State of Telecom Industry in Pakistan

 This picture is just another reminder before October ends that we still need to remember and support the victims of Earthquake. Here’s one easy way to do that.

Quite interesting - some will find it hilarious. Looking to raise your social standing and got money to spend? Ufone is giving these so-called ”Golden Numbers” through online bidding as you can see from the screen snapshot.

This is a worldwide fact that certain phone numbers (or number plates!) carry prestige and social status and are worth substantial money. As you may have read in my previous posts, this is something which is part of our social fibre. Ufone is using an interesting approach to make money from this craze. By the way there are some comments on this blog where readers want to know how they can get a premium number .. so here you go!

Thanks to Tee Emm for bringing this to my attention.  Tee Emm provides some insights:

Numbers that contain a repeated pair within their entirety are called silver number. Hence, by this mob definition, this number would be considered a silver number: 03xx 384 7788.  Next comes the golden number - four or more similar numbers. Generally, the companies would make a geniune effort to provide their post paid customers with a silver or a golden number either free or at a cost.

With certain of its marketing practices being somewhat ’slack’, when Warid launched, their telemarketers used to call every 0300 post paid number telling them that their ‘Warid’ number is already reserved and they just need to call from the mobilink number to get it activated in their name. Hence, they blocked the entire series from the general sales.

Here’s more from Ufone site about the bidding process. 

You are required to enter the serial number and 12-digit secret PIN from an unused Rs.100 Ufone scratch card every time you want to submit a new bid.

Your bid will only be accepted if it is at least Rs.5000 more than the current highest bid of your desired number. Bid amount should be in multiples of Rs.5000. Bids will only be accepted between 10:00am and 10:00pm every day.

Telenor has announced solid results for third quarter 2007. See details at Telenor’s corporate site. Telenor’s stock is up since the earning announcement.

Telenor subscribers in Pakistan reached to 12.58 million - however the rate of growt slowed a bit. For details and Pakistan specific information, see the complete spreadsheet from Telenor or click on the thumbnail for a higher resolution quick snapshot. For a review of Telenor’s worldwide performance see this piece from Telecom magazine.

As presented in my previous coverage, Telenor has been successfully working to build its reputation and subscriber base.  When you look at the performance and subscriber numbers note the very high percentage of prepaid customers. This is true for all operators in Pakistan and a common phenomenon present in the emerging market telecom which pulls the ARPU down. The next challenge for operators such as Telenor is to bump up the ARPU. By introducing a wide range of value-added services such as comics, mobile tv and convenient picture uploading they are already on track for this. Next year results will show the uptake on these services.

In a major step forward for WiMAX, ITU has approved WiMAX to be included in the International Mobile Telecommunications category . Here’s an excerpt from Information Week.

The WiMax standard got an important international thumbs up this month when the International Telecommunication Union, an agency of the United Nations, agreed to recognize it as a next-generation wireless technology. With its inclusion among International Mobile Telecommunications standards, WiMax joins a list of recognized 3G mobile technologies that includes CDMA and FDMA.

WiMax will get its biggest initial tests in countries that are trying widespread deployments, such as Taiwan and Pakistan. Taiwanese officials last week pledged to spend $664 million on a WiMax development program, looking to make the country the center of WiMax equipment manufacturing. Taiwan plans to cover the country with mobile WiMax in what would make it the technology’s biggest test bed, and a business-government partnership also unveiled the technology’s first WiMax application lab to let developers test new WiMax applications such as VoIP and entertainment.

This decision was taken at the World Radio Communication Conference which the Chairman PTA also attended.

The World Radio Communication Conference (WRC-2007) in Geneva will address the use of radio frequencies and the global demand for spectrum fuelled by rapid technological developments and growth in the Information and Communication Technology (ICT) sector.

WRC-07 will also deal with any radiocommunication questions with worldwide ramifications. The WRC-07 agenda focuses on some 30 items related to almost all terrestrial and space radio services and applications, including aeronautical telemetry and telecommand systems, satellite services, mobile communications including 3G services, maritime distress and safety signals, digital broadcasting, satellites for meterology, and the prediction and detection of natural disasters.

