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.Â
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?
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
WIRED magazine has a great story about how Apple created iPhone despite initial setbacks and shook the wireless industry. It is a fun read and I found the background to have many lessons - as one example, the first phone which Apple came up with (ROKR) was a dismal failure and the first prototypes were also disappointing. The main take away here is that there was a strong desire to innovate and change the basic game. Hats off to the team which pulled it off.
For those working on the iPhone, the next three months would be the most stressful of their careers. Screaming matches broke out routinely in the hallways. Engineers, frazzled from all-night coding sessions, quit, only to rejoin days later after catching up on their sleep. A product manager slammed the door to her office so hard that the handle bent and locked her in; it took colleagues more than an hour and some well-placed whacks with an aluminum bat to free her.
But by the end of the push, just weeks before Macworld, Jobs had a prototype to show to the suits at AT&T. In mid-December 2006, he met wireless boss Stan Sigman at a suite in the Four Seasons hotel in Las Vegas. He showed off the iPhone’s brilliant screen, its powerful Web browser, its engaging user interface. Sigman, a taciturn Texan steeped in the conservative engineering traditions that permeate America’s big phone companies, was uncharacteristically effusive, calling the iPhone “the best device I have ever seen.”
Pakistan’s mobile telecom industry has a new reality to contend with: that of falling service quality (see the quality of service results below). If I could draw a graph it would show a rise in excitement, quality and investment in the years from 2002-2006 and from there the graph would fall down because of network congestion, poor quality of service and poor customer service.
This is typical of emerging markets telecom. In the beginning we had new companies coming in with promises and marketing campaigns. They were ready to subsidies costs and were willing to go the extra mile to bring in new customers and to keep them happy. Eventually their investors wanted financial results and they could not afford to keep spending. Look at where we stand now. One has to pay for a customer service call. The ads are misleading. There are hidden charges. Wrong billing is common. Calls get dropped. I can go on and on but you get the point.
However there is still hope. This is the time when companies with good service and solid long-term vision can succeed in keeping customers happy. I hope they don’t take Pakistani consumers for granted.
Here are the service quality results (source: PTA site). Deterioration of quality is evident.
As announced in various press releases, Motorola continues its bet on WiMAX. Part of the financing of this initiative is by Morotorla. See previous coverage of WiMAX in Pakistan and here. This is an interesting and expected development which puts pressure on Wateen to execute on the hype it created.
Motorola Inc. said Wednesday it has reached an agreement with telecommunications company Mobilink GSM to create a wireless network in Pakistan.
Motorola will design and set up the system using WiMax, a technology that allows transmission of wireless data over long distances.
The network will cover major metropolitan areas in Pakistan including Lahore and Islamabad and will allow Mobilink to extend its cellular service to include high-speed broadband.
This is the second such system Motorola will create in Pakistan and its fourth in the Middle East and Africa region.
Rabta is Urdu for making a connection. Here is the official Telenor press release about this. I am curious to find out more about the affordability of these centers and if these centers have the appropriate set of applications for the population in the remote areas.
“We want to establish an easy-to-access point for these communities to benefit from e-mail, scanning, faxing and printing facilities in their everyday lives. With information and Communications Technologies (ICTs) becoming an ever-increasing part of our lives, there is need for such facilities to be made available in Pakistan’s rural and semi-rural areas too”, said Sigvart Voss Eriksen, Chief Marketing Officer in Telenor Pakistan.
Telenor Pakistan recently launched Telenor Rabta Centres as part of a pilot project involving local communities. These community information centres offer all modern communication facilities under one roof. The services use Telenor Pakistan’s high-speed EDGE network.
Telenor Pakistan is collaborating with the GSMA Development Fund, Nokia Siemens Networks and the ILO (International Labour Organisation) on the project. Rabta Centres have been established in Quetta (Balochistan), Khuzdar (Balochistan), Bagh (Azad Kashmir), Jamal Deen Wali (Rahim Yar Khan, Punjab), Ahmadpur Sial (Jhang, Punjab) and 18 Hazari (Jhang, Punjab).
Each centre is equipped with two PCs with EDGE data card to connect to the internet, a printer, scanner, webcam and a handset with Telenor Pakistan connection.
The GSMA Development Fund is providing support in project management and facilitation activities for the pilot implementation. Telenor Pakistan and its project partners have selected entrepreneurs from the corresponding local communities to run these centres as their business. All entrepreneurs have been trained in computer and entrepreneurial skills.
See keynote at Wimax world 2007 by Motorola CTO Padmasree Warrior . She talks about the impact of Wimax on both emerging (Pakistan) and mature markets (US, Europe) and about the new on-demand applications which will ride the wave of always on mobile broadband. At a time when Motorola is struggling to regain its leadership position, WiMAX has become critical to Motorola’s future.Â
Here’s an application demo on a topic about which you will hear a lot in the coming days: Group and Integrated Messaging. Found out about SwarmTeams at InBabble where there’s an interview with the founder. This looks promising and is something which I could really use. What is your take?
A bit of background which may be interesting to you: Swarmteams has been developed in response to research into biological teams and groups (aka “bioteams”) such as micro-organisms, ants, bees and dolphins. The principles include:
Stop Controlling - Communicate information not orders
Team Intelligence - Mobilise everyone to look for group threats and opportunities
Permission Granted - Achieve accountability through transparency not permission
Always-On - Provide 24×7 instant “in-situ” message hotlines for all team members
Symbiosis - Treat external partners as fully trusted team members
Cluster - Nurture the team’s internal and external networks and connections
Pakistan Telecommunication Co Ltd (PTCL) on Friday reported a 24.7 percent fall in net profit for 2006-07 financial year, as rising competition led to a decline in revenues from call traffic. Sources: Reuters and other news sources.
