State of Telecom Industry in Pakistan

Good development. PTA has proposed a few actions for dealing with spam. This includes spams SMS, emails and unwanted calls. See the proposal here or get it from PTA website. I doubt that a fine of 300 Rs will discourage professional spammers. Legitimate companies should start working on their opt-in lists.

It is proposed that a do not call register (DNC) may be maintained by telecom operators. The DNC Register will be a database having the list of all telephone numbers of the subscribers who do not want to receive unsolicited calls. After the establishment of DNC register a subscriber who does not wish to receive Unsolicited calls, can register their telephone number with their telecom service provider to be included in the DNC.

Operator shall upload the number to the DNC within 45 days of receipt. The Telemarketer will have to verify their calling mobile numbers list with the DNC register before making a call. An amount of Rs 300/- per call/message should be prescribed to discourage telemarketers who make calls to numbers registered in Do Not Call list. The defaulter telemarketer will face legal action.The impact of imposing a higher charge for calls and messages which have a commercial purpose attached to them will to some extent ensure that only legitimate calls are made i.e calls to recipients who do not have any problem with attending commercial calls.

Awareness is the key to fighting the spam problem. There are a number of channels listed by PTA but surprisingly blogs and other new media is not mentioned.

The Authority puts forward a media campaign check list which shall be followed by the Authority in collaboration with operators to create spam awareness:
  a) Public awareness activities to target users first and foremost, but also large corporations, small and medium-sized enterprises, direct marketers and online operators.
  b) General awareness activities to be posted on the Web or other media such as television, newspapers and magazines. Brochures may be distributed in schools, made available on all operators’ websites, and also distributed as a leaflet in IT magazines. Educational cartoons about spam, unsolicited and obnoxious calls controlling and reporting and online security broadcast.

Pakistan is in second place compared to other South Asian countries in terms of certain economic indicators according to a report from World Bank on global business ranking . The business rankings report highlights the business reforms which have been implemented in Pakistan and provides details of various aspects of starting and running a business. In terms of issues, energy shortage is one of the major problem in Pakistan just like other emerging economies.

Here’s a summary, taken from Dawn Blog.

A recent World Bank report has declared Pakistan as one of the top favourable economies in the world. The “Doing Business 2008″ report states that Pakistan is in second place compared to other South Asian countries in terms of certain economic indicators, such as: ease of doing business, dealing with licenses, and protecting investors.

Pakistan is quickly emerging as a powerhouse in the region, partly due to its fast paced IT industry. The government’s policies towards foreign investors have also contributed in helping the country stand out. These include 100 per cent foreign equity ownership, 100 per cent repatriation of profits for foreign investors and tax exemption for the sector till 2013.

An increasing number of foreign companies also prefer Pakistan for their outsourcing operations. This is due to the large pool of English-proficient professionals, cheap connectivity rates and competitive operational costs.

‘Doing Business 2008? is an annual report that evaluates the regulations that directly impact economic growth and provides objective measures of business regulations and their enforcement. The report evaluates business
activities based on regulation affecting the “10 stages” of a business’s life: starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

Story via Telecom Grid Pakistan.

Here’s a view of how the mobile companies stack up against each other. In terms of the subscriber growth from Jan-Mar of 2008, Telenor is at the top.

In terms of total number of subscribers (see the chart on the right), Telenor (16.7 million) is closing the gap with Ufone (17.2 million). I am interested in hearing views about the drivers of this growth.

By end of Q2 it will be interesting to re-visit this and see whether Zong lived up to the buzz it created!

This is bad news for Pakistanis abroad: they will pay considerably more for calling Pakistan starting May 1. See the news item from Dawn. It seems to me that we are regressing in terms of policy making. Who benefits from this? PTA and long distance operators. What about consumers? Well, a lot of consumers and industry experts are upset and are taking various actions such as expressing their concerns through various offline and online channels (see this petition). One thing is certain: the grey telephony market will flourish because of this. Expect more noise around this in the coming days. I am not looking forward to my next bill for international calls!

Salman Ansari (former CEO of Paktel) has posted interesting predictions at various online forums. Here’s an excerpt:

Quality of calls of inbound calls specially from the US will become terrible (cellular terminations) as most inbound terminations will come in via low cost grey market – biggest culprits will be the biggest carriers (AT&T, Bell Canada, etc).

Wasim Baig summarized his views about this change at TGP:

Pros:
1. LDIs get a higher rate, higher margin
2. APC contribution increases
3. Origination increases
4. Balance of trade in PK’s favor

Cons:
1. Grey market increases
2. LDI may increase origination rates as well
3. Yet more regulation! PTA stays relevant to pricing ..
4. Market pricing takes a back seat

Here’s more from Dawn article.

“The PTA, in fact, has addressed the demand of local operators, who have been pleading for increase in such rates, as it would not affect the local consumers of the facility,” said the source. “But it would naturally increase the cost of calling to Pakistan from outside”.

