State of Telecom Industry in Pakistan

Guest post by Ali Abbas

It has been a long time since I have blogged which happened due to a number of factors and the most contributing one was lack of time! Well guess what? I am finally back and it is no surprise that the Telecom – Student scenario is still at the exact same spot where I left it. Upcoming telecommunication graduates are all worried and tensed biting nails and spending all their time in cursing the world for being so mean and not generating enough job opportunities! Yesterday I met a university junior after a long time and all he could talk about was the troubling thought of job shortage in Pakistan and complaining about all the options being “saturated” and dried up.

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In 2008 I wrote about VNL and its efforts to create low power base stations. Here’s an update about their work which appeared at Technology Review.

An Indian telecom company is deploying simple cell phone base stations that need as little as 50 watts of solar-provided power. It will soon announce plans to sell the equipment in Africa, expanding cell phone access to new ranks of rural villagers who live far from electricity supplies.

Over the past year, VNL, based in Haryana, India, has reengineered the traditional technology of the dominant cellular standard, called GSM, in order to create base stations that only require between 50 and 150 watts of power, supplied by a solar-charged battery. The components can be assembled and booted up by two people and mounted on a rooftop in six hours.

One such station–dubbed a “village station”–can handle hundreds of users. Groups of such village stations feed signals to a required larger VNL base station within five kilometers. In turn that larger station, which is also solar-powered, relays signals to the main network. The village station can turn a profit even if customers spend on average only $2 a month on the service, instead of the $6 required to make traditional systems cost-effective, the company says.

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The discussions on 3G and 4G hinge on a fundamental question. Will the investment make sense for the industry in near term? We know that in long-term, 3G and 4G technologies offer great benefits. As this article mentions, LTE, a version of 4G, uses the radio spectrum more efficiently, improving network capacity. That will be crucial as smart-phone use explodes, straining cell networks. Consider the case of Verizon in the US which is pushing for 4G/LTE. Much of the investment for Verizon is around the purchase additional spectrum. It spent $9.4 billion for that in 2008. The same concerns apply to 3G in Pakistan.

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USF has been active in extending ICT access to under-served areas of Pakistan. Now its the turn of South Punjab to get  Broadband Internet, funded by Universal Service Fund (Ministry of IT), worth Rs. 1.95 billion. This project will be implemented through PTCL and Worldcall and will providebroadband facilities in un-served urban areas of Southern Punjab. This covers a population of 4.4 Million in 38 cities located in districts of Bahawalnagar, Bahawalpur, D.G. Khan, Khanewal, Leyyah, Lodhran, Multan, Muzaffargarh, Rahim Yar khan, Rajanpur and Vehari.

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We have mentioned the efforts of making telecom infrastructure green many times. The goal is to expand mobile communication to areas not served by electrical grids, as well as to reduce operating expenses and environmental impact. Vodafone Qatar and Alcatel-Lucent announced the deployment of the first hybrid powered Base Station in Qatar, using an integration of solar and wind energy. Vodafone and other companies intend to learn from these trial sites and plans to apply these techniques all over the world.

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We have talked about netbooks and how the drop in price of these devices will impact computing, mobility and the need for mobile data consumption over wireless networks. The trend for smaller, cheaper Internet based devices continues full speed. See the graphic below (via WSJ) compares current netbooks to “smartbooks”, the next generation of ultra mobile netbooks.

PTA has recently published a long overdue paper outlining the key performance indicators (KPIs) for fixed broadband services in Pakistan. The objective of defining these indicators, per PTA paper, is to create transparent, quantifiable and measurable standard service parameters for broadband which the service provider is entailed to provide and the user has a right to expect.

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Huawei was once regarded as a low cost telecom equipment provider. An excerpt from a Wall Street Journal article which talks about how Huawei is now challenging its competitors with better quality products.With sales of $18.33 billion in 2008 it has a huge impact on telecom industry. Read more »

When compared with cellular phone growth, Broadband has been slow to take off in Pakistan. However the last two years show some progress  in terms of growth (a little over 20K subscribers per month), more choices of services in more places and most importantly a significant drop in cost for broadband access (~Rs.1200 per month on average). Another welcome trend is to move towards unlimited broadband.

PTCL has taken the lead with its DSL and EVO offerings while WorldCall, Mobilink Infinity, Wateen / WiMAX, Qubee,  NayaTel and Wi-Tribe have also offered their services.

