State of Telecom Industry in Pakistan

Warid has recently announced 2 location based services: friend finder and place finder (i.e. local search). These are pay-per-use services (Rs.3+tax). Using SMS or MMS. you can find the location of another warid cell phone customer or do a local search for a point of interest such as bank. Service is limited to major cities.

This is an interesting first step towards location based services (LBS) for the telecom industry. In US and EU, navigation and related data services are growing rapidly and account for a major portion of network operator’s revenue. The rules and privacy norms are quite different in developed countries and sharing of real-time location is subject to a lot of scrutiny. Warid is simply relying on per-request permission to work around the privacy concern. However I do not find this a good approach — it can be quite annoying to get such messages left and right.

In the US, LBS is a hot area with lots of startup acitivty. Companies such as brightkite, loopt and whrrl have received tons of VC money to develop all kinds of fancy mobile and web-based applications. Recent inclusion of GPS in 3G iPhone has created even more buzz!

Warid has taken a different and relatively simple approach where the application is based on back and forth sms or multimedia message (MMS). The SMS solution is pretty much the same which Google offers in the US and which works extremely well for quick searches. The MMS option is for the map display - limited to a few major cities. Since there is no mention of GPS requirement, Warid must be using triangulation algorithms to find the approximate location. See my previous post on Google maps and how it works.

Although there are many limitations of Warid’s LBS this still matters because this is the first attempt for location based service. I can assure you that this is just the start and we will soon plenty of other implementations around the buddy finder concept and LBS in general. There are so many creative ways to use this service, especially when combined with a personalized website and higher resolution maps.

Google’s model is to build a killer app, then monetize it later – Andy Rubin, Director Of Android.

I would like to present two recent stories about the challenges faced by Google’s Android platform. As I wrote previously, the mobile OS platform war is one of the most important and pivotal for mobile industry and consumers. It reminds me of the browser wars of a few years ago. For Android, there are a few technical challenges but the real critical issues are related to business.

There is competition from Nokia, Apple, BlackBerry and Microsoft. The questions still remains on how applications will be distributed and how developers will earn revenue from them. Then there is the tension over who controls the phone features (Google or manufacturers like Samsung). My conclusion is that despite these initial problems, Android has all the potential to become a breakthrough success.

A few excerpts from this month’s Wired Magazine: Google’s Open Source Android OS Will Free the Wireless Web

The only firm that seemed to be successfully navigating the mobile labyrinth was Microsoft, one of Google’s biggest rivals. The Windows Mobile platform had less than 10 percent of the US smartphone market, but it was growing fast. Microsoft’s system, however, was the ugly stepsister of what Google was proposing: Redmond executives cared less about opening up the Net to mobile users than about tying the mobile operating system into its desktop dominance. A decade ago, Microsoft had underestimated the growth of the Web and then lost control of it to Google. Now it looked like it was Google’s turn to be caught flat-footed.

Windows Mobile is now installed on 140 devices, hosted by 160 carriers around the world. Key to its success was Microsoft’s ability to use its desktop domination as a battering ram.

The Android team had violated an essential tenet of the wireless industry: that users are too dumb and dangerous to be trusted with downloadable software. Engineers who write for just about any mobile operating system today have to spend time and cash obtaining security keys and code-signing certificates. Android would allow any application to be installed and run, no questions asked.

“The handset makers are on a treadmill, trying to turn out hardware every six months that’s innovative and thinner, with bigger displays and lower costs, while having to do the systems integration,” says Andy Rubin, director of mobile platforms at Google. “The net result is no innovation. They don’t have time. You know what? We make really good software. We can take on all that work.”

The second story is from Wall Street Journal (extracts below) and it describes the difficulties and the resulting delay in launch: Google’s Mobile-Handset Plans Are Slowed

Google now says that the handsets won’t arrive until the fourth quarter. And some cellular carriers and makers of programs that work with Android are struggling to meet that schedule, people familiar with the situation say.

T-Mobile USA expects to deliver an Android-powered phone in the fourth period. China Mobile, the largest wireless carrier in the world with nearly 400 million subscriber accounts, had planned to launch an Android phone in the third quarter but it has run into issues that will likely delay the launch until late this year or early 2009, a person familiar with the matter says.