Read more »

Taiwan-based High Tech Computer Corp. commonly known as HTC, has been doing some amazing things but without much fanfare. Now its getting well-deserved attention from the media and investors. Analysts are projecting HTC to be a major player in Asian handset markets. One of its star products is The Touch, which, like the iPhone, uses a touch-sensitive screen rather than dedicated buttons for many of its functions. Touch was a big profit-driver for the company last quarter. This week at CTIA, HTC Touch Dual was introduced with Windows Mobile 6.1. Later this year HTC is expected to launch Dream, an ultrathin version of Touch.

Thats not all though. HTC will be making android based phones as well. A recent WSJ article says that the buzz for Google phone may make HTC a smart stock for investors seeking growth in uncertain economic times.

HTC started in 2002 making Windows-based smart phones under contract for companies such as Palm Inc., Dell Inc, and Hewlett-Packard Co. Now, nearly 80% of its sales comes from handsets it makes in collaboration with telecom operators across the globe and under its own brand.

This month, HTC announced an alliance with Reliance Communications Ltd., India’s second-largest phone company by subscribers, to promote smart phones in that country. HTC’s CDMA handsets will be used on Reliance’s network, a move that will strengthen HTC’s foothold in one of the world’s fastest-growing phone markets.

Read more »

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

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

BusinessWeek Story. In Pakistan Nokia has the number 1 spot and Samsung faces strong competition. Motorola does not have a chance against Samsung and other Asian handset makers!

With Motorola (MOT) struggling for more than a year, Samsung overtook its American rival in 2007 to become the world’s second-largest handset maker [BusinessWeek.com, 11/30/07] after Nokia. Its global market share is up about three percentage points from last year, at 14.5% in the third quarter, compared with Motorola’s 13.1%. And for every quarter this year, Samsung set a new sales record, with the 115 million phones sold in the January-September period exceeding the 114 million sold during all of last year.

Samsung believes its record-breaking run is just beginning. This year, its sales are expected to top 160 million phones, up 40% from last year, and executives are confident the pace of its growth will be about double that of the rest of the industry next year, when they expect sales of 200 million. “The growth momentum is accelerating, and there’s no reversal in the trend,” says Samsung’s Executive Vice-President Chu Woo Sik.

Building on Cheap Handsets

The big question is whether Motorola can rebound and stop Samsung. New Motorola chief Greg Brown, who was chief operating officer before being named CEO last month, has spent the past few months tackling the company’s problems to try and restore the glory it had just after the Razr’s sensational debut in 2004. “Samsung will face challenges,” says mobile communications analyst Tina Teng at market researcher iSuppli.

Samsung’s top brass believe the company’s recent run is sustainable. That’s because Choi Gee Sung, a marketing expert who took over as Samsung’s telecom chief in January, has targeted the fast-growing market for cheap handsets, which wasn’t a priority for his predecessor, Lee Ki Tae, a former engineer.

Read more »

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.

‘For your convenience ptcl Pakistan Package has already been activated on your ptcl landline phone’. The default activation of the package by PTCL is unfair, unethical and inconvenient. First the voice mail and then this … what a brazen way to rip off customers! Just force these packages down the throat of consumers, many of whom will not realize or may not have time or knowledge to deactivate it. I have read and heard stories about how difficult it has become to call 1236 and get rid of this package.

Note that I am not criticizing the package, I am against the way it has been forced on each and every landline. If this package is so good people will make their own choice and get it. With this move PTCL has lost whatever goodwill it had. 

Is there any limit to which PTCL will not go to make quick money on the expense of consumers? How can you justify this blatant use of monopoly? Will PTA let them get away with it?

PTCL has consistently been facing market criticism with respect to its strategic management, policy, procedures, quality assurance, product flavors and orientation towards customer services. Our readers who have read the post on Balanced Score Card Technique (PTCL: Future Prospects & Challenges) on this blog can now see the practical implementation of BSC effectively being done by PTCL at present. If PTCL continues on the same path with focus on product, market & corporate leadership, they have all the means to differentiate for clear competitive advantage.

The Balanced Scorecard is a management tool that helps an enterprise to focus on holistic development across the organization rather than just focusing on a single area or on a specific objective, for instance, revenues & finance. Today, many large corporate entities across the world have adopted the BSC technique to exceed the overall growth objectives. The key areas of PTCL’s focus are:

The initiatives taken by the PTCL may not be enough for an abrupt change, however, if the strategic focus and strategy remains correct and effective as stated above, the list of initiatives will keep on increasing and shall lead PTCL towards Leadership in all the segments it serves.

After many months of the fastest growth ever, the slowdown has eventually hit the Pakistan mobile industry. The chart tells the story: since July the monthly additions have gone down. Mobilink and Telenor continue their strong growth trends and are set to be the leaders. Ufone growth was slow in Sep and Oct.

 Any explanations for this trend?