State of Telecom Industry in Pakistan

Dealing with spam, unwanted calls and stalkers can be very stressful. Here’s some  information and links which can help you cope with this. While looking at this issue, we researched on the privacy policies of mobile companies operating in Pakistan. Out of 5 mobile network operators, we found 2 privacy policies which were posted online.

• www.telenor.com.pk/privacy/privacy.php
• www.waridtel.com/privacy_policy.php

For your reference you can block the user following the guidelines presented in our prior posts about Call and SMS Blocking, here and here. Unfortunately getting rid of the problem is not always that straightforward. For example, see this TGP discussion in which one member’s number was used – spoofed would be a better choice of word – for sending unwanted SMS.

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PTA has proposed changes to Consumer Protection Regulations2009 to include service withdrawal. See the announcement and draft document on PTA website. This is exactly what we have written about before. Kudos to PTA for taking this step.

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We had recently talked about Telecordia facing a hard time for its entry in India and facing scrutiny by Indian government. As mentioned earlier, Telenor also had to go through this. The latest is that Telecordia will be getting entry on the same conditions entry Telenor was allowed. The excerpts of the news item from The Economic Times gives the details.

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Mobile World Congress, the world’s biggest event for all things mobile lasted for three days from 15-18 February. Apart from developments in applications, new OSs, smartphones debut, alliance formations and much more, the 2010 also event featured two full days of mobile money.

Earlier the mobile money was limited to just a few hours side session, but with the growing global focus on mobile banking, this year it comes bigger.  Paul Leishman from GSMA’s mmublog shares his review of the event.

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Here are the key highlights of the PTA Report for Pakistan telecom industry for fiscal year 2008-09 (July 2008 -  June 2009) issued* on Friday.

Highlights

• Telecom sector revenue grew by 20 percent and generated Rs 327.8 billion as revenue
• Telecom sector paid Rs 112 billion as tax
• Tele-density (percentage of mobile users) of Pakistan stood at 62 percent showing a growth rate of 5.4 percent.
• Foreign Direct Investment (FDI) stood at 815 million dollar
• Total investments in the sector stood at 1.7 billion dollar
• Telecom imports also grew by 20 percent and reached 1.6 billion dollar Read more »

PTA has issued a revised framework for MVNOs in Pakistan. Read the official pdf here or read below for highlights. A Daily times article by Muhammad Yasir says that Pakistan Telecommunication Authority (PTA) has finally set $5 million initial licence fee for Mobile Virtual Network Operator (MVNO) to be valid for the period of 10 years. Would this mean that we may see some new foreign investment in Pakistan telecom?

A MVNO is a mobile operator that does not own its own spectrum and usually does not have its own network infrastructure. Instead, MVNO’s have business arrangements with traditional mobile operators to buy minutes of use (MOU) for sale to their own customers.

While MVNO’s typically do not have their own infrastructure, some leading providers are actually deploying their own Mobile Switching Centers (MSC) and even Service Control Points (SCP) in some cases. Leading MVNO’s deploy their own mobile infrastructure in order to facilitate the means to offer value-added services.

In this way, MNVO’s can treat incumbent infrastructure such as radio equipment as a commodity, while the MVNO offers its own advanced and differentiated services based on exploitation of their own intelligent network infrastructure. The goal of offering value-added services is to differentiate versus the incumbent mobile operator, allowing for customer acquisition and preventing the MVNO from needing to compete on the basis of price alone.

MVNO’s have full control over the SIM card, branding, marketing, billing, and customer care operations. While sometimes offering operational support systems (OSS) and business support systems (BSS) to support the MVNO, the incumbent mobile operators most keep their own OSS/BSS processes and procedures separate and distinct from those of the MVNO.

Cross Post from LIRNE Asia. Written by Rohan Samarajiva on October 24, 2009.

According to the ITU ICTeye, which is now carrying 2008 data, Pakistan’s surge to overtake Sri Lanka has petered out, leaving the Maldives (143 active SIMs/100 people) as the undisputed leader in mobile connectivity (apparently all adult Maldivians carry two active SIMs; there are only two operators in the Maldives), and Sri Lanka second with 52 SIMs per 100 people.

On the fixed side, assisted by CDMA phones that are counted as fixed, Sri Lanka is the leader (17 connection per 100 people), followed by Maldives (15 per 100).

Like in cricket, the middle of the rankings are the most interesting. Both Pakistan (50/100) and Bhutan (37/100) are ahead of India (29/100) in mobile. This shows that India cannot afford to let up the pace of 10 million connections a month for some time. If it does, it might be overtaken by Afghanistan (29/100) and even Bangladesh (28/100).

