State of Telecom Industry in Pakistan

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The 3RD Global Telecommunication Congress 2010 (TeleCON 2010) with a special emphasis on “Taking Pakistan to the Next Level of Technology Frontiers” is being organized on April 24 at the Pearl Continental Hotel-Lahore by SHAMROCK Conferences International. This high profiled forum is held annually, under the patronage of the Pakistan Telecommunication Authority (PTA).

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We have covered the positive role played by telecom industry to help genuine causes of the social and civil society. The land slide which occurred in a remote area of Hunza recently caused damage and the lcoation of the incident made it difficult to provide relief and rescue effort through normal land. Telenor stepped in quick and contributed Rs. 2 million in an effort to augment government’s efforts for those impacted by  land-sliding in Attabad, Hunza. Telenor Pakistan’s Chief Strategy Officer & VP Corporate Affairs, Aamir Ibrahim presented the cheque to the Federal Minister for Information & Broadcasting and Governor of Gilgit-Baltistan, Qamar Zaman Kaira.

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We wish all stake holders of the Pakistan Telecom Industry a Very Happy New Year. At the beginning of December 2009 we started a poll about Your Favorite Cellular Operator – 2009 and with the end of 2009, the poll has closed.

We are here with the results of the poll where readers had to choose their favorite out of the five. From a total of 1060 votes Ufone stands out the most favorite and Warid being the second favorite with a difference of  just 1%.

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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 »

Entrepreneurship looks so glamorous and noble when you are about to start on that great idea. With all the excitement of creating something big, failure is not something that a lot of entrepreneurs want to think about. If you are a typical entrepreneur you make a lifestyle choice: you  live from hand to mouth, spend all/most of your savings, work hard for many years and sacrifice your relationships with friends and family.  So what is an entrepreneur supposed to do when all of that effort ends up as being a grand failure? Well, if you are Jawwad Farid, you write a book about the lesson learned AND start another venture.

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The recent MIT Conference on Corporate Innovation Entrepreneurship was an excellent proof that entrepreneurship activities in Pakistan continue to thrive. There are a number of dedicated and talented people who have taken the initiative and shown that given the right people and processes, an ecosystem of entrepreneurs can be nurtured.

Read Jawwad Farid’s latest blog post and see the pictures of this impressive event. Congratulations and Kudos to the MIT CEF BAP 2009 team for their work.

Over the last few years I have seen a tremendous rise in interest in entrepreneurship. Surprisingly, a large number of early stage entrepreneurs keep making expensive mistakes which are completely avoidable. One of the reason for such mistakes is the lack of access to seasoned entrepreneurs who can be a source of learning. I previously wrote about the startup guide written by Naeem Zafar. That guide laid out the necessary steps one needs before starting a new venture (you can get a free