiveness of Pakistan’s telecom sector to foreign firms needs to be
maintained so that the country could benefit from the latest
technological developments and could attract essential finance needed
for development of the country.