Of course, the fact that Afghanistan is ahead of Bangladesh in mobile penetration should cause all sorts of palpitations in government offices in Dhaka. Bangladesh was one of the earliest in South Asia to adopt mobile and is the most densely populated country in the world. How they were overtaken by Afghanistan, a war-torn country with difficult terrain, should cause serious re-examination of policies such as the BDT 800 SIM tax. The fact that Afghanistan’s CAGR for 2003-08 is 109%, higher than Bangladesh’s 2003-08 CAGR of 101%, suggests that the gap between the two countries is more likely to increase than decrease.

In the fixed rankings, we find Afghanistan occupying the cellar (0.37/100 people) behind Bangladesh (0.84/100). Pakistan (2.5/100) is behind Nepal (2.8/100). This is very surprising given the apparent superiority of the Pakistan policy and regulatory framework. Both use CDMA on the fixed access side, so that cannot be the explanation. Comments from Pakistani colleagues would be most welcome.

India is the only country showing negative growth in fixed over the 2003-08 period (-2%), but this simply because India is more honest in its reporting, counting CDMA on the mobile side instead of on the fixed side. For example Sri Lanka is experiencing negative growth in wireline, that is masked by CDMA growth.

From 2003 to 2008, the number of active SIMs has increased by over 12 times, while the number of fixed connections has decreased marginally, the negative growth in India wiping out all the gains in the rest of South Asia. South Asia is clearly the territory of the mobile.

It has been another year of mixed results for PTCL but it is clearly getting on a stable track – Rs. 9 billion profit is not bad. Because of its breadth of coverage, it can offer some interesting services – for example see their latest Double Up package, which has been criticized by other ISPs as unfair. It would get really interesting if PTCL came up with a package offer which includes wireless (voice and/or data) as well. Ufone, its mobile phone arm has shown decent performance, though it could have done better.

In summary, anyone looking for a long term investment should consider PTCL.

PTCL’s Double-Up Unlimited Package offers:

• Unlimited On-net calls & 1Mbps broadband connectivity with unlimited downloads for monthly charge of Rs.1,999.
• unlimited on-net calls & 2Mbps broadband connectivity with unlimited downloads for monthly charge ofRs. 2,999.
• unlimited on-net calls & 4 Mbps connectivity with unlimited downloads only for monthly charge of Rs. 5,999.

Unlimited on-net local & NWD calls include PTCL to PTCL and PTCL to Vfone.

Dawn has more on PTCL financial performance.

Pakistan Telecommunication Company Limited announced profit-after-tax amounting to Rs9.151 billion for the year ended June 30, which was in line with many analysts’ expectations.

Earning per share (EPS) stood at Rs. 1.79. The previous year, the telecom had drifted into loss of Rs. 2.825 billion, translating into loss per share of Re0.55.

The board did not announce a final dividend; the company having already paid an interim cash dividend at Rs1.50 per share.

Given substantial cash holdings, some analysts were looking forward to a bit of more with the final accounts.

The revenue of PTCL for the year under review stood at Rs. 59 billion, which represented 11 per cent decline over the revenue of Rs66 billion earned in FY08.

The dwindling of fixed line subscriber base was thought to be the factor in declining revenue, but sector analysts said that increase in international and broad-band revenues might have prevented a greater fall.

Via InformationWeek

Verizon Wireless is planning to light up its Long-Term Evolution (LTE) nationwide network next year in one fell swoop rather than deploying it in a traditional market-by-market rollout, according to Tony Melone, the firm’s senior vice president and chief technology officer.

In the interview, in the wake of his talk on Verizon Wireless’ LTE project this week at the 2009 PCIA Wireless Infrastructure Show, Melone described the move to LTE from Verizon’s existing CDMA EV-DO network as an “overlay” and not a “switchover.” He added that the LTE network is able to use much of the existing infrastructure of the CDMA network including towers and backhaul gear.
Melone also discussed what consumers can expect from the new LTE network. “You will need new devices to take [full] advantage of LTE,” he said. “But there won’t be a need to force migrate” The carrier’s CTO explained that existing Verizon Wireless users will be able to continue to use their current devices and handsets after LTE is commercially launched.

LTE will enable traditional-type handsets and PDAs, but also some non-traditional devices like the IREX Technologies e-book reader, GM’s OnStar auto security solution, and even court-ordered electronic bracelets. Melone noted that Verizon has certified more than 55 devices to operate on its 3G network and they will be available also for use with the LTE network. Most of them are machine-to-machine (M2M) units.

