Mobile phone communication is getting cheaper in rates for the customers but the competition for success has left the cellular operators strained in terms of call rates and the revenue generated through sale of their services. Adding to their problem is a notable decrease in the use of cellular communication among the customers.

According to a news report, published in Daily Times (February 14, 2009), the Average Revenue Per User (ARPU) has dropped by 35% in the current fiscal year. One of the main reasons for the dwindling cell phone business is the high rate of taxes on cell phone services. Previously, for example, a customer would get a credit of 91 rupees per 100 rupees of credit upload; now the uploaded credit received per 100 rupees has dropped to 85 rupees. In addition, the rise in prices of daily life commodities and prevailing financial crisis have distracted many cell phone users from generous use of their mobile phones, both in calling and sending text messages (or sms). People are changing their calling habits, rolling down to a lower profile.

To cope with the challenge, cell phone operators have reduced their rates for calling and texting by as much as 35 percent. Ufone, Mobilink, Telenor, and Warid – the four major cellular communication companies in Pakistan – have introduced special packages for customers with lower calling and texting rates during particular hours of the night. Ufone has thus become popular for low sms rates while Mobilink is the hot favorite for inexpensive calls. Not surprisingly, many people, especially younger ones, find it convenient to make lengthy calls at night after 11 pm to 7 am. This convenience, in fact, is rousing concern among parents and elders of young boys and girls, complaining of romantic connections made over cell phones at night and doing away with their sleep and studies.

Despite the increasing fondness for the low-rate cellular communication, the growth of cellular operators is on decline. Statistics by the Pakistan Telecom Authority (PTA) reveal that against the 11.2 million subscriptions in cellular services in the year 2008, the current year has so far added only 0.58 million connections. It is worth mentioning that over 10 million unverified/unregistered SIMs have been blocked by cellular operators to prevent the abuse of their services.