Latest telecom statistics highlight a squeeze in industry growth with overall teledensity coming down to 61.9% in Jan’10. In this regard, cellular teledensity in Jan ‘10 has declined to 58.2% from 59.6% in Dec ‘z09. After twelve months of consecutive growth, the total cellular subscriber base has declined by 2.22%MoM to 95.4mn in Jan’10 as the regulator’s data correction process depressed industry growth, in our view. In this regard, Warid was the worst affected as its subscriber base declined by 2.65mn subscribers (14%MoM decline) in Jan ‘10. That said, other server operators managed to post a sequential growth in subscriber addition. The WLL segment also posted a consecutive decline in Jan’10 as total WLL subscriber base decreased by 3.5%MoM. Within the sector, we continue to like PTCL which offers exposure to landline, WLL and the cellular market (Ufone). Current price implies an Accumulate stance with a target price of PkR24.31/share.
