State of Telecom Industry in Pakistan

In our previous discussions we have observed the growth rates and overall positions of the mobile companies. Telenor has emerged as one of the leading company in 2007 with about 8 million new subscribers (or SIMs if you want to be accurate). Despite a few growing pains such as low ranking in the PTA quality ratings, Telenor is poised to push further its brand and subscriber growth.

Telenor has also started to become more involved in social activities. In addition to the typical corporate social responsibility activities, Telenor has sponsored recent Startup Insider series event in Islamabad. That is a good trend and I hope that it will continue. Companies such as Telenor can make a big impact in terms of guiding and training the youth through such activities.

Here’s an interview of Telenor CEO in which Tore Johnsen talks about the total investment Telenor has made, agreements with Nokia-Siemens & Multinet and his views on WiMAX and 3G. Excerpts:

We understand the government’s ambition of introducing 3G in the market, but growth and investment in the basic mobile infrastructure should not be sacrificed, as there are too many people still without basic access to mobile telephony.

we demand that the government should consider 3G not as a licensing opportunity, but rather as allocation of additional spectrum linked with roll out obligations and not hefty upfront fee. PTA and FAB should also make additional UMTS spectrum available in order to have equitable spectrum allocation

As if Pakistan needed one more issue, we have the botched YouTube blockage attempt which caused anger and frustration in Pakistan, plenty of confusion and some conflicting emotions, and possibly a YouTube outage. This BBC report alleges that YouTube went down for 2 hours because of the technical misunderstanding by PCCW, an Asian ISP. But the outage itself, if any, is less interesting to me. My take is that now that global media is paying attention to this lets use this opportunity to deal with this persistent Internet blcoking issue in Pakistan and turn things around. Enough has been written already so I will point out some of the items of interest here and invite you to share your thoughts.

I agree with my friend Tee Emm who wrote a post: The Tube Trouble and Why its a Good News

The persistent problem (of Internet censorship done the wrong way) is not being intermittently flashed to us any more – instead, this event throws it right into our faces.

That Internet censorship is bad and useless is an established fact but that it happens worldwide in both developing and developed worlds is even more established fact. In the absence of compelling Internet applications in Pakistan, Internet remains the sole killer application for the broadband mass uptake the government appears to be so concerned about.

Adil Najam has repeatedly written about the censorship and the flawed approach where government assumes the role of nation’s moral guardian role. Adil points to the possible political motivation for the ban at Pakistaniat.com:

The general opinion is that th ban is more “political” than “cultural”. A large number of videos with actual footages of electoral rigging were placed on YouTube and the view is that the “ban” or the “technical difficulties” that have come up are really a way to distract attention in Pakistan away from these videos, at least for the time being.

The ban may already be over but the repercussions will be there for a while. The technical angle to the Internet censorship and limitations of the Internet infrastructure in Pakistan is important as well. I am sure Google is looking into this as well. Since I don’t live in Pakistan and can’t experience it first hand I’ll refer back to Tee Emm’s post:

Now is the time stop using Cisco ACLs and use layer 4 solutions where the filtering must happen.

I believe this will force the PTA and the government (and the trigger happy PTCL’s PIE) to upgrade their infrastructures so that the delicate balance between civil liberties and our societal sensitivities is well kept.

Related Items:

• News.com on Pakistan’s role in YouTube utage
• Pakistan hijacks YouTube
• Telecom Grid Pakistan
• Technorati

$99 unlimited calling plans have been recently introduced in the US by 3 of the largest wireless carriers. This has been making headlines in the US media and blogs. Many thought such plans will not come this soon as the US wireless industry has been very slow to adopt consumer-friendly trends. I started thinking whether this kind of flat rate unlimited calling plan will ever make sense in Pakistan? If so, for how much? Is Rs.10,000 a reasonable number?

Back to the US market – there are a number of analysts who think that this price war is going to hurt the wireless carriers’ bottom line. These announcements sent the shares of the wireless carriers like Verizon and AT&T down.

I see this as an interesting experiment which these large companies can afford. It will squeeze companies like Sprint who are already struggling – and may be that is part of the intended impact. Interestingly a large percentage of the revenue grwoth of these wireless companies is from data usage, for which the plans are different from calling plans. For instance Verizon will offer customers monthly data plan options of 50 MB for $39.99 a month or 5 GB for $59.99 a month.

I am interested in a true flat rate unlimited data and voice plan – which should make a phone like BlackBerry an even more attractive choice!

Saw this report in the US media about an interesting new approach for providing Internet access to remote areas which lack infrastructure. The idea is to send balloons which soar 20 miles into the stratosphere, each carrying a shoebox-size payload of electronics that acts like a mini cellphone “tower” covering thousands of square miles below. WSJ reports that Google is partnering with Space Data, the company behind the balloon idea, and may even buy it.

Watch the video – by the way hinterland is the part of a country where only few people live and where the infrastructure is underdeveloped. In the context of third world countries entire provinces are hinterlands!

Additional excerpts from WSJ article.

Read more »

After many months of intense complains from consumers about automatic activation of Pakistan Package by PTCL, there is some decisive action coming from PTA (Link to the offiical statement in pdf). Better late than never!