The full results are not available on the investor section of PTCL site as of this writing but I hope that the details will be posted there soon. It will be interesting to watch the stock performance after these results and the recent announcement by Etisalat about acquiring controlling stakes. The analysts comments below are worth reading.
Highlights of PTCL financial results 2006-07:
PTCL earned net profit of 15.64 billion rupees ($258 million) for the year ended on June 30, down 25% from previous year. Earnings per share fell to 3.07 rupees from 4.07 rupees. This was in line with the market expectations of 15.41 billion rupees to 17.69 billion rupees range.Â
The company said its revenue for the year fell to PKR65.28 billion, from PKR69.08 billion a year earlier.
Operating costs increased to PKR46.56 billion, compared with PKR41.69 billion a year earlier.
PTCL announced a cash dividend of 2.0 rupees per share, its first payout for 2006-07.
Analysts Are Optimistic
As reported by Reuters, Analysts said the fall in profits was a result of lower revenue from international and domestic call traffic and increased competition from new market players.
“Since the implementation of deregulation policies in the domestic telecom sector, the company is facing immense competition from new players, especially in the long-distance and international calls segment,” said Abrar Hussain, an analyst at First Capital Equities Limited.
But analysts said PTCL’s profitability is expected to rise in coming years as it expands network and attracts more customers.
“We anticipate an 11 percent annual growth in net profit of the company during the next three years,” said Abrar Hussain, an analyst at First Capital Equities. PTCL’s profitability growth is to result from the cumulative impact of expanded fixed line network, including profit of 20.78 billion rupees last year.
“The company has potential to grow in the longer run if the management succeeds in implementing steps for network expansion, service customization, cost-cuttingand the introduction of new services and efficiency measures,” said Hifza Zia, an analyst at Atlas Capital Market.
According to Daily Times, Telenor has won the first USF bidding which was for Malakand area. There will be other biddings for Sukkur, Sibi, Chaghi, DG Khan and Attock. I hope the first phase work starts soon.
For more background on USF plans in Pakistan, see this prior post. More from the paper:
Telenor Pakistan won the final stage of technical and financial bidding for Universal Service Fund (USF), leaving Pakistan Telecommunication Authority Co Limited (PTCL), Warid Telecom and CMPak out of the competition, industry sources told Daily Times on Wednesday.
Sources said Warid Telecom and CMPak were unable to qualify for the technical bid. While in the financial bid for 1,200 villages of the Malakand division, on the higher end PTCL bid was Rs 1,748 million and Telenor’s was Rs 310 million, giving no choice to USF but to announce Telenor as the winner of the first bid decision. The decision will be announced within a couple of days.
Pakistan’s telecommunication industry - mobile communication in particular - has made impressive strides in the last few years after deregulation. However broadband growth in the country has been very disappointing - there are less than 100,000 broadband users in Pakistan. The open competition observed in mobile industry has not been replicated to broadband. Reasons include high prices, control of PTCL over bandwidth resources, policy issues, lack of infrastructure and legal disputes.
Enter WiMAX. Simply stated, it’s a relatively new standards-based wireless technology which is intended for large coverage areas on the order of several kilometers (instead of a few hundred meters, as is the case with Wi-Fi).
With base stations transmitting signals and some equipment at customer location, it promises fast bandwidth for both fixed locations and mobile users. In this backdrop, Pakistan made headlines in 2006 when Wateen announced plans to work with Motorola to rollout Mobile WiMAX, the largest network of its kind in the world.
Is WiMAX (Worldwide Interoperability for Microwave Access) the right technology for developing countries? In other words, will this new technology deliver the promise of broadband at affordable prices?
WiMAX comes with many theoretical advantages but its potential is yet unproven. Without getting too technical, it is purpose-built for Internet (IP) communication and is based on standards (as opposed to other proprietary solutions) endorsed by a respected world standards body, theInstitute of Electrical & Electronic Engineers (IEEE)*.
Pakistan’s Northern areas are in the news as telecom competition opens up there. PTA has announced licensing of fixed line telephony (Long distance, local loop, public phones) in AJK and Northern areas  which includes infrastructure and towers as well. See the official PTA notice.
Till recently Mobilink was the only major cellular phone player in that area. Then Telenor jumped in as well. Remember the Shandur Polo Festival earlier this year sponsored by Telenor? That was a good move by Telenor. Now it is being reported that CMPak will be offering services in AJK and Northern areas.
I hope telecom companies can become a regular sponsor of local events in these beautiful areas and work with NGOs to promote tourism while conserving the environment and local culture.
AJK and Northern Areas of Pakistan is a lucrative telecoms market due to the
historic absence of basic fixed telephone (wired) and a high remittance-rich
local population with strong connection in the United Kingdom and other
European countries.This area was served by a semi-military, semi-government telecommunication organization that goes by the name of SCO - Special Communication Organization which used to had exclusive rights of telecommunication services in the region. Of late, SCO had collaborated with various companies for WLL, GSM and Internet (DSL & Dialup) to offer these services in the region.
CTIA Wireless 2008 is one of the largest wireless events in the US. Among its various programs is the 
With base stations transmitting signals and some equipment at customer location, it promises fast bandwidth for both fixed locations and mobile users. In this backdrop, Pakistan made headlines in 2006 when Wateen announced plans to work with Motorola to rollout Mobile WiMAX, the largest network of its kind in the world.
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