State of Telecom Industry in Pakistan

As reported at ZD Net Asia, the outlook for text messaging in the Asia-Pacific region remains bright, according to a new study from Portio Research.

Despite challenges from other mobile messaging services–such as mobile e-mail and mobile instant messaging (mobile IM)–short messaging service (SMS) will remain the dominant force in the Asian region, the study outlined. This is in line with the situation in Pakistan where text messaging and its voice variants (such as bolo sms from mobilink or recently introduced zoom talky from Warid) are getting more and more popular. With voice sms there is no need to type and the receiver can retrieve the message at his or her convenience. Till full multimedia messaging (video / pictures)  becomes affordable, popularity of text messaging will continue .

Portio analyst White estimated 1.4 billion additional mobile phone users in Asia by 2012, and SMS revenue in the region will mushroom from US$16 billion in 2006, up to US$22.7 billion in 2012.

White added that regional SMS traffic within the same period will explode, fuelled by a flood of new subscribers and handset purchases in the Asia-Pacific. The number of SMS messages will spike sharply from 967.7 billion in 2006 to a staggering 2071 billion messages by 2012, he predicted.

In contrast, Portio’s outlook is different for the North American market. Mobile instant messaging (MIM) is forecast to supplant SMS as the mainstream messaging service within the next four years due to the proliferation of smartphones and wireless Internet, its study showed.

One problem in the US is the spam text messages. Recently a US company sent nearly 100,000 unsolicited text messages to Verizon Wireless customers offering them a prize vacation. Verizon Wireless sued the company which sent the spam and won the case. This is good news – spam in e-mail boxes is already a major headache for most of us.

White said that although there will still be more SMS users than mobile IM users, “our study forecasts the number of IM messages to grow more than SMS messages in the United States sometime after 2011″.

In Asia, doubt remains over IM’s ability to ever topple SMS as the mainstream messaging service. “SMS will remain the dominant peer-to-peer messaging service in Asia-Pacific, as IM will require the user to have ‘always-on’ services like GPRS or 3G,” said Alex Chau, senior research manager at analyst house IDC, in an e-mail.

Chau noted that in developing countries like India, China and Thailand, users are still using just the basic services, such as voice and SMS.

Portio’s White agreed with this assessment. “We do not see this trend in Asia…mobile IM will be popular in Asia, but not as popular across the whole region as SMS,” he said.

The Portio analyst added that, while mobile e-mail–another messaging competitor–will become popular, it is unlikely to pose a major threat to SMS revenues within the next few years.

“Mobile e-mail will continue to grow very healthily in the enterprise sector,” White observed. “But outside Japan, mobile e-mail will have little impact on mass consumer markets, only with the elite, high-end smartphone users.”

I’ll close with some research on this topic. In a recent paper from Norway titled “Text and Voice: Complements, Substitutes or Both?”, the authors show that when incoming messages and calls stimulate outgoing communications, services that are perceived as substitutes, such as mobile text and voice, may evolve into complements in terms of the price effect when the network size becomes large. The paper estimates the demand for text messaging in the Norwegian market and find that the cross-price effect of voice depends on the network size. Voice is a substitute for text messages for small network sizes, and a complement for large network sizes.

Fixed line numbering scheme in Pakistan is likely to change from 7-digit to 8-digits in coming years, according to a PTA paper.  For the public this is going to be an annoyance – after all, who likes this kind of change? But this change is unavoidable has to be as the current numbering scheme is not going to be enough …. Pakistan is running out of available numbers.  It will be a big and painful change but it has been implemented in other countries in the past. If executed well, it will provide better and cheapaer communication facilities.

Numbering schemes determine how many unique phone numbers can be assigned. PTA has invited comments through a 47-page paper (pdf) titled ”Public Consultation paper on Fixed Line Number Migration from 7 to 8 digits” on its website. The paper is quite comprehensive and includes a good review of Pakistan’s situation (numbering plan, geographic national plan areas, growth in demand etc) and also describes the numbering systems of a few selected countries of comparable size.

