PACRA Maintains Entity Ratings of Pakistan Mobile Communications Limited

Pakistan Mobile Communications Ltd (“PMCL or the Company”) holds a leading position in Pakistan’s telecommunications industry, capturing approximately ~37% of the market share and serving over 73mln cellular subscribers as of March 2025. It is also the foremost provider of 3G and 4G services in the country. The ratings reflect the Company's robust business profile, characterized by its strong market position, continuous strategic expansion and commitment to innovation. The Company remains dedicated to expanding its portfolio, unceasingly investing in innovation and strategic growth to reinforce its market leadership. This commitment is evident in its ventures into Digital Financial Services (DFS), offered through Jazz Cash and Mobilink Microfinance Bank, driving financial inclusion and digital transformation. Additionally, it is actively developing solutions in data analytics, cloud services, fintech, content streaming, and mobile entertainment, further solidifying its industry stewardship. In the current cellular market, three major players (Jazz, Zong, and Telenor) collectively hold ~86% of the market share, with Jazz and Zong combined controlling ~63%. Mobile teledensity now reached ~80.3%, this reflects significant barriers for new entrants. As per, Pakistan Telecommunication Authority, the telecom industry recorded ~17% revenue growth, reaching PKR ~955.2bln in CY24. This growth was primarily driven by the expansion of 3G and 4G services. Out of the total, the cellular mobile operators (CMO) contributed ~PKR 629.2bln. In CY24, the Company's topline grew by ~14%, primarily driven by repricing strategies that boosted average revenue per user (ARPU). Additionally, the Company achieved a remarkable turnaround in net margins, rising from ~1.9% in CY23 to ~15.3% in CY24. This improvement was largely fueled by higher 4G penetration and increased adoption of digital services, reinforcing its strategic growth trajectory. The rating takes comfort from formidable sponsors' support and strong business volumes. VEON is committed to strengthening country’s digital ecosystem and developed the largest homegrown OTT platform, JazzFi, Tamasha, Simosa, Garj and various cloud platforms. The Company's financial risk profile remains adequate, with comfortable coverages, cashflows, and working capital cycle. Capital structure is leveraged, and borrowings are mainly comprised of long-term borrowings. In CY24, the leveraging increased to ~69% (CY23: 53%) primarily due to license fee payments and capital expenditure requirements and inclusion of short term debt towards the end of year at sub KIBOR rate.
The ratings are dependent upon the sustenance of a leading market position, robust revenue growth and profitability, and a sound financial matrix. As capital structure becomes leveraged, maintenance of sound financial discipline is imperative to hold.

About the Entity
Pakistan Mobile Communications Limited – brand name ‘Jazz’ commenced its operations in August 1994. The Company is a subsidiary of International Wireless Communications Pakistan Limited, which holds ~85% of the issued share capital in the Company. VEON Pakistan Holdings B.V holds ~15% of the issued share capital in the Company. The ultimate parent Company is VEON Ltd. VEON provides essential communications and digital services to ~160mln customers in Six of the world’s most dynamic countries. The Company's Board of Directors (BoD) is mainly composed of representatives from VEON. Mr. Aamir Ibrahim, the CEO, has over two decades of experience in the local and international markets.