State of Telecom Industry in Pakistan

According to recent surveys, the trend of using smartphones to replace laptop functions is growing. 52% of respondents to the In-Stat survey said they could envision using a smart phone in the future as their sole computing device, provided handset companies make improvements like better keyboards, expandable screens and applications that work as well as they do on PCs. And it’s clear that a sizable number of users already are starting to see their smart phone as a replacement for their laptop for at least some of their needs. Still, the number of people ditching their laptops completely in favor of smart phones is small. The survey included Individuals, road warriors, sales force and other business users.

More from this article in Wall Street Journal.

Many travelers are now using smart phones the way they once used laptops — and laptops the way they once used desktop computers. Mobile workers rely on their laptops to create PowerPoint presentations and do other heavy-duty computing. But then they leave the laptops in their offices, homes or hotel rooms and take their smart phones out into the world — to client meetings, say, or factory visits.

In some cases, road warriors are going even further, ditching their laptops entirely and doing all their mobile work from smart phones. And many travelers say they’d be willing to take the same step as technology improves — which it’s been doing by leaps and bounds lately.

The credit for the change in attitude lies, in many respects, in the iPhone’s combination of cutting-edge hardware and software, which is based on Apple’s Mac operating system. Reviewers have praised the device’s Web browser, which lets users zoom in on text with simple finger strokes. And there’s a huge library of iPhone software on Apple’s App Store, from games to physicians’ reference guides.

Adobe has been working for years to make Flash as ubiquitous as possible. It is standard on the web (Microsoft’s Silverlight is its new competitor) but not on other devices. For example, Adobe is still trying to make Flash work to Apple’s satisfaction so that iPhone users can view Flash on their handsets. Now it has been announced that Adobe’s Flash Player 10 and AIR (a platform for building complex Web applications) will be compatible and optimized for the ARM chips available in 2009. These chips are also used in set-top boxes, mobile Internet devices, personal media players, and automotive platforms. Via Technology Review.

Read more »

Judging from the news it seems that many people do not take care of the sensitive content on their phone. This is true even when people recycle their phone. With smart phones rising in popularity, this poses a security headache for companies. Lost/stolen/sold phones can have proprietary company information which is often not encrypted. But what about phones which people sell to others, say on eBay? Surprisingly, the data on many of the phones has not been erased properly. Any data left on the phone can be used by hackers and criminals. Many times this seems to be a problem of not knowing how to get rid of the information. Recently Environmental Protection Agency (EPA) in US released new guidelines for annihilating all data on mobile devices. Here’s a site which provides instructions for erasing data. Recycle with care!

In this related article, Businessweek reports:

The sales director of a large Japanese company thought he was doing a good deed when he donated his BlackBerry for recycling. But later a group of British and Australian researchers discovered the device and found it still contained sensitive data, including bank account numbers, a business plan for his organization, and the identity of his main customers.

Indeed, a September 2008 survey of 160 mobiles by the researchers—a team from British Telecom, Wales’ University of Glamorgan, and Australia’s Edith Cowan University—found that one in five mobile communications devices still held sensitive information. BlackBerrys contained the most, with 43% of those examined harboring data that could be considered a threat to the individual or the organization.

PTA has published the 2007-08  annual report (download from Wiki) which has useful information and statistics about the performance of the telecom sector and the regulatory activities. Here are some previews from the report. The telecommunication sector continues to be a major source of income and foreign investment for Pakistan.

Foreign direct investment (FDI) was US$ 3.1 billion, a fall of 21% from previous year. On the positive side, there was a 33% drop in import bill of mobile handsets (US$ 446 Million), partially due to the imposed tax of Rs. 500 per handset and 50% regulatory duty. The FDI and the handset import numbers reflect the tough business and economic conditions in Pakistan.

This is the first report which has been published by the new chairman, Dr. M. Yaseen and the restructured PTA. The report has seven chapters which proivde progress report on regulation, cellular, LDI, WLL, local loop, broadband and there is a chapter for AJK and Northern Areas. Many thanks to PTA for this useful and detailed report.

In an earlier post I presented some stats about the growth of mobile Internet based on the advertisements viewed from mobile phones in Pakistan. Additional data from last few months confirms that mobile web and mobile advertising audience in Pakistan are maturing and growing. This is impressive, given the difficult economic conditions and high taxation policies in Pakistan.