Here’s how Pakistan’s scheme is: So with an area code of say 021 there are only 8 million available numbers. And as of now Pakistan has 7 NPAs.

Here’s some general info from wikipedia:

Area codes in Pakistan are from 2 to 5 digits long – for instance 42 for Lahore; the smaller the city, the longer the prefix. All the large cities have a 2-digit code. Older exchanges have a 4, 5 or 6 digit number. Newer exchanges, those in the cities, have 7-digit numbers. It is common to write phone numbers as (0xx) yyy-yyyy, where xx is the area code. The 0 prefix is for long-distance dialing from within the country.

Also see this item covered in news media.

Affordable connectivity in remote and rural areas in developing world remains one of the top telecommunication challenges. In recent years a lot of  research has focused on solving this problem and options include Mobile wireless networks,  Fixed wireless technology such as Wimax, Wireless local loop and Satellite networks. Wireless Mesh Networks have also been proposed as a viable solution. 

There are a few organizations in Pakistan working on this – one leading research group is DRITTE which is an initiative for leveraging Information and Communication Technologies (ICT) for developing countries. For those interested in research work do take a look at this upcoming workshop on Networked Systems for Developing Regions. There is a blog at DRITTE site as well … the latest post there talks about Meraki, which is aiming to provide consumer wireless mesh Internet network designed to “unwire the world,” and bring Internet access to the next billion.

Talking about billions, I came across another interesting website NextBillion.net which also includes articles and resources about rural connectivity. Read this post titled “Wireless Mesh as a Transforming Tool” by Al Hammond. See the Wikipedia wireless mesh networking page for an overview. Al’s post talks about a pilot program in Vietnam and there is a link to a pdf paper titled “A New Model For Rural Connectivity“. Very informative, also includes an appendix about Wi-Fi phones.  Al has travelled to Pakistan as well and also written about mobile commerce. Here is an excerpt from the paper:

“The components of a community-based telecommunications network include:
1) an Internet Protocol (IP) network in lieu of a circuit switched network,
2) voice services that are provided through VoIP in lieu of custom hardware-based switching,
3) wireless distribution, be it Wi-Fi or WiMAX or, for the more remote locations, VSAT links for connecting the rural system to the Internet.

In this model, the local network is easily deployed, provides multiple telephony access points for both inter-community and long distance calling in addition to supporting data. There are several options for providing these services to the local community. One obvious approach is to upgrade an existing telecenter to become a true “last mile” solution provider by focusing on voice services, and delivering expanded access into the community through selected businesses or even homes that serve as “phone shops” for the immediate neighbors. Another approach is to turn an existing satellite ground station into a local community telco by adding Wi-Fi/WiMAX distribution capabilities and WiFi phones.”

Affordable bandwidth is the lifeblood of IT and Telecom industry. Since last year PTCL has been resisting the tariff cuts asked by the regulator PTA through court appeal. The battle seems to be near end (see earlier post here). As reported in the local press, High Court has issued a decision against PTCL. I am sure the consumers and business folks must have sighed in relief. Not sure if this is the end of this battle or if PTCL would try to find a technical loophole to delay tariff cuts. Read a report from Daily Times below … Let’s see if all this make any impact on PTCL stock price and earning forecasts.

The Pakistan Telecommuni-cation Authority (PTA) in a landmark decision on October 6, 2006 had substantially reduced various categories of PTCL’s bandwidth tariffs. The Pakistan Telecommunication Company (PTCL), which is now a privatized company, in reaction to the PTA’s decision filed an appeal in the LHC against the said decision.

The industry had been approaching the PTA to regulate the bandwidth tariffs emphasizing that the tariffs charged by the PTCL are abnormally high and thus do not give them any competitive advantage in the international market. Moreover, some investors also contested that the tariff structure of PTCL discouraged them to make investment in Pakistan, as it is cheaper to acquire these facilities from other Asian countries. This entire scenario had been hampering the broadband proliferation and has affected the growth of IT-enabled services in Pakistan that are heavily dependent on bandwidth tariffs.