According to PTA, “broadband subscriber base grew by 146% adding 245,727 subscribers during July 2008 – June 2009, while broadband connection charges for 1Mbps connection dropped below Rs. 1000. There were 413,809 Broadband subscribers in June 2009 as compared to 168,082 in June of 2008.”

At the current rate of broadband growth we can cross the half-million mark by December 2009. We need to get to 1 million much faster.

Daily Times recently wrote about broadband, excerpt below.

The Sustainable Development Policy Institute’s (SDPI) Study Group on Information Technology and Telecommunication in its 56th meeting discussed the problems that hinder broadband growth in Pakistan. Relevant stakeholders participated in the meeting. Wahaj ul Siraj of NayaTel and Zamir Bhatti of Wi-tribe reviewed the existing policy and infrastructure sharing issues.

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Telecom companies in Pakistan are one of the major power consumers and in addition to the increasing cost of electricity, they also face the challenge of lack of access to the electricity grid in rural areas to supply power to base stations. A few pilot deployments of  solar powered base stations were luanched earlier.Now Telenor Pakistan and Nokia Siemens Networks (NSN) have signed an agreement that will provide NSN’s off-grid site solutions that use solar energy to power Telenor base station sites in rural and remote areas. This is expected to result in substantial cost savings for Telenor Pakistan along with the social benefits that come with using renewable and clean energy.

Nokia Siemens Networks will design the sites, taking into account local solar mapping, site landscape and other factors to maximize the use of an abundant, clean, and natural energy source. Nokia Siemens Networks’ Green Energy Control will help deliver a sustainable solution while optimizing operating costs.

The solar-powered sites will be implemented using Universal Services Fund (USF) that was awarded to Telenor Pakistan in 2009. USF-based contracts aim to provide access to mobile services for underserved and unserved areas of Pakistan. Telenor Pakistan, till now, has been awarded three USF contracts for Mirpurkhas, Malakand and Bahawalpur region.

“It’s important that we connect the world in such a way that not only maximizes benefits for consumers and businesses, but also ensures the welfare of our planet,” said Saad Waraich, the Pakistan country director for Nokia Siemens Networks. “Providing communications to rural areas will become increasingly important and we believe renewable energy will be the first choice for such installations. In fact, the majority of base station sites installed by us by 2011 will use this form of energy. We are especially proud to partner with Telenor – a definite trend setter for the use of environmental technologies in network expansion.”

The GSMA has estimated that more than 75,000 new off-grid sites will be built each year through 2012 in developing countries. About 80% of the energy in a typical mobile telecommunication network is consumed by base stations. Renewable energy sources such as wind and solar power offer a reliable alternative to sites with limited or non-existent electrical grid access. Nokia Siemens Networks has already deployed more than 360 sites that exploit renewable energy and has over 25 years of experience in implementing solar-powered sites.

Source: Nokia Siemens Press Release

PTCL and DSL Operators have signed a DSL agreement for provision of broadband services under the auspices of Pakistan Telecommunication Authority (PTA). The signing ceremony was held at PTA HQs, Islamabad where Chairman PTA, Dr. Mohammed Yaseen, Member (Finance) Syed Nasrul Karim Ghaznavi, Member (Technical) Dr. Khawar Siddique Khokhar, Senior representatives of PTCL and DSL operators were present. Under this agreement, DSL operators will now have a choice to acquire IP bandwidth from any other operator in addition to PTCL which will enable DSL operators to offer broadband services at competitive tariffs.

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Usage based pricing for bandwidth is common in Pakistan and other developing countries. In US, flat rate pricing is more prevalent. But that is changing as more and more bandwidth consuming products are becoming common. This causes worry to many who think that the change will hurt consumers and adoption of new services. Here’s one view.

Some cable companies have instituted monthly usage limits, though they are usually so high they affect only the heaviest users. A plan with 150 gigabytes, for example, would enable sending and receiving 75 million emails, or downloading more than 30,000 songs. The average Internet user consumes around 15 gigabytes a month, according to University of Minnesota professor Andrew Odlyzko.

Comcast earlier this year instituted a cap of 250 gigabytes a month. The company says the rule affects a very small minority of its high-usage customers. Some smaller and regional Internet service providers also charge on a metered basis, including Sunflower Broadband in Kansas. Frontier Communications Corp. last year briefly used metered pricing in Rochester before scrapping the policy in the face of protest.

“Unquestionably, the carriers erred in their initial selling of broadband with a flat rate,” says Elroy Jopling, research director of Gartner Inc. “They assumed no one would use it as much as they do now, but then along came high-definition movies. They’re now trying to get around that mistake.”