The analytics data from mKhoj, a mobile advertising company, shows that the number of impressions (views of advertisement) from Pakistan took an 80% jump in September and in the previous month, the impressions showed 300% growth. Pakistanis have always been big time fans of mobile games, ring tones and other fun downloads, a trend consistent with the mobile users worldwide. Now the public is moving from WAP suites to surfing the web and portals on mobiles. The unlimited data plans and EDGE service are contributors to this trend.

As I wrote a while ago, as long as the marketers follow an ethics guideline and provide relevant ads, the mobile advertising will take off and become mainstream.

Here is a summary of the trends which point to growth of mobile advertising:

• 91 million user base
• Near 100,000 mobile data users (estimate)
• Good EDGE services (in terms of options and coverage) by mobile operators
• More wireless broadband services – such as Zong USB Internet
• Growth of smart phones as a percentage of overall handsets
• Preference to browse web on the phone
• Acceptance of mobile ads – as shown by ad impressions
• Emergence of local mobile ad players such as mKhoj

Here’s a look at what China Mobile has been working on and sharing with its investor community. Who knows, some of these products could be offered through Zong in Pakistan as well. Regarding music, Zong has music channel and sms song search services but not as extensive as the one shown below. Mobile news delivery through MMS (Mobile Paper) is another interesting service.

There’s more stuff. Gaming, payments and location based services are also part of plan for China Mobile. Just what you should expect from the largest mobile operator in the world.

Source: China Mobile financial results presentation, first half 2008.

According to PTA numbers, Pakistan had just over 170,000 broadband internet subscribers at the end of July 2008, up from 65,000 in March 2007. This number excludes mobile internet users on EDGE or GPRS. Digital subscriber line (DSL) and hybrid fibre coax (HFC) remain the most popular broadband technologies, as shown below. It is estimated that there were 2800 FTTH (fiber to the home) and 20,000 WiMAX users at the end of July 2008. 

A clear digital divide has existed within Pakistan as coverage and provisioning has been mainly limited to large urban areas. Karachi, Lahore and Islamabad are the best served cities. Since 2007 PTCL adopted aggressive strategy for DSL growth and by 2008 PTCL expanded its broadband DSL services to about 130 cities. However, Pakistan’s fixed-line infrastructure is still quite limited. A Ministry of Technology (MOITT) report on broadband estimates that all existing copper can support hardly 500,000 broadband users over a period of 3-5 years.

Universal Services Fund (USF), which subsidizes broadband in under-served areas, has been working diligently on a number of initiatives. The hope is that USF subsidy for broadband will help to close the digital divide. Read more about USF work here.

Then there is Mobilink’s Orascom’s LinkDotNet broadband service, at competitive rates (for instance, Rs.1200 for 512 kbps, unlimited download). Although limited in coverage, these are positive developments. I am pleased that the prices have dropped to affordable levels. There are student discounts available as well.

Another significant trend is that wireless broadband services have expanded significantly in the last 12 months.

WiMAX is expected to account for a growing number of broadband connections in the future. In the first 4 months of the launch, Wateen signed up nearly 10,000 customers. However due to initial issues with billing etc, there was considerable churn reported. Mobilink started the second commercial launch of WiMAX in Karachi by the name MobilinkInfinity. It has been estimated that about a 1000 customers have been signing up for this service per month.

Current estimates are that there are around 50,000 broadband wireless users in Pakistan. Wordcall Evdo service, Zong’s EDGE through USB modem and similar services by other mobile network operators provide further choices, though these are a bit pricey for average Pakistani consumer. Wireless mobile broadband is poised to be the next hot area of growth. If and when 3G arrives, it will be another boost to the wireless broadband sector.

Updated 11/28/08: Tee Emm commented below about the informal local area networks relying on cheap optical fiber cables passed over utility poles with or without permissions (typically on the basis of ’street power’). It is estimated that these so-called ‘desi networks’ are serving around 100,000 households all over Pakistan. This is an important part of Pakistan’s broadband sector which has been overlooked.

Projections for growth
The MOITT report includes an optimistic forecast based on the USF subsidy for fixed and wireless broadband. According to this forecast, in 2008-2009 the fixed broadband users will grow to 250,000 and wireless broadband will be 150,000. This excludes commercial LANs and WANs. I believe that the actual numbers will be within 20% of these estimates. We will know when PTA releases the information in 2009.

