Pak Datacom Limited reported a net profit of PKR 110.16 million (EPS: PKR 9.29) in 9MFY25, marginally higher than PKR 107.83 million (EPS: PKR 9.09) in 9MFY24. Management explained that Pak Datacom partners with local service providers to purchase bandwidth at wholesale prices, receiving rebates based on operational areas, which it then sells to customers. Subscription revenue is linked to bandwidth consumption.
The company also offers solar equipment sales and tailored solutions to corporate clients. Currently, it is conducting a feasibility study on hybrid service arrangements. Pak Datacom holds a market share of 30–35% in VSAT services. The company represents two major international telecom firms in Pakistan—British Telecom and Orange Telecom.
As a pioneer of VSAT services in Pakistan and Bangladesh, Pak Datacom has established VSAT networks for the Pakistan Army, Navy, and Air Force. It has also provided VSAT solutions to NADRA, SNGPL, and serves banks and oil companies. Pak Datacom has traditionally financed its operations through internal resources, avoiding bank debt.
Despite a dividend payout ratio that exceeds earnings per share, the company has sustained positive growth since August 2020. Among the 16 IT & Telecom companies listed on PSX, Pak Datacom stands out as one of the most profitable, maintaining an average annual payout ratio of 61% (excluding bonuses issued in 2020 and 2021). Revenue per employee increased markedly from PKR 3.4 million to PKR 9.3 million in CY24.
Revenue performance during FY25 showed strong growth: PKR 287.16 million in 1QFY25, PKR 654.29 million by 2QFY25, and PKR 1,256.02 million by 3QFY25. The first two quarters were slow due to the launch of new business lines, with revenues from these ventures realizing in during 3QFY2, where the quarterly revenue matched the combined total of the first two quarters.
Management expects this growth momentum to continue into the final quarter. Pak Datacom has partnered with Kacific to provide highspeed satellite internet to underserved areas. Unlike Starlink, which is awaiting regulatory approval in Pakistan, Kacific is operational and focused on affordable broadband solutions in regions lacking infrastructure. The company is also negotiating with SUPARCO to obtain distribution rights for Starlink.
A critical regulatory hurdle is the Government of Pakistan’s requirement that uplinking facilities be located domestically. Starlink approached Pak Datacom via British Telecom seeking 12,000 subscribers for a wholesale contract; management expects this market to mature over 3–5 years. The minimum monthly Starlink connection cost of PKR 30– 40,000 is not affordable for households and a hurdle to achieve 12,000 subscribers. To improve poor indoor connectivity in many Pakistani buildings, Pak Datacom is piloting in-building solutions such as antennas and small cells for government and corporate premises.
The company holds three-year contracts with banks, with no switching costs. Management noted that FY24 profitability was negatively impacted by exchange losses, whereas prior year results benefited from exchange gains. Looking forward, the global telecom services market is expected to grow at a slower pace, with IDC projecting 1.6% growth to $1,535 billion in 2025, down from 2.2% in 2024. The global market is forecasted to grow at a 6.2% CAGR from 2023 to 2030, while Pakistan’s telecom market is expected to grow at 7% over the next five years. Pak Datacom has significantly outperformed these averages, achieving a 23.4% CAGR over the past three years, surpassing the national average by 16.4%. The company plans to upgrade its network, retain customers through competitive pricing, drive digital transformation, and pursue international expansion. Its sustainability focus includes solar energy initiatives, strategic partnerships, smart investments, business diversification, and prudent cash flow management.
To meet rising demand, Pak Datacom will continue growing existing businesses, launch new ventures, and maintain steady, profitable growth. A stable exchange rate outlook supports the company’s continued profitability
Important Disclosures
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