Pakistan Telecommunication Authority (PTA) has directed PTCL to refrain in future from announcing any pre-activated package without customers’ consent and without prior approval of the Authority.

These directions came in the wake of PTCL announcement of “Pakistan Package” on December 1, 2007 wherein the package was activated on all PTCL numbers and they were to be charged at Rs. 199 per month.

Taking cognizance of the consumer complaints, PTA has directed PTCL not to charge Rs. 199 from those subscribers who are unable to opt out of the package and have NWD bill of less than Rs. 200 per month in the corresponding months.

It has also directed PTCL to reduce the time period of subject package to 60 days with no extension. As announced by PTCL it was a limited time offer which was extendable and now it would be available for only 2 months. This decision is taken to ensure healthy competition and to safeguard consumers’ interest.

The Authority has further said that PTCL is directed to refrain from launching/announcing any promotion or tariff package without prior approval of the Authority by submitting complete details of such package(s) to the Authority at least ten (10) days in advance and also to refrain from pre-activating such packages without customers’ prior consent.

It is always pleasant to write about a trend, revisit that topic a few months later and report progress. A few months ago I wrote about how views about entrepreneurship are changing in Pakistan. I mentioned some success stories. with the emphasis that the successes are neither incidental nor anomalies. The Startup insider series is a solid evidence of the positive momentum and shows the resilience and determination of a small group of dedicated leaders such as Jawwad, Jehan and Osama. See the list below and look up some of them on the web.

You can read all about it at Green & White, where Osama Hashmi has blogged about all the events, starting from Karachi to Islamabad to Lahore. These events, first of their kind, have drawn tremendous crowds and sparked the entrepreneurial spirit of many. Here’s the description of upcoming event, on Feb 24 in Lahore. Theme is: Who is my customer?

Startup Insiders is coming to Lahore again on the 24th of February. This time the event is supported by LUMS and will be held at the LUMS Campus itself.

An incredible panel is aggregating together again, and this times fans of Jawwad wont be disappointed:

• Faisal Qureshi, CEO, Kolachi Advanced Technolgies
• Zia Imran, CEO, VahZay Pvt Limited
• Jawwad Farid, CEO, Alchemy Technologies
• Salim Ghauri, President & CEO, Netsol Technologies
• Osama Hashmi, CEO, CDF Software
• Jehan Ara, President
• Fahd Bangash, CEO, Amaana
• Zafar Khan, CEO, Sofizar

PTA has asked for bids for consulting on three important topics (see below). which will have far reaching impact on Information and Communications Technology in Pakistan. Feb 25 is the deadline. some of the industry veterans had been asking for local Internet Exchange peering for a long time and it is good that finally there is some activity. PTA has taken the lead even though some of the topics are not limited to telecommunication. Regardless, if the right groups participate, this should benefit the IT industry in Pakistan as a whole. See complete information at this page on PTA website. Follow the links below for the details ((pdf documents) for each paper.

1. Local Internet Exchange Peering Points
2. Strategy for Public Data Warehouses
3. Digital Signature Infrastructure

This is the page on PTA site where all consultation papers are listed.

I presented the 2007 mobile subscriber numbers for the major mobile companies a few weeks ago. Here’s another view. Lets review CMPak as it went through a huge transformation and struggled in the beginning. Paktel started out with 1.33M and ended the year with 1.98M. Not too bad but the interesting point is the sudden increase of Paktel subscriber numbers in November. In October it lost 175,871 subscribers but in November it gained 720,546. How do you explain this sudden shift? Is it just the way PTA reports its numbers? Or was there a marketing promotion behind it? I am curious to hear your thoughts.

Navigation, traffic and location based services on mobile phones are one of the hottest value-added data services. Where available, they are one of the largest money makers for wireless carriers and content service providers (traffic, search, other information). However only a handful of countries have high resolution digital map data to support the full suite of these services. Nevertheless traffic information can be very useful anywhere in the world and location aware mobile marketing is supposedly the next big thing. Some of the companies and services in this field include TeleNav, Networks In Motion (used by VZ Navigator), TelMap, MSN Live and Google maps. Most services require GPS capability on the handset but other technologies are also used to estimate location.

Here’s how these services work. I’ll share TeleNav GPS service description from InBabble to give you an idea of how these services work. I have recently tested the Networks In Motion product and found it to be both useful and user-friendly.

TeleNav GPS Navigator is a subscription-based application which can be downloaded to more than 200 different types of mobile phones and devices. The service provides turn-by-turn voice and on-screen driving directions with 3D moving maps (just like an in-car navigation system or standalone personal navigation device). Addresses can be inputted into the phone via the keypad or using voice recognition. Alternatively, a customer can preplan trips online via MyTeleNav. If a driver makes a wrong turn, they are automatically rerouted. TeleNav GPS Navigator also includes features like traffic alerts with one-click rerouting, updated gas price listings, more than 10 million business listings, location sharing and restaurant reviews.