As posted by Tee Emm on TGP. For calls to certain phone numbers, which are over a threshold of monthy charges, there may be a charge when the line is busy. Callers will get a recorded voice response telling you that the number can not be reached at this time and the caller will pay for the call. Just another way PTCL helps you serve and pays its bills! According to this news clip, PTA has asked PTCL to remove this “facility” as it is unfair.

Follow the interesting discussion at Telecom Grid Pakistan.

Pakistan’s smallest cellular phone company by subscriber numbers, Instaphone has may have been sold to SK Telecom of South Korea with management control and majority shares, according to unofficial sources.

This was first posted at TGP by Uzair Ahmed. See my previous coverage of this topic. The official notification and details from SK Telecom is yet to be made so this deal is not certain yet.

As reported in the local media.

We had news of SK Telecom biding for Pakcom, which operates with brand name of Insta Phone in Pakistan. The situation got clearer in recent days when the officials confirmed the news. And now we are in good position to quote that Instaphone has been sold to SK Telecom. The details of the agreement are not made public; however, the agreement confirmation has arrived from both sides.

Mr. Shahid Feroz, CEO Insta Phone Pakistan, commenting on the acquisition said that this would be the opening of another success chapter in Pakistan’s telecom market. However, he didn’t reveal the details of the contract, but he was optimistic that the final agreement will be duly signed with in one month’s time. Mr. Feroz disclosed some of SK Telecom’s plan for Pakistan market. He said that the company is willing to rollout country’s first 3G network. He also told that the management rights will also shift away to SK Telecom along with majority of shares in Pakcom.

Insta Phone, which started its service back in 1990, hold 350,000 customers in Pakistan, operates using TDMA technology. Sources have told that Assessment of Pakcom was prepared by Hongkong and Shanghai Banking Corporation Limited (HSBC) and Deutsche Bank of Germany.

SK Telecom revealed three key business areas to be concentrated on. These are the furtherance of their global reach by expanding internationally, developing the convergence of telecommunications and broadcasting, and searching for new business opportunities.

With an aim towards becoming a major player in information communication under an economic umbrella that will be over all of East Asia, SK is actively seeking multifaceted business opportunities in overseas markets.

Established in 1984, SK Telecom has a number of interesting networks under its belt including CDMA 2000, HSDPA etc. True to the uniqueness of South Korean market, the company offers a number of wired/wireless and application services.

PTA has released the numbers for Sep 2007 mobile subscribers. You can see the previous trends and analysis on this post, the discussion is equally valid for the latest numbers as it shows that Telenor is emerging as a strong leader and soon it will be close to Ufone. Ignoring the ways these are counted the number crosses 70 million mark. Nice going!

Briefly, here are the subscriber numbers for September:
Mobilink: 28,571,845
Ufone: 15,421,459
Telenor: 12,578,459
Warid: 11,866,664
Paktel: 1,232,613
Instaphone: 337,422

I previously wrote about the ways telecom sector has contributed to the economy of Pakistan and how various benefits have spread in other business sectors of the country. The qaumi khazana (government revenue) has also done very well because of tax and other revenues. Here’s a snapshot (source: Deloitte) of the additional revenues which mobile telecom companies pay to PTA. Given this solid cash flow to the telecom authority it is even more important for them to safeguard consumer rights and protect them from the various issues we discussed here.

PTCL is another step closer to its previously announced plans to let go of employees as it has permission for the Rs 17 billion transaction. These are not layoffs in the strict sense. These are voluntary separations. There is more reported in DAWN but the package details are still not known.

I have seen many such schemes during my work life and I think they are not necessarily a negative thing. For one thing this is the reality of our age - more and more companies are going this route and lifetime jobs are becoming a thing of past. For the employees it can be a handsome package that allows them to try out something new. PTCL can afford to provide a good deal in return for a smooth transition to a “new” organization. This can be a particularly good option for those PTCL employees who have marketable skills and are able to find some other job. For PTCL itself this can mean a number of things - lesser employees, lower overhead, ability to bring in younger, fresh blood and the chance to make its investors happy. However if PTCL fails to capitalize on this and its leadership cannot make a positive change these advantages will be short-lived.

