State of Telecom Industry in Pakistan

Recently we have been discussing the recent slowdownin telecom growth in Pakistan. In a recent interview, Irfan Wahab Khan, Executive Vice President Telenor Pakistan, sharply criticized the recent policies of Pakistan government and PTA. He mentioned the high rate of tax - 21% - as a major issue for telecom industry. He also talked about the Rs. 500 subsidy provided by mobile companies for each SIM card sold and the controversy over handling of illegal SIM sellers.

We tend to agree with him. The last budget went overboard with the tax increase on telecom services. If an industry is doing well and is successful in bringing foreign investment to Pakistan (Wahab pointed out that Telenor alone invested $2 billion in last 3 years), let it work without the burden of unnecessary taxes.

There were other grievances as well. Irfan also said that his company was not against the quality surveying of the service providers but it should be transparent and impartial. I think Telenor did not do very well in the QoS surveys and there has been criticism of the way these surveys were conducted.

He appealed to the government to call a roundtable conference of all the service providers to get rid of the illegal sims being used for crime and the terrorist activities while the police action against retailers and franchisers should be stopped.

As reported in the media, The Competition Commission of Pakistan (CCP) has said that Mobilink is involved in an unreasonably restrictive trade practice by not allowing its blackberry subscribers to other service providers. Before reading this news I did not know that there was a government department called Competition Commission of Pakistan … see their website. The issue here is that whether Mobilink can lock subscribers by providing them a subsidized Blackberry handset. It would be interesting to see Mobilink’s response and how this gets propagated to other mobile network operators such as Zong. This situation is very common in USA and it takes quite an effort to get a phone unlocked. By the way, isn’t PTA supposed to be involved in this as well?

The CCP has passed an order on the show-cause notice, issued by the MCA to Pakistan Mobile Communications Limited (Mobilink GSM) for carrying on unreasonable restrictive trade practices. The order said that currently the Mobilink GSM blackberry customer did not have any option to switch over to another service operator whether the SIM enabled or not.

Most of the customers were not aware about the SIM locking restriction. Similarly, no procedure was in place whereby the customer could seek unlocking of the SIM from Mobilink GSM, if it desired for the purposes of switching over to another network/service provider, said the order.

According to the order, the tie-in arrangement of bundling the handset, Mobilink’s telephone service and the blackberry service products through SIM locking has the effect of unreasonably preventing, restraining or otherwise lessening competition. In the Commission’s considered view, locking the SIM card in the handset and preventing its replacement restricts customers from changing their service provider. With no procedures in place for unlocking, it effectively deterred the consumer choice and mobility, it said.

The flaws in original policy creation and implementation resulted in millions of unregistered SIMs. Now the shift in SIM registration policy is causing big headaches for consumers and contributing to the slowdown in mobile growth. My previous posts on this topic can be found here. It looks like the SIM blocking has been implemented for about 6 million SIMs.

According to this report from Business Recorder:

The initiative taken by Senate’s Standing Committee on Interior to curb unregistered Subscriber Identity Modules (SIMs) Card culture has resulted in blockage of eight million unidentified connections, said Senator Talha Mehmood, Chairman of the committee, here on Friday.

He said that the CEOs (of all the mobile companies) had informed him that their business was adversely affected by the action taken by the committee. The CEO’s also handed over the CDs of 8 million unregistered SIMs for verification, he added. The CDs had been handed over to law enforcing agencies, he further said.

Out of these 8 million unregistered SIMs, 1.2 million had been reissued after proper verification and documentation. Whereas, 0.8 million blocked SIMs were given a dead line of July 25 for verifications, he added. He said that in order to find the culprits behind the distribution of unregistered SIMs, special teams raided across the country.

Talha said that the mobile companies were given a time frame till July 31 to complete their work in this respect. “Afterwards, from August 1, we will launch a crackdown against them,” he warned. He said that after completing this task the committee would take action against the dilapidated condition of jails in the country.

Image credit: Intouch

Dual-band, dual-SIM on the same phone? This Coolpad looks like a really cool phone for travelers and for people who love to swap out SIMs often. Lets see if it delivers as promised. As reported at CNET:

For the frequent travelers, remaining contactable via mobile is serious business. Should you use roaming to remain in contact but pay exorbitant fees just to call a local number? Or switch your SIM card to a local account and risk missing important calls? Most compromise by having two phones, which frankly, is no solution at all.

Coolpad phones claim to be the first in the market with dual-SIM devices that not only work with more than one network, but can even switch between GSM and CDMA accounts without batting an eye. Currently retailing in Indonesia, China and Africa, handsets range from US$100 to US$350, with premium models going for as high as US$1,000. Granted the only drawback we’ve seen so far is the lack of 3.5G connectivity, but Coolpad phones will save you a bundle in roaming fees.