Read more »

Dual-band, dual-SIM on the same phone? This Coolpad looks like a really cool phone for travelers and for people who love to swap out SIMs often. Lets see if it delivers as promised. As reported at CNET:

For the frequent travelers, remaining contactable via mobile is serious business. Should you use roaming to remain in contact but pay exorbitant fees just to call a local number? Or switch your SIM card to a local account and risk missing important calls? Most compromise by having two phones, which frankly, is no solution at all.

Coolpad phones claim to be the first in the market with dual-SIM devices that not only work with more than one network, but can even switch between GSM and CDMA accounts without batting an eye. Currently retailing in Indonesia, China and Africa, handsets range from US$100 to US$350, with premium models going for as high as US$1,000. Granted the only drawback we’ve seen so far is the lack of 3.5G connectivity, but Coolpad phones will save you a bundle in roaming fees.

Just as we talked about in the morning the new iPhone is 3G and GPS enabled. Best of all its only $199 for the 8GB version. There’s a wait of 1 month though. A lot of new features, mainly to address the complaints from corporate users. With plans to launch in 70 countries in the next few months I am sure hope Pakistan will get an official carrier too. Is it going to be Mobilink or Telenor? Your guess is as good as mine.

Read the full story via Engadget.

Today at the Apple Worldwide Developers Conference, Jobs is expected to make the highly anticipated and eagerly awaited announcement about the next generation iPhone. Interestingly till the first iPhone launch, most of the mobile phone and application innovation used to be outside of US (in Asia and Europe). Now that Apple has taken the center stage the expectations are high for the second launch. Developers and bloggers have been writing about the presumptive new 3G iPhone with GPS and whether Apple can dazzle the world one more time. And there are rumors that price will be lower than before.

Based on information from various sources I am quite sure that Location Based Applications will be a primary attraction on the new iPhone.

As the world’s largest market, there has been a huge interset by the whole world in China’s 3G plans. Finally there is official word on China’s 3G roll out. At TelecomPk.net we have been wondering about 3G in Pakistan for some time and it is interesting to learn from the Chinese 3G roll out. For one the Chinese telecom has been shrouded in mystery for years. Now restructuring plans have been announced which will cause many ripples in the Chinese industry and will have implications for global telecom industry.

We share two perspectives here. One from WSJ story Long-Awaited Plan Feeds Competition, Fuels Wireless Revamp and another from blogger Brough Turner China’s 3G license delay is a smoke screen. Brough who has travelled to China frequently, says that 3G licenses are a formality and 3G is happening in China without licenses. Brough believes that “As more and better TD-SCDMA handsets get deployed, we should see some really interesting innovation coming out of China — innovation that will be applicable to any 3G technology, anywhere in the world.”

Some excerpts from the news story:

After the restructuring, the statement said, the government will issue licenses for advanced, “third-generation,” wireless services that enable high-speed functions such as video downloads. China is one of the last major telecommunications markets to adopt such 3G technology. Global telecom-equipment providers such as Telefon AB L.M. Ericsson, Alcatel-Lucent SA, and Huawei Technologies Co. have been waiting years for China to begin building 3G networks.

The new structure has been determined entirely by the government, which owns all of their parent companies, without any say from outside shareholders. While Saturday’s statement said the government only “encouraged” companies to follow the plan, it is clear that companies have begun to implement it.

China Mobile Communications Corp., parent of China Mobile, will take over China Tietong Telecommunications Corp., the smallest of three fixed-line operators. China Mobile stock is down for now though it has been turbulent this year.

Questions remain about how the industry changes will play out — not least about how various 3G technologies will be deployed. Industry executives and analysts expect each of the three new carriers to use a different type of 3G technology, including two international standards and one that was developed in China.

The government has been especially eager to promote the domestic 3G standard, called TD-SCDMA, as part of a broader push to help wean China off higher-cost foreign technologies. TD-SCDMA has undergone the widest testing in China. But some analysts have said problems with the technology — which hasn’t been used outside China — have caused the government to delay the rollout of commercial 3G services.

Saturday’s statement alluded to the importance placed on TD-SCDMA, saying one of the industry restructuring’s main goals is to foster “indigenous innovation.”

It remains unclear how the other two 3G technologies, WCDMA and CDMA2000, will be employed — a question for foreign companies that stand to earn more from their use. China Mobile, the strongest financially of existing operators, has been handling the bulk of the TD-SCDMA tests, and is expected to keep using the technology as licenses for commercial service are issued.

