State of Telecom Industry in Pakistan

Over the years I have presented different views and ideas on how to improve the very low number of broadband users in Pakistan (here and here). Here’s another view by Dr Amir Mateen (Cisco) from TeleCON 2008. His presentation looks at the problem in a different way and provides some brutal, honest analysis such as “Not digital divide, just the old divide carried over into the digital world”. His recommendation: Redefine success criteria for broadband in Pakistan.

• “productive usage” vs “# of connections”
• results vs usage of broadband internet (catch the mobility wave)
• Urdu on the web (in normal Urdu script)

Tee Emm attended the event and shared some great commentary on Dr. Mateeen’s presentation which is worth repeating here:

Some presentations were really good and thought provoking like the one given by Dr Amir Mateen of Cisco Systems Pakistan where he talked about how great the broadband vacuum is in Pakistan and how unprepared the local contents are and that in the absence of structured local contents, people will make up their own contents (read social networks) and in doing so, there is a real danger of a whole new generation getting carried away in the roman Urdu flood and how this threatens the Urdu script and the associated heritage.

I share the same concerns about how we are treating Urdu language in Internet and telecommunication age. This is something which needs to be discussed in more detail.

Over the past 2 years, TelecomPk.Net has offered many reviews and commentary about PTCL. This post gives a summary of the stories written about PTCL with a time line view. A quick look shows that the telecom consumers of Pakistan have been engaged in various forms of struggle with the privatised face of PTCL. The way PTCL handled the most recent rate increase of local calls (from 0.4 Rs per minute to 1 Rs per min) is indicative of its attitude towards consumers. I wish that I could PTCL the benefit of doubt but its too late for that.

Perhaps it is time to re-write the PTCL mission statement to omit customer satisfaction.

To be the leading Information and Communication Technology Service Provider in the region by achieving customer satisfaction and maximizing shareholders’ value.

In case you missed the past stroies, here is a list of the highlights. (All PTCL posts can be found here)

2006 - Broadband Tarrifs: PTA vs PTCL in court
- Battle of Bandwidth Tarrifs
- Ptcl vs PTA

2007 - ISPs vs PTCL, Profit Falls, Service Issues, Lower DSL Rates, Pakistan Package Forced On Consumers
* Pakistan ISPs Against Ptcl
* PTCL Net down by 25%
* Performance Review
* Lower Broadband Rates from Ptcl
* Service Issues Continue
* Pakistan Package Controversy

2008 - PTA reprimands PTCL, Local call rates changed quietly, Pakistan package modified
+ PTA issues directive against PTCL after public uproar
+ Ptcl Packages rips off consumers

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

Citizens of Pakistan have been a victim of Internet censorship many times in recent past. The last attempt by PTCL to block YouTube resulted in side effects for the whole cyberspace. Here’s a review of Access Denied a recent book on this topic. Review is by Bruce Schneier . The book is edited by Ronald Deibert, John Palfrey, Rafal Rohozinski and Jonathan Zittrain. Thanks to Shahzad Ahmad for sharing this at Pakistan ICT Policy discussion group.

In 1993, Internet pioneer John Gilmore said “the net interprets censorship as damage and routes around it”, and we believed him. In 1996, cyberlibertarian John Perry Barlow issued his ‘Declaration of the Independence of Cyberspace’ at the World Economic Forum at Davos, Switzerland, and online. He told governments: “You have no moral right to rule us, nor do you possess any methods of enforcement that we have true reason to fear.”

At the time, many shared Barlow’s sentiments. The Internet empowered people. It gave them access to information and couldn’t be stopped, blocked or filtered. Give someone access to the Internet, and they have access to everything. Governments that relied on censorship to control their citizens were doomed.

Today, things are very different. Internet censorship is flourishing. Organizations selectively block employees’ access to the Internet. At least 26 countries - mainly in the Middle East, North Africa, Asia, the Pacific and the former Soviet Union - selectively block their citizens’ Internet access. Even more countries legislate to control what can and cannot be said, downloaded or linked to. “You have no sovereignty where we gather,” said Barlow. Oh yes we do, the governments of the world have replied.

Access Denied is a survey of the practice of Internet filtering, and a sourcebook of details about the countries that engage in the practice. It is written by researchers of the OpenNet Initiative (ONI; http://www.opennet. net), an organization that is dedicated to documenting global Internet filtering around the world.

The first half of the book comprises essays written by ONI researchers on the politics, practice, technology, legality and social effects of Internet filtering. There are three basic rationales for Internet censorship: politics and power; social norms, morals and religion; and security concerns.

Read more »

Guest Post By Sohaib Athar

I, the good cop, mailed a long rant to the PTCL Broadband manager, Mr. Ali Raza Baloch, last week, after getting his email from the helpline.

He forwarded my complaint to a couple of relevant people, asking them to help me out, but that didn’t happen.

Meanwhile, a friend, the bad cop, sent a written complaint to PTA - the PTA people wrote a letter to PTCL, and PTCL called my friend, and promised they will upgrade ‘tomorrow’ - which happened to be a local holiday, so ‘tomorrow’ never came.