The company, which is jointly owned by Verizon Communications (55%) and Vodafone Group (45%), has launched trial sites in suburban Boston and suburban Seattle. The Verizon LTE Innovation Center in suburban Boston is nearly completed, Melone added.

In his PCIA talk this week, Melone sought to scotch rumors that his firm’s LTE rollout is falling behind schedule. In the interview, he maintained that deployment is on schedule. The firm, however, hasn’t yet given specific dates on its nationwide deployment, but it has pledged it will happen in 2010 in 25 to 30 markets. The company will seek to have the service available for some 100 million POPs (points of presence) in 2010 and continue to deploy the network over the next two and three years.

Melone said Verizon’s Developer Community and its V CAST Apps will launch by the end of the year, enabling developers to take advantage of the launch to bring their own products and services to market.

“We can build all the bells and whistles and make lots of bold claims,” said Melone, “but none of it will matter if the network — and all of the underlying infrastructure that supports the network — isn’t fundamentally reliable. There will be no substitute for good old-fashioned engineering. Reliability built in at the start based on rigid engineering standards and a disciplined approach year-after-year will continue to be our mantra.”

Why did S&P raise ratings for Mobilink, despite the tough economic conditions in Pakistan? Two reasons: reduction in capital expenses and savings resulting from suspension of management fees to Orascom. From Cellular-News.

Mobilink continues to remain exposed to the weak macroeconomic environment, external liquidity position and security situation in Pakistan. However, they expect the recent improvement in macroeconomic environment to result in better operating performance. Also, in the near term, S&P expects Mobilink to face less funding challenges as it is expected to register positive free operating cash flows through significant reduction in capital expenditure and suspension of management fees to Orascom Telecom. Pakistan’s cellular market continues to face intense competition, resulting in lower subscriber numbers and market share for Mobilink. Nevertheless, Mobilink has maintained its No. 1 market share both in terms of subscribers and revenue in Pakistan’s wireless market.

S&P believes parent Orascom Telecom would continue to provide support to Mobilink, if required, considering: (1) the cross-default clause at the parent company in the event of a covenant breach of material subsidiaries, including Mobilink; and (2) Mobilink is the second-largest operation of Orascom Telecom by most financial measures and accounted for 20.6% of the consolidated EBITDA for 2008.

This follows Standard & Poor’s decision to raise the long-term sovereign credit ratings on Pakistan (B-/Stable/C).

Monitoring of voice and data traffic has been a controversial issue in Pakistan because of the cost and effort which will be incurred by the service providers (ISPs, mobile network operators etc). Now PTA has released draft regulations regarding REAL-TIME monitoring of telephony services, with the usual threat of license suspension if a service provider does not comply with the regulation. There should be a debate about whether this is the right approach (see this previous post for background) and concerns over privacy should be addressed.

Monitoring System(s) means a system which includes such equipment and/ or accessories to be installed and deployed for the purpose of monitoring traffic links and also differentiating between type of information streams (voice or data), essential for regulating all telecom landing station licensees and services to be provided by the landing station licensee.

Per PTA regulation, each LDI licensee and Access Providers shall establish the System on its own cost in accordance with these regulations as determined and required by the Authority from time to time at the PTA designated premises.

All landing station and infrastructure licensee(s), shall establish a Monitoring System with its interface to the Authority, on its own cost for the purpose of monitoring of telecommunication traffic (voice and data) within one hundred and twenty days of the notification of these regulations.

I have included an extract of the requirements from the PTA regulation below. I think this will be heavily debated over the coming days.

Any Monitoring system or System deployed shall comprise the mandatory feature of monitoring and controlling grey traffic with the minimum of the following features and shall ensure compatibility to provide such information as required by the Authority, where applicable:
(a) Capability to monitor, control, measure and record traffic in real-time;
(b) Capability for complete signaling record, including but not limited for billing;
(c) Capability to accurately measure the quality of service;
(d) A complete list of the Pakistani customers; and
(e) Complete details of capacity leased by the licensee(s) to their customers.

Further details from the regulation after the break.

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After a long deliberation, PTA has announced promulgation of new regulation, “Protection from Spam, Unsolicited, Fraudulent and Obnoxious Communication Regulations, 2009”, to protect the consumer interests as mandated under the Pakistan Telecommunication (Re-organization) Act 1996. This regulation also include a “Do Not Call” registry. Mobile companies have been asked to inform their customers about this.

The objective of these regulations is to protect telecom consumers from spam, fraudulent, unsolicited and obnoxious communications including calls and SMS. It remains to be seen if this regulation will benefit consumers or will it become one of those laws which remain on paper. Click below to read details in Urdu.