Continuing on the series of posts from TeleCON 2008, this one is on Profitability Challenges in a Low ARPU market. This presentation was made by Sajjad Hussain, Director Networks of Ericsson. It has some material which students and researchers will find particularly useful.

Naturally the presentation is tilted towards networks, transmission efficiencies, 3G and NGN. But most importantly it talks about the energy consumption and ways to address the energy demand by considering Green Sites which utilize alternative energy sources such as solar power and battery backup. There are a few slides on mobile commerce as well. Here is the full presentation in pdf. 

Related Posts:

• Challenges Of High Growth Mobile Telecom-Markets
• Will Average Revenues Per User In Pakistan Rise?

The last post about 3G in Pakistan had Mobilink’s presentation. Now lets take a look at the views of equipment makers like Huawei, ZTE and Ericsson. Obviously all of them were optimistic about 3G and they talked about the benefits and the smooth transition to 3G  they can provide.

ZTE had a very well thought out set of slides. Here is how it was organized.

• WCDMA Worldwide Deployment
• WCDMA in Emerging Markets
• Advantages of WCDMA for Pakistan
• Economical 2G/3G Construction Solution

There was agreement that the key issue for WCDMA is handset pricing and infrastrucutre investment.

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?

1. Incentive to build and grow 3G services
2. Justify high capex on roll outs
3. Technology proliferation
4. Affordable 3G services for masses
5. Allocation of additional 3G spectrum at a subsequent date
6. Operators keen to expand on 3G portfolio can bid
7. Market foundation is laid
8. Business case for further investments
9. Strengthen operator capability to offer better QoS and advanced services

CTIA Wireless 2008 is one of the largest wireless events in the US. Among its various programs is the Emerging Technology Awards which claims to highlight the most innovative products and applications representing all facets of the mobile lifestyle in wireless”. It is a good place to see some promising gadgets, applications and products.

Take a look at this report. Do you think these were truly worthy of awards?

Mobile CE - Phone/Smartphone
1st place - Instinct by Samsung, exclusively from Sprint
2nd place - Nokia N96
3rd place - Samsung ACE (SPH-i325)

Consumer Applications - Messaging (SMS/MMS)/Mobile Marketing
1st place - Cellfire 3.0
2nd place - Reply with Jott for BlackBerry
3rd place - SnapNow Mobile Visual Search

Consumer Applications - Mobile Entertainment/Social Networking
1st place - Ontela’s PicDeckâ„¢
2nd place - WidSets
3rd place - Yahoo! Go 3.0

Mobile Widgets - Consumer
1st place - Zumobi
2nd place - Fusion Voicemail Plus by PhoneFusion
3rd place - JACKED Mobile SportsTop

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

Ministry of IT and Telecom has been working on the broadband woes in Pakistan. MoITT published a study on this topic which is available here. This summary of broadband situation in Pakistan discusses the issues and suggested a few approaches to resolve the problem. MoITT has been soliciting comments from public and industry  — the question posed is: Is Entire Pakistan Underserved in Broadband Penetration? Yes Of Course! Rest are details but the simple answer is Yes.

On Feb 8 a discussion took place at Islamabad Club where the Minister of IT and other stake holders participated. This conference in Islamabad was continuation of the “Fix Broadband” theme. When talking about broadband problems, comparison and references to the steep increase in teledensity in last 5 years are often made. Tariq Mustafa, one of the industry veterans and blogger, shares some interesting thoughts at Telecom Grid Pakistan. Tariq points out that even if wireless broadband is the ultimate winner in context of Pakistan and other emerging economies, there is still a large wired infrastructure required to support it. Another avenue which has been pushed is the utilization of Universla Services Funds for broadband.

Another interesting angle of  supply vs demand is raised by Tariq Mustafa. He asks:
“do we have compelling applications that will drive the growth riding this gap?”

This question is important if you talk about real broadband. But here we are talking about 256K speeds so I still feel that if the prices are reasonable the new generation will be quick to take the bandwidth and given the demographics that can be significant.

Ok if you still want to get into the supply and demand - here are 2 applications: telecommuting and offshore work.

Readers - let us know how much you would be willing to pay for broadband and what applications or usage scenario will justify that expense?