The PTCL as a recently privatized incumbent fixed line operator has a market monopoly over telecom infrastructure and of late, according to the industry, has been engaged in anti-competitive practices. According to a press statement, the PTA is closely monitoring the PTCL’s anti-competitive activities and has many a time warned the PTCL to desist from taking unnecessary steps that can potentially bring infamy to Pakistan’s telecom market. The PTA has also recently concluded a few cases of industry complaints against the PTCL’s anti-competitive behaviour on which decisions will be announced shortly.

With the dismissal of PTCL’s appeal the decision of the PTA has been upheld by the LHC and it is expected that the reduced bandwidth tariffs shall have far-reaching implications on proliferation of broadband and IT-enabled services as bandwidth cost is a critical factor that determines investment in broadband and IT-enabled services.

After considering the arguments of all stakeholders, PTA had issued its decision and had announced that in the absence of cost-related information the bandwidth tariffs of PTCL should be in accordance with the international benchmarks of countries where effective competition exists.

GSM Association world congress was recently held in Barcelona (12-15 Feb 2007). This annual conference is the largest venue for GSM echosystem and attracts movers and shakers of GSM industry  from all over the globe. See a video here to get a flavor.  

One of the interesting featuresof this annual conference is the award ceremony which recognizes leaders and innovators in the mobile GSM area. The complete listing of GSM Award Winners is here. I’ll highlight a few mobile award winners here.

Best 3GSM Mobile Handset
* Sony Ericsson – K800 (shown on right)
* Samsung Electronics – SGH-Z560

 Best Ultra Low Cost Handset
Motorola – MOTOFONE. I am happy to say that I recently commended this phone here. Judges quote: “A sleek and full featured handset demonstrating that style and functionality are not irrevocably connected to price. Motorola once again shows the way in helping to bridge the digital divide.”

A FEW OTHER NOTEWORTHY AWARDS

Polymer Vision won the award for most innovative technology. Polymer Vision has developed the world’s first rollable electronic display. For the first time in history a display can be rolled out to a greater size than the actual mobile device itself.

ShoZu won award for most innovative mobile application. Its mobile multimedia delivery platform enables automatic delivery of published multimedia content to mobile phones with no user intervention; and allows one-click upload of multimedia files from the handset to photo sharing sites.

In the category of mobile enterprise product Telepo was the winner. Telepo provides fixed-mobile convergence. Its software solution converges business communications on desktop, fixed and mobile phones. Employees are able to access the same services and call handling features, with a consistent user experience on any device.

Thre are plenty of other winners which you can see at www.gsmawards.com. I’ll write another post about the winners in social impact category.

Here’s some interesting comparison list of top 20 fastest growing mobile companies of 2006 in Asia Pacific - data and analysis from Wireless Intellignece. Note there are 4 companies from Pakistan in this top 20 list.

Top 20 cellular net additions in Asia-Pacific – Q1 2007

Source: Wireless Intelligence, Feb 07

Here’s what Wireless Intelligence had to say about Pakistan.

In Pakistan, Mobilink (Orascom) is likely to stabilize at around a 50% market share through this year, to Telenor’s advantage – it is expected to grow by 72% year-on-year. Ufone and Warid are also fast growing operators, growing by more than 45% year-on-year and forecast to take share from Mobilink. By the end of 2007, Pakistan is expected to reach 63.2 million subscribers, reaching a penetration rate of 37%.

Have you ever been in a situation when you are stuck somewhere with time to kill and you start exploring whats on your phone and end up playing a game on your phone? If it has been a while that you played games on a small gadget then you may be in for some surprise. Mobile gaming experience has become much better over the last couple of years due to better processing power.  As noted by eMarketer: The potential value of the mobile gaming market goes beyond the dollars earned from sales of games themselves. Users who play games on their phones spend more money on wireless phone services overall, and in-game ads and the branding power of games will make mobile gaming a strategically important tool for advertisers and marketers

Business recorder recently reported that Warid launched new Mobile Games. Warid claims to be the first to introduce 3D mobile games in Pakistan. Warid mobile games users will have a possibility to send their data to the global table for a truly unique experience. The Mobile Gaming part of Warid’s web site offers many choices and allows users to choose games for their handset.

