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.

I am glad to share the announcement of a new social initiative around Corporate Social Responsibility:

SocialBridges.Org - Seeking corporate social leadership in Pakistan.

This is a sign that citizen journalism and blogging is taking off in Pakistan. The topics and content of the SocialBridges will appeal to the growing consumer and commercial segment which needs a strong voice. There are some great insights there with a high-profile set of authors. I look forward to some thought-provoking stories there. See this announcement from Green & White.

Of course Telecom sector in Pakistan has been a major force behind corporate involvement in society. Consider the recent presentation by Zouhair Khaliq, CEO of Mobilink at TeleCON 2008 event in Karachi. The title of his presentation was Mobilizing Social Change and he talked about the recent launch of Mobilink Foundation. Get the full presentation in pdf: Mobilink presentation: Mobilizing Social Change.

Tee Emm was not impressed by the corporate brochure readout by Zouhair. However Bilal Mughal thought that there were positive aspects in Zouhair’s presentation. He writes this at Telecom Grid Pakistan:

Industry revenues are based on these mainstream factors and eliminating poverty is the heartbeat of all the problem whether it comes to you in the form of purchasing power or uplifitng the life trends from one consumer sect to another (higher). These things grow to be a central part of your company plans especially in our GDP environment and rotating them around different conferences provides with the direction to other participants to target the source issue of the market because at the end of the day if I sell dialup connection I would not want to sell at 2Rs if I’m selling at 5 today and you can only do that by increasing the consumer power at various levels and keeping it stable.

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

Consumers in Pakistan are faced with a variety of challenges with few avenues to resolve their issues. For telecom customers PTA is the regulatory body responsible for consumer protection. PTA has been working to step up its efforts and it has introduced a consumer rights ordinance.

There is another channel as well which is less well known. This is the Punjab Consumer Protection Council (PCPC), based in Lahore. A recent article on Consumer rights trends from the director of PCPC was published here. This post introduces readers to the diligent work of Punjab Consumer Protection Council in more detail.

PCPC has been working proactively to gather and analyze data about consumer issues and to take concrete steps to resolve them. Here are a few excerpts from the work of PCPC (reproduced by permission) which highlights various problems and issues with telecom industry. For further information or to file a complaint please contact PCPC Headquarters Office, 135-J Model Town, Lahore, Ph # 042-5857927, 5855471.

Charges usually unknown to consumers

• Paktel to Paktel calls are charged on per second basis.

• Warid to Warid calls are charged on 30 sec duration.

• ^Telenor to Telenor airtime charges for 2nd min onwards Rs. 1.67 per min, Telenor to other networks 2nd min onwards Rs. 2.82 per min (including 15% GST).

• Off-peak Time: Ufone & Warid 10 pm to 7 am, Paktel 10pm to 7am.

• 10% Advance Tax is deducted from the purchase value upon Card Activation on all Operators with the exception of Warid Telecom.

A few other Issues

• No Customer Charter
• No Standard Contract
• Falling QoS

This pie chart illustrates the common service quality issues faced by consumer of telecom. This chart is based on a questionnaire-based survey conducted by PCPC itself containing the sample size equal to 100 telecom users relating to different segments of the society.

Photo by Waheed Zuberi. I spotted this on Pakistaniat where Owais Mughal took to poetry to capture the essence of the moment. Whether you find this amusing or a blatant misbuse of cell phone, this is how life moves on in places where cell phones go from almost zero to near 80 milion in few years. 

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

According to LIRNEasia’s latest comparative study of price and affordability indicators in eight South Asian countries, Pakistan is near the top in terms of affordability. For Pakistan the study used Jazz Budget (Prepaid) and Indigo Freedom Plan 1(Postpaid). See an example comparison chart.

Overall the study concluded that “Bangladesh had the lowest average monthly cost of using a mobile at all levels of use (low, medium and high) for different tariff plans (prepaid and postpaid). Pakistan, India and Sri Lanka follow closely, while Bhutan, Maldives and Afghanistan are seen to have significantly higher average monthly mobile costs.” 

Here’s some background on how the study was done - should be interesting for business & economics students:

The study compares mobile tariffs in South Asia using price baskets, derived from those used by the Organization for Economic Co-operation and Development (OECD). The baskets are calculated for low, medium and high users for pre- as well as postpaid tariff plans, factoring in usage charges (voice and SMS), line rental, connection charges (depreciated over a three year period), and applicable taxes.

For further information see the original article at LIRNEAsia site or read the Full Report (pdf)

PTA has announced a competition for Telecom/ CT professionals and students, asking them to write papers on the topic of “Connecting People With Disabilities, ICT Opportunities for All“. This is related to the World Telecom Day on May 17. First prize is Rs 25,000. See the details on how to enter by clicking on the image on the right.

I commend PTA on encouraging ICT folks to tackle this much needed problem. I hope that this will result in plenty of actionable ideas which are suitable for Pakistan’s conditions. I’ll be glad to help any students out there who want to compete.  Hurry, the deadline is March 31!

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

Recently the newly launched Mobilink Foundationcame under discussion at Telecom Grid Pakistan. Some members of the group were skeptical of the foundation and thought of it as another marketing tactic. My view on this is optimistic - whats better? a successful company with a dedicated organization or the usual half-hearted efforts on social activities without focus?

Bottom line is that as long as some useful work gets done for the society I don’t mind the marketing advantage for the company … thats a side benefit, a bonus. I hope that the Mobilink Foundation succeeds at their stated aim and it is staffed by people who truly care about the future of children in Pakistan.

Our vision is free access to education for children and healthcare for all Pakistanis. We seek to promote a country in which all children go to school and people have access to healthcare, irrespective of their financial strength and background. We aim to bring about sustainable improvements to the living standards of the underprivileged by working with local communities and relevant organizations within Pakistan.

Read more »

According to PTA released numbers the total mobile subscribers in Pakistan crossed 76 million. During 2006-07 the revenue of mobile industry was Rs.133 billion, an increase of 48% from previous year. The 4.12 billion US dollars of foreign investment poured in the telecom industry in the past year has been a major driver of this growth.

This is certainly a big achievement and PTA deserves a pat on the back. The challenge of course is to sustain this growth in a fair manner to all and not at the cost of the basic rights of consumers. Lets all remeber the basic point that consumers in Pakistan deserve good service at competitive rates. PTA must not allow the quality of service fall below reasonable standards.