Last year I wrote about the ICT growth in Pakistan, India and China and compared the situation of telecom industry there (here and here). I saw a paper on this topic which provides comparative analysis of ICT infrastructure in India and China. It presents conclusions which are consistent with other literature and observations. Here’s an extract from this paper which is very relevant to Pakistan. The key message here is that Technology without decent education levels is not much helpful.

In order to foster the adoption on ICT services a simple requirement is the creation of manpower to use and covey the benefits associated with connectivity. Research in “Social networks” is used to convey the importance of being connected. The elementary examples of social networks we come across in daily life are for example, group of friends, NGOs, associations, societies, and the government. Common to all is that they communicate verbally but within themselves or within their small network and rarely with other social groups. Some of the reasons that contribute to this weak link are the overall objectives, information flow, education, and availability of physical infrastructure.

If technology is introduced, one can observe the differences in the organization and communication of these societies which were once connected verbally. The first and the foremost question would be whether technology can help them to learn, communicate, and share knowledge. There are certain rules and requirements such as: education, knowledge of how to use it, and the purpose of its usage. With the use of technology, the communication has improved but only within a society.

India and China are rivals in IT and IT-related services. China is ahead in terms of proliferation of internet services. China is known for being the production house of the world, while India is recognized for its service industry, i.e., Information Technology Enabled Services (ITES). In China, it is the availability of a well-developed and disciplined physical infrastructure which contributes to the growth; In India, it is the availability of millions of low-cost English-speaking professionals.

The prime factor that contributes to the adoption of technology is education. To put things in perspective, India’s biggest advantage is the availability of skilled labor and qualified engineers. But availability of such a work force is a problem. Illiteracy rates in India exceed 35%, while only 4.9% in China.

Reference: Tanguturi, Venkata Praveen and Harmantzis, Fotios, “ICT Infrastructure in Two Asian Giants: A Comparative Analysis of China and India” (January 10, 2008). Available at SSRN: http://ssrn.com/abstract=1085928

Came across this article on Computer World about the rise in popularity of books on cell phones in Japan. Given the long commute times one can relate to it. As the article explains these books are mostly for entertainment … we are not talking classical literature here.

I have seen some efforts which have taken this idea further and applied cell phones to promote literacy efforts in developing countries.  If this sound far-fetched just consider the Blackberry craze. Till recently I did not think that reading heavy volumes of email on a phone is feasible but after using Blackberry for a while I have been convinced otherwise.

I am looking for a few good studies on whether mobile phones in low literacy countries to boost interest in reading. If you know any person or community which used cell phone to increase its literacy level, please share with readers.

The root cause for the cut sea cables which resulted disruption of Internet in Middle East and South Asia – but not Pakistan - has been a hot discussion item. We covered the previous major disruption due to natural disaster here. I have also seen the press releases about the new submarine cable – India-Middle East-Western Europe (I-ME-WE) – from a consortium of nine operators including PTCL which is supposedly investing 50M$. Got many emails on the topic and wanted to share one where Umar Kalim’s note is mentioned by Slashdot.

Analysts have been studying the effects of the fibre outage throughout the Mediterranean in terms of network performance, by examining the changes in packet losses, latencies and throughput. We initially discussed the outage yesterday. ‘It is interesting that some countries such as Pakistan were mainly unaffected, despite the impact on neighboring countries such as India. This contrasts dramatically to the situation in June – July 2005, when due to a fibre cut of SEAMEWE3 off Karachi, Pakistan lost all terrestrial Internet connectivity which resulted, in many cases, in a complete 12 day outage of services. This is a tribute to the increased redundancy of international fibre connectivity installed for Pakistan in the last few years.

Here’s a good summary of the issue – from WSJ:

A ship’s anchor lying at the bottom of the sea was behind one of the two cuts last week in undersea Internet cables around the Middle East that caused dramatic outages across the region, the cable-owner company said Friday.

FLAG Telecom said its repair ship managed to recover one end of the cut Falcon cable in the Persian Gulf, 35 miles north of Dubai, between the Emirates and Oman.

At the site, the FLAG crew discovered an abandoned ship’s anchor which the company said was behind the cut last Friday. The anchor, weighing over 5.5 tons, was pulled up to the surface. The FLAG repair ship is now trying to reconnect the cable. The repairs are expected to be done by Sunday despite rough weather conditions, FLAG said.

Meanwhile, a second ship was continuing repair work off the north coast of Egypt, where the first undersea cable was cut Jan. 30, near the Egyptian port city of Alexandria.

That cuts involved two cables — the FLAG Europe-Asia cable, owned by FLAG, which stands for Fiber-Optic Link Around the Globe, and another cable lying next to it, identified as SEA-ME-WE 4, or South East Asia-Middle East-West Europe 4 cable, owned by a consortium of 16 international telecommunication companies.

It wasn’t yet clear what had caused the other cut, on a very narrow route linking Egypt and Palermo, on the Italian island of Sicily. Egypt’s telecommunication ministry has said no ships were registered near the location when the cut occurred north of Alexandria. The repairs off Egypt are also expected to be completed by Sunday, FLAG said.

The two unusual cuts — within two days of one another and involving three Internet cables — led to disruptions in services, slowed down businesses and hampered personal Internet usage. FLAG said it has fully restored circuits to some customers and switched others to alternative routes.