Hamid Farooq, Chief Executive Officer, Warid Telecom said, “This experience will delight sensations for all video-gamers with its comprehensive list of 10 genres: Action, Adventures, Platform, Classic, Multiplayer, Sports, Pacing, Branded, 3D Games and Strategy.”

Rivals of Warid also have games for their users. Telenor games and instructions to download are here. Mobilink also offers some basic games – you can see their list here.

As explained at Wikipedia, Mobile games are developed using platforms and technologies such as Windows Mobile, Palm OS, Symbian OS, Macromedia’s Flash Lite, DoCoMo’s DoJa, Sun’s J2ME (Java 2 Micro Edition, recently rebranded simply “Java ME”), Qualcomm’s BREW (Binary Runtime for Wireless) or Infusio’s ExEn (Execution Environment). Other platforms are also available, but not as common. Java was initially the most common platform for mobile games, however its performance limitations have led to the adoption of various native binary formats for more sophisticated games.

For more about the current news and views about mobile gaming, see mobilegames.blogs.com.

CNET publishes a list of 10 most popular phones in Asia. While their list is definitely NOT representative for whole of Asia (it is based on survey done in Singapore), it is still an interesting list to review. Sony-Ericsson tops the list and Nokia is behind. Below are brief descriptions of the top 4  from CNET’s list. Are any of these also popular in Pakistan ? Which is your favorite phone?

1. Sony Ericsson W850i. CNET Review: It offers a 2-megapixel camera, Bluetooth, and a digital music player. The Sony Ericsson W850i offers the great performance and high-end features we’ve come to expect from the company’s Walkman phones, but its usability is hampered by unintuitive controls.

2. Sony Ericsson K800i. CNET Review: With an amazing selection of business-friendly features, superior photo quality, eye-catching design and great performance, the Sony Ericsson K7800i comes in at the second spot. Almost identical to the previous model K790i but with 3G capability.

3. Nokia N73. CNET Review: The Nokia N73 boasts a 3.2-megapixel camera with video-recording capabilities, an integrated music player, a vibrant screen, Bluetooth, and a speakerphone. The phone also had extralong talk time and battery life, not to mention decent call quality. Overall quality is sluggish though.

4. Nokia 6233. CNET Review: stylish 3G phone; microSD card support up to 2GB; nice stainless steel finish; built-in stereo speakers; 2-megapixel camera. Some web-browsing issues, average batterly life.

If you do not have one of those Blackberry, Treo or windows smart phones which cost somewhere between Rs. 12,000-30,000 ($200-$500), but you want quick, free and secure access to your email on your current phone, Flurry mail is for you. All you need is data/Internet access on your phone (for instance GPRS, Telenor Edge etc) and Flurry takes care of the rest. Flurry can handle multiple e-mail accounts, shows attachments and also provides search capabilities.

Another cool feature is that you can import and synchronize your contactsto your phone through Flurry and then call or e-mail from the contact list. RSS feeds are also available. Flurrymail was a 2006 JavaOne Conference Award Recipient. Flurry was recently featured on New York Times as well in an article titled: Plain Cellphones Can Overachieve, With a Little Help.

How does it Work? Here’s the explanation from the Flurry website:
The flurry server logs into your email account and checks for new messages.

New messages are downloaded to the flurry server, compressed and encrypted, to await delivery to your cell phone. If you have opted for notifications, a notification is sent to your phone.

When you open the client, new messages are encoded and sent to your phone.

When you reply to a message, forward a message or compose a new message the above process proceeds in reverse.

Flurry has users from over 200 countries. I had the opportunity to ask Flurry mail CEO Sean Byrnes about Flurry’s growing user base in South Asia. He mentioned that there are 3 main reasons for its popularity:
  1. It’s free
  2. We support the full range of phones, not just the high end. Right now Flurry is in use  on over 500 different devices, which means that almost all modern phones are supported.
  3. It’s flexible, so you can use it to track all of your e-mail accounts, news and RSS and synchronize your contacts.

Kudos to Flurry for providing these useful services!