Foreign Direct Investment (FDI) plays very crucial role in global business activities. It can help an enterprise with new and alternative marketing channels, relatively low price production facilities, cheap labor, approached unique technology, competitive environment, unique products and different investment opportunities. It is collection of assets, new technology, expert management, and easy access to market. It provides investment benefits to both home country and host country by the passage of time. It enhances the growth, skills, jobs and development of the host countries. The Government of Pakistan has opened foreign investment in telecom sector, because it a very strong sector among other sectors in terms of economic growth and development of the country. If we review past few years of Pakistan Telecom Sector?s performance and economic growth and development of Pakistan, the FDI shows positive and significant impact on telecom sector of Pakistan, but gradually FDI reduces due to some factors like Political instability, Terrorist Attacks, Less Secure Environment, Inflation, Weak Leadership, Low Literacy Level and Fluctuation in Economic Growth.