The twitter timeline (click to enlarge).

Source: Technology Review.

Nokia started off with their sales in Pakistan way back in 1998-99. The only models available at that time were analog and the Nokia 282 was one of Nokia’s first mobile phone to enter Pakistani markets. Nokia’s real hit in Pakistan was the Nokia 3310 and it established the Nokia brand in the market and gave Nokia a large market share. Soon after this hit, there was a rush of different mobile brands such as Sony Ericsson, LG and Samsung. These brands came with competitive pricing and penetrated the markets. But Nokia on other hand had the customer preference more then the new brands and held a stable position in the market. The handsets manufactured by Nokia are much more favored in the market because of the compatibility and robustness. Nokia’s quality control and over all reputation makes it the top choice for customers choice in Pakistan and other Asian countries.

Nokia is known for understanding their markets all over the world. The customer preferences for Nokia varies from place to place all around Pakistan. Nokia has introduced a variety of models to capture all market segments. The prices range from Rs. 2,500 to over 50,000. While conducting a survey of Lahore to measure Nokia market share and customer satisfaction, I observed that the demographics of the area play an important role. for e.g in DHA (Defense) people prefer quality and brand reputation matters, whereas price is not a major factor for such customers. On the contrast if we take areas like inner city for instance the demographics and preferences for phones totally changes. The majority of customers are attracted to the lower prices rather than anything else.

In my opinion, the pricing strategy of Nokia can be improved. Lets look deeper into the classifications of the models. Although prices have appreciated a lot because of the devaluing rupee value. Some handsets like Nokia 6120 have the SymbianS60 operating system, N series and E series also have the same. The 2 mega pixel camera in N80 and E51 does not provide the quality of that in 6120 although the prices of both are higher then that of 6120. While selecting a handset some people have different ideas as I mentioned earlier, but still people somehow correlate the quality and the function of the phone to its price. Before buying a handset we should focus on our needs and the functionality it offers. That is why Nokia has come up with tools for comparing handsets on their website.

Popular Nokia phones in Pakistan

Nearly every GSM Nokia model is available in the market. Now a days the customers are demanding more and more compatibility in the user interface of the handset, no matter Nokia has got the most friendly user interface. Nokia has also very clearly done the market research for Pakistan as people go for cheap and still want the best possible. I have used nearly every handset Nokia ever introduced in Pakistani market. The hits and flops section of this post is written with the point of view of general popularity among the public but of course it is a subjective listing. The mobile prices listed below are based on United Mobile are in Pk Rupees and of course, subject to change.

The Top Ten Hits :

• 1110 (simple phone, nice battery time) – Market price 2800-3200
• 2630 (sleek, simple and stylish,1.3 Mp cam) – Market price 8500-9000
• 5310 (music series most popular because of its high quality TFT screen and sleek design although battery time is not that impressive) – Market price 16,900
• 6120c (the most commendable phone present in the market, there are many many reasons for buying this handset, camera quality, video quality is better then any other phone in its competition,the TFT display, video call, USB port, music quality is good, battery time rocks!) – Market price 18,900
• 6500 (slide)(favorite among public because of its looks, stainless steel with brush proofing on the screen as well, 3.2 MP camera with Carl ziess lens, too expensive for its range) – Market price 26,500
• N70 (first phone N series launched, customers made it a hit in starting few months, it has got a new look and a flash of tomorrow) – Market price 13,000 (out of stock these days)
• N82 (camera 5 mega pixel, 3G enabled, WLAN Wi-Fi 802.11 b/g, UPnP technology) - Market price 37,000
• N95 8Gigs(software mobility, camera5 mega pixel, TFT, 16M colors 240 x 320 pixels, 2.8 inches) – Market price 48,000
• E51 (business class phone, Symbian s60, 3G HSDPA, 3.6 Mbps, WLAN Wi-Fi 802.11g, VoIP over WLAN) – Market price 23,000
• E65 (GPRS Class 10 (4+1/3+2 slots), 32 – 48 kbps, HSCSD, EDGE Class 10, 236.8 kbps 3G 384 kbps, WLAN Wi-Fi 802.11b/g, VoIP over WLAN) – Market price 26,500

The Flops:

1650 (teasing keypad), 3110c (looks and extra large keypad), 5610(wear and tear), 7900 (prism), N76, N73 (Software hangs very often),6300(battery timing) N78 (handset with the size of a brick and keypad that has got its own explanation), N81 (the sliding gear collapses after 500 hours, the company has got no explanation for that, the keys for accepting and rejecting the calls are too far off the keypad).

