Is Pakistan Ready For 3G?
Does it make business sense to introduce 3G in Pakistan at this time? PTA has been deliberating on this question for a while. Recently PTA asked major technology stakeholders (equipment makers, mobile companies) to share their view points on 3G licensing and roll-out. The presentations have been posted at the PTA website. Telenor CEO has talked to press about his views on 3G, covered here. Take a look at few points from a presentation by another one of the major mobile company. The argument presented is that conditions are not suitable for 3G in Pakistan and the data revenue potential does not justify investments needed for 3G. They recommend to either defer spectrum allotment or give partial spectrum at nominal cost. Can you guess which mobile operator is this?
3G Situation in Pakistan
- Pakistan is a low priced voice dominated market. Industry is building voice capacity rather than enhanced capability
- Pakistan Mobile Data Subscriptions Disappointing
- Nominal GPRS subscriptions in the industry
- ARPU uplift from these subscriptions is negligible
- Multi-mode (GSM/UMTS) handsets are still costly
- GSM market exploded due to economies of scale in the hand sets
- GSM hand set is available as low as $25
- Small percentage of 3G capable hand sets in the market
- 3G non-voice mobile revenues are expected to be negligible
- Localized content stimulates usage — Low literacy in Pakistan
- No content available in local/regional languages
Spectrum Cost
- Spectrum forms part of investment for an operator to roll out a 3G network
- Five operators can be expected to invest over a billion dollars on initial launch
- More cell sites would required to support higher data rates
- Local content development is an uphill task
Option 1
Defer the allotment of spectrum for another 1-2 years (as per our recommendation May 2007)Option 2
Award 5Mhz of 3G spectrum to all MNOs at nominal cost (similar to WiMax spectrum fee )
Why?
- Incentive to build and grow 3G services
- Justify high capex on roll outs
- Technology proliferation
- Affordable 3G services for masses
- Allocation of additional 3G spectrum at a subsequent date
- Operators keen to expand on 3G portfolio can bid
- Market foundation is laid
- Business case for further investments
- Strengthen operator capability to offer better QoS and advanced services
TelecomPk.Net is a leading source of information and analysis about Pakistan Telecom industry.
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