Pakistan’s largest telecom company, Jazz, has recorded $1 billion in revenue for the first nine months of 2024, marking a significant turnaround after a two-year stretch of underwhelming financial results. The company’s strong performance comes amid the challenges of currency depreciation in 2022 and 2023, which had previously created a mismatch between dollar-indexed operating costs and rupee-dominated revenues.
Jazz’s growth in 2024 has been fueled by the company’s aggressive pivot to the ServiceCo model and Pakistan’s relative economic stability. Its nine-month revenue has risen by 25% year-on-year in dollar terms, with EBITDA increasing by 20% in the same period.
Behind the Growth
Jazz remains the largest market for Veon Group, its parent company, with 71.6 million customers out of a total 154.2 million mobile users. In Q3 2024, Jazz demonstrated impressive growth, with revenue increasing by 22.6% year-on-year in rupee terms and 28.5% in dollar terms, reaching Rs. 99.9 billion ($359 million). The company’s EBITDA in the third quarter rose by 14.7% in rupee terms and 20.2% in dollar terms, reaching Rs. 41.4 billion ($149 million).
This growth is largely attributed to the increasing proportion of non-telecom services, particularly investments in fintech, entertainment, and enterprise services. Digital financial services, especially JazzCash, have shown strong performance, increasing revenue by 85% year-on-year. By leveraging cross-selling strategies, Jazz has successfully lowered customer acquisition costs and improved distribution efficiency.
By the end of Q3 2024, JazzCash had 19.2 million monthly active users and issued 118,000 digital loans daily. Its Gross Transaction Value surged to Rs. 8.4 trillion ($30.2 billion), growing by 59.4% year-on-year and 13.6% quarter-on-quarter in rupee terms, and 67.1% year-on-year and 13.5% quarter-on-quarter in dollar terms. The lending segment’s revenue also increased by more than 2.5 times year-on-year in rupee terms and 2.6 times in dollar terms.
Expanding Its Digital Presence
Jazz has focused heavily on expanding its digital offerings, which now comprise 26% of total revenues, growing 27.2% year-on-year. Capital expenditures for the telecom giant have increased by 99% year-on-year, largely driven by efforts to expand and upgrade its 4G network. However, this increase also accounts for the inability to import equipment in the previous year due to restrictions.
In addition to telecom services, Jazz has made strides in the local OTT space. Tamasha, Pakistan’s largest home-grown streaming platform, expanded its reach in regions like India and Sub-Saharan Africa. The platform gained 10.6 million monthly active users and earned Rs. 146 million ($0.5 million) in advertising revenue by partnering with over 50 advertisers.
The 4G Multiplay Strategy
Jazz’s 4G multiplay strategy has proven to be a game-changer, as the number of digital subscribers has now surpassed traditional telecom customers. The company has 49.4 million 4G users, representing 69% of its total customer base. Jazz’s multiplay users, who account for 30% of monthly active customers, generate an average revenue per user (ARPU) that is 3.5 times higher than voice-only customers.
The company is investing heavily in expanding its digital services, having spent Rs. 33 billion ($118.5 million) to augment its operations in areas like banking, cloud computing, data centers, digital healthcare, and entertainment. Additionally, Jazz has invested Rs. 41 billion ($147.2 million) to extend its high-speed mobile broadband network to remote areas in Pakistan.
A Digital Future for Jazz
2024 marks a pivotal year for Jazz as it evolves from a traditional telecom operator into a conglomerate with dedicated Strategic Business Units. With its growing focus on digital transformation, Jazz is positioning itself as a key player in Pakistan’s technology ecosystem. The journey from a cellular operator to an IT powerhouse has begun on solid footing, and it remains to be seen if the company can maintain its momentum going forward.