PTCL has started an incentive program where it gives cash to its employees based on the number of phone and broadband installations per month. The amount is divided among CPE installers, line men, technicians etc. What is this monetary incentive? For the installation of 41 to 80 connections per month per CPE Installer, a line man gets Rs. 75. Over 80 connections will give the line man Rs. 125. To me, this does not sound much of an incentive. If PTCL has agreed in principle that an incentive is needed to motivate its employees then it might as well make it a reasonable one.

More importantly though I think this kind of incentive misses the point. Providing as many connections as possible is just one metric which works well for shareholders and executives. I believe that there is another criterion which is more important: is the service working correctly and is the billing correct? This should be the part of the score card for the employees and PTCL which determines their incentive. There’s no point in installing a service for which there are lingering issues and the customers are not satisfied. What do you think?

Here’s the justification for this, taken from PTCL web site.

In order to have sustainable business performance in the highly competitive environment of the Telecom industry, PTCL has to deliver highest quality services to its customers. Quick provisioning of PTCL services brings lot of value to the customers which not only guarantees more revenues but creates goodwill for the company.

In the backdrop of this situation, PTCL management is taking key initiatives in different business areas. One important move aimed at improving the Sales and Customer satisfaction is to boost the morale and motivation level of our employees.

An Incentive Plan has been worked out to present substantial cash rewards to the employees performing beyond the specified benchmarks. This will be the start of an era where the rewards shall be linked with the performance and achievement of targets.

As part of our emerging technology series, this post reviews Femtocells technology, which is expected to join the mainstream in coming years. Femtocells, which improve cell phone coverage, are low-power wireless access points (small devices) that operate in licensed spectrum to connect standard mobile devices to a mobile operator’s network using residential DSL or cable broadband connections.

Femtocells are a cheaper way to improve coverage for the operators and provides another way to offer the elusive fixed-mobile convergence. Why build expensive towers when cheaper devices can be used at consumer homes? For network operators, this allows to shifts the investment to a wider market and could be helpful when considering large investments such as 3G.

These devices need power and that is a challenge in developing telecom markets (such as Pakistan) with unreliable power supply.

A BusinessWeek report describes how the US carriers are planning to introduce the service:

The carriers will ask consumers to pay about $100 for a device slightly smaller than a toaster. The tiny tower will connect with up to five cell phones in the home and carry calls through a broadband Net connection to the telephone network. Subscribers will likely pay ongoing monthly fees for the “enhanced service” as well.

It’s easy to understand why wireless operators like femtocells. The technology lets them shift some of the burden of adding wireless capacity to their customers. Carriers pay for traditional cell-phone towers themselves, of course, and the costs can hit $500,000 per tower.

Carriers are working on ways for the technology to make financial sense for consumers, too. Their most compelling offer may be to make the service cheap enough and reliable enough that it can replace traditional landlines.

Femto Forum provides further information:

Using femtocells solves these problems with a device that employs power and backhaul via the user’s existing resources. It also enables capacity equivalent to a full 3G network sector at very low transmit powers, dramatically increasing battery life of existing phones, without needing to introduce WiFi enabled handsets.

A recent study from ABI Research forecasts that by 2011 there will be 102 million users of femtocell products on 32 million access points worldwide.

It used to be that most homes with a land line phone had a thick phone directory, often used as a place mat for the phone set. That was before there were tens of millions of mobile phones with address book capabilities. Still there are times when one needs to get a phone number or address for someone. With the growth of online information, it has become easy to search and find phone numbers and addresses online.

How do you look up name or address for fixed line phone numbers in Pakistan ? PTCL provides this service on their website here. You can search using name or address. I found that entering address is not easy because addresses are not standardized in Pakistan. Entering the full name is easier but you may get multiple results. There is a user guide available as well.

If you want to find name and address for a given phone number, you can also use the widget in the sidebar of this blog. It is powered by the Brain net. Enter the 7-digit phone number without the NWD code .. for instance, do not type 042 for Lahore.