Further analysis will follow when the package deal details are announced.

Tee Emm’s post about th need for a local internet clearing within Pakistan is intersting and thought-provoking. According to Tee Emm, the local clearing should avoid (or minimize) expensive foreign exchange costing international links and should result in very affordable bandwidth rates - using the SKA (sender keeps all) or cheaper local bandwidth models.

A couple of questions around this idea come to mind: If the private sector has to do it alone then the business case for this should be well established - has anyone worked on this? or should it be a public-private sector partnership? In my opinion this ought to be part of PTA’s mandate. By the way I hope that the IT ministry and PTA realize that they desperately need to do something about broadband in Pakistan.

Tee Emm notes that in Karachi, the majority of the traffic between the 3 well-known ISPs ( Worldcall, Cybernet & Multinet) is exchanged outside Pakistan on Transworld, PIE and on IPLC towards KL in Malaysia. He mentions the following issues (see the full post) with the current situation.

Short Term Problems:

• Uniform (high) Internet prices across the industry
• Unnecessary 20% to 35% for-ex spending on Int’l circuits that could be sold to the right customer at a premium
• No cheap ‘local bandwidth’ available to users
• No incentive for ‘remaining local’ to users or content publishers
• Network outages beyond Pakistan result in network outages inside Pakistan

Long Term Problems:

• No impetus for establishing local data center for Internet hosting needs (excluding vertical DS such as Banking etc)
• As more of the country embraces Internet, ’short term problems’ identified above will get magnified.
• No mirrors of popular contents - even those willing to place their contents near the Pakistani Internet users are amazed at the absence of local IDCs.
• No real development of Urdu and other regional languages contents on the Internet.

You may have experienced difficulties with the telecom network of Pakistan in peak activity days. Pakistan Telecom Authority is responsibilities for keeping a check on the quality of services provided by the telecommunication companies.  For this purpose PTA conducts surveys and the results are posted on its website (see here for QoS of Mobile companies and here for that of ISPs).

In addition to mobile/WLL companies and ISPs, PTA recently asked an outside firm to report on the International roaming service quality. Is international roaming really that important? You be the judge. The study used a methodology based on a globally distributed but centrally controlled automated test call system. Here’s the the paper (pdf) and the link for more information about International Roaming QoS (PTA site does not always work with direct links).

There’s some upcoming changes in the way these surveys will be conducted. Here’s more about the new plans to check the QoS:

Pakistan Telecommunication Authority (PTA) has started an automated country-wide survey to check the quality of service (QoS) being provided by Cellular Mobile Operators to the consumers. The survey is being conducted through QoS monitoring equipment recently acquired by PTA. The survey would be completed by December 2007. After the completion of survey, results would be finalized and action would be taken against the companies not meeting the required quality standards.

Besides, checking Cellular Mobile service quality, PTA is also conducting a survey of Internet Service Providers (ISPs) across the country. This survey will cover both rural and urban areas.

PTA, the regulatory body of country’s telecom sector, regularly monitors the QoS of all telecom services by conducting comprehensive surveys throughout the year, results of which are published in the media. In addition, periodic inspections based on subscriber’s complaints are also conducted.

It may be mentioned that the last QoS Survey of Cellular Mobile Operators (CMTOs) was conducted in 2006. In September 2006, PTA conducted Wireless Local Loop (WLL) Survey to check the quality of WLL operators the result of which were published in the press and on PTA website. PTA has also carried out ISP survey in 2006.

A PTA spokesman said that PTA has sufficient experience in conducting QoS surveys, and now with latest equipment acquired, it will monitor the services of telecom operators more effectively. He further said that these checks and surveys have resulted in quality improvement of services being provided by Cellular, Fixed and Wireless operators as well the ISPs.

Continuing the series on mobile communication benefits to Pakistan economy, here I have highlighted the economic impact and included some employment numbers. Source is the Deloitte report mentioned in the earlier posts.

Here’s the information about the employment numbers from the mobile network operators (not from the whole sector as is noted below) - this is related to the mobile value chain post. I hope that this data will serve as a good reference to students and researchers. It also makes for a good case study for emerging telecom economies.