I leave it up to you to comment on the achievements mentioned above. I think the previous posts and comments on rising price were clear enough that consumers are not satisfied with the recent direction of telecom sector in Pakistan.
The issue of imported mobile handsets in Pakistan is getting attention from foreign press as well. Here’s a report from Press Trust of India /Rezaul H Laskar.
Pakistanis spend about one billion dollars a year on imported mobile handsets, with 20 per cent of users changing their phones up to three times a year.
Most markets in major cities are chock-a-block with shops — ranging from plush showrooms to small kiosks — offering the latest handsets and a variety of services, including the “unlocking” of handsets smuggled in from abroad for as little as Rs 700.
Apple’s iPhone, brought in illegally and hacked for use in Pakistan, goes for about Rs 40,000 in shops here, which also offer a wide array of cheap handsets aimed at people living in areas not covered by fixed phone services.
Like their counterparts across the border in India, cellphones with cameras, MP3 players and all the other bells and whistles are a trendy fashion statement with Pakistani youth.
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.
As reported by Associate Press of Pakistan which cited the PTA 2007 annual report. After all these years there is still talk of incentives for handset makers and all that but no tangible plans have been announced. It also misses the point that with large scale phone manufacturing in India and China, it is hard to attract manufacturers to Pakistan.
Around 20 per cent of mobile users in Pakistan change their handset thrice a year which indicates that Pakistan is a lucrative market for manufacturers of mobile handsets and other telecom equipment. A similar percentage of mobile users change the mobile handset once a year and this could be a successful business model, said Pakistan Telecommunication Authority (PTA) in its latest report.
A survey conducted by the Authority this year also found that 20 per cent user change the mobile handset every two years.
The report said the strategic location of Pakistan which has spent about $1.347 billion on import of cellular mobile handsets and other telecom apparatus in 2006-07 is also an added advantage.
According to the report, the government was considering giving incentives to leading manufacturers of cellular mobile handsets and telecom equipment to consider manufacturing mobile sets and other equipment locally where more than two to three million subscribers were being added on cellular mobile networks every month and still a large patentable exists.
PTA has released annual report for 2007 at its website (Media Center >> News/Updates). It is professionally written and has a wealth of information and supporting content (67 figures, 28 tables and 10 annexes) . Students, journalists and analysts should find this very useful. The contents of the report will be discussed and debated here in upcoming posts.
Here are the chapters, each available in pdf from the PTA site:
Chapter 1 - Economic Performance of Industry
Chapter 2 - Regulating the Competition
Chapter 3 - International Relations
Chapter 4 - Mobile Cellular Services
Chapter 5 - Long Distance International
Chapter 6 - Local Loop Services
Chapter 7 - Broadband and Value Added Services
Chapter 8 - Telecom Deregulation in AJ&K and NAs
Chapter 9 - Trends in Telecom Technologies
Of course there are much bigger things at stake for Pakistan at this time than telecom but the impact to economy cannot be taken lightly. We have been discussing and writing about the progress and the potential of telecom industry and about foreign investment in Pakistan. The political crisis changes everything. This graphic from WSJ presents a good snapshot of the situation. What are the implications of this crisis?
First, the damage to the overall business and economy - of which telecom is a major part - is deep. The extent of recovery will depend on the resilience of the nation and the duration of the conflict. Now this turmoil has the potential to erode the progress in telecom and other sectors which the government likes to mention so often. Second, it is important to not get distracted and keep focus on the real issues (respect for rule of law and human rights). Third, keep the actions of individuals separate from the sentiments displayed by the majority of the nation, as aptly pointed out by Adil Najam. For me this struggle is about following the right path to achieve the right goals and not sacrificing principals for short-term and dubious reasons.
Bloggers have taken a lead role at reporting the situation. International media has mentioned that it is very hard to get information from Pakistan and outlets such as CNN are relying on bloggers to share information with them. WSJ mentioned many bloggers in another article today (see below).
For those who would like to know more about the current situation here are some links from Pakistani bloggers.
I previously wrote about the ways telecom sector has contributed to the economy of Pakistan and how various benefits have spread in other business sectors of the country. The qaumi khazana (government revenue) has also done very well because of tax and other revenues. Here’s a snapshot (source: Deloitte) of the additional revenues which mobile telecom companies pay to PTA. Given this solid cash flow to the telecom authority it is even more important for them to safeguard consumer rights and protect them from the various issues we discussed here.
Continuing the series on mobile communication benefits to Pakistan economy, here I have highlighted the economic impact and included some employment numbers. Source is the Deloitte report mentioned in the earlier posts.
Here’s the information about the employment numbers from the mobile network operators (not from the whole sector as is noted below) - this is related to the mobile value chain post. I hope that this data will serve as a good reference to students and researchers. It also makes for a good case study for emerging telecom economies.
This is in another post related to the series on economic impact of mobile telecom in Pakistan. Among other interesting items Deloitte’s report also gives information about the various types of tax revenues from the mobile companies. See how the SIM activation tax went from Rs 2000 to Rs 500 within 2 years. This aim of the study was to show that high SIM activation tax slows mobile growth and a decrease in SIM activation tax will drive mobile growth higher without impacting the government revenues negatively. It is clear from these numbers that both PTA and the Revenue board have benefited amply from the mobile growth.
The table below gives the breakdown of the numbers for the above chart. Notice that a high proportion of tax revenues comes from sales and consumer related taxes.
This is part 2 of the series on economic and social benefits of mobile services in Pakistan. This will focus on the mobile value chain, that is, the share of different stakeholders such as mobile network operators, fixed line operators, handset makers, franchises, network equipment and service providers, government revenue etc. The diagram taken from Deloitte’s study gives a very interesting overview of the mobile value chain in 2006. The numbers (PKR millions) next to the arrows are revenues, those in brackets represent value add while arrows indicate flow of funds. Click to see a higher resolution view.
Can any one comment on the accuracy of these numbers?
This blog was started by Babar Bhatti to share and analyse new and interesting developments in Pakistan Telecom industry. More ...
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