Today, my friend went in person to the Broadband office, spent two hours there, met Ali Raza face-to-face and explained the situation to him. Ali Raza contacted his team, found out that my friend’s upgrade was stuck in Islamabad somehow, and got the wheels in motion for him. My friend did manage to get my connection upgraded in the process though - so when I woke up today, I found my modem connected at 510kbps.

So, for anyone who is desperate to get the promised upgrade, you can be proactive and follow the same route instead of waiting for something that PTCL owes you but is reluctant to provide. I’m getting about an 80% throughput - 410kbps or so, which is good enough for jerk-free Youtube, and the upload speed of 300kbps is helping me save a lot of time as well. 20$ for 512kbps is still about 6 times more expensive than the 50$ for 6mbps that my American friends enjoy, but I hope we will get there eventually. Thank god for competition.

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

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.

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?

An optimistic point of view, reported at WiMAX.com.

According to Juniper Research, half of all mobile WiMAX subscribers will be located in Asia by the year 2013. This half will account for roughly 40 million subscribers concentrated mostly in Korea, Pakistan, Taiwan and Australia.

The reason? It is believed that WiMAX’s growth will initially be spurred by areas where wired access was not a viable option. WiMAX’s ability to deploy quickly and efficiently in areas that were previously underserved will make it an attractive option for such countries and locales.

Top markets for 2013, according to the research, include the United States, Japan and South Korea. The caveats? Spectrum and devices. In order to reach a potential 80 million subscribers licenses must be acquired in a timely fashion. Furthermore, in order to utilize the WiMAX network, WiMAX-enabled devices will be an obvious necessity. Future projections on the success of WiMAX are hinged on these two elements. Therefore, as more spectrum is allocated and more devices are developed the likelihood of these future projections will continue to increase.

I wrote about Link dot net a while ago while reviewing the WiMAX situation in Pakistan. This week Link dot net has launched in Pakistan with the usual media blitz. Tee Emm writes at Telecom Grid Pakistan about this new player and what it means for consumers. Kashif Aziz also wroteon Chowrangi.com about this new player in Pakistan broadband market. Kashif writes that “Operating from Lahore, LinkdotNet Pakistan offers broadband Internet through DSL and WiMAX technologies for the Home and Corporate users along with the traditional Dialup Internet. “

Lets wait till the service gets operational and covers the major cities. It will be interesting to see if consumers actually benefit from this. If all goes well the broadband penetration rate may get a much needed boost.

In  a recent interview with the media, Zouhair Khaliq speaks about Mobilink’s future expansion and investment plans and recent standing of the company among mobile and data service providers. Excerpts are presented below, full story here. As I have written before, Mobilink has been successful in 2 strategic directions. It has maintained its top position in mobile market by adding wireless subscribers. Secondly it has diversified into the broadband and data services market by acquiring Internet Service Providers such as DanCom, WOL, DVCom etc . Overall Mobilink continues to be a strong player and a good profit source for Orascom, the parent company.

In fibre optics, Pakistan Telecommunication Limited (PTCL) had been the only company that owned an optic fibre backbone. Mobilink has successfully introduced competition through the introduction of a nationwide network. Mobilink’s optic fibre backbone provides the perfect platform to Mobilink for connecting its customers nationwide with highest level of voice and data quality with more reliability.

Deployment of the national backhaul stands completed with full protection, making Mobilink’ optic fibre backbone fully protected/redundant. By providing last mile connectivity Mobilink has positioned itself as a one-stop shop for meeting all communication requirements of enterprises and individuals. The optic fibre network currently covers 6,500 kilometres and will be increased to cover another 2000 kilometres very soon.

“We are envisaging sustainable growth in Pakistan. With mobile penetration still at around 43 percent, the room for growth is immense. The growth is not only limited to mobile telephony, as there are huge opportunities in other fields like broadband (optic fibre, DSL, WiMax), LDI etc. This coupled with the enabling environment being provided by the Pakistan Telecommunications Authority ensures an excellent future for this sector,” he said when asked to comment on the company’s future plans in Pakistan.

Article from Taiwan about the potential growth of WiMAX in coming years. Full story here. This is in the context of rapid overall growth of the information and communications technology (ICT) market in the Asia-Pacific region. The spending will reach US$154 billion in 2008, up 10% over 2007, with China and India together contributing about half of the spending, according to a prediction by ICD.

With companies of worldwide interoperability for microwave access (WiMAX) network to start building related hardware next year, the new network technology is expected to bring huge business potential worth US$25 billion worldwide in next five years, according to Market Intelligence Center (MIC), a market survey institute for the sector making ICT (information and communication technology) products.

Also, Topology Research Institute (TRI) opined that market demand for mobile WiMAX network will start growing in 2008 and sharply increase in 2009. In 2011, registered users of the network are estimated at 30 million persons all around the world.

MIC noted that starting this year through 2010, the U.S. plans to invest US$5 billion, the largest amount in the world, in constructing WiMAX network, with Taiwan and Korea to respectively pour US$1 billion and US$900 million in that. After bidding for WiMAX licenses, bid winners in Japan are also expected to funnel a total of US$3.8 billion into building WiMAX.

In fact, development of WiMAX technology is different among developed and emerging countries, with the U.S. tending to focus on integrated products based on the technology, and India, the Middle East and Pakistan on fixed WiMAX initially to make up their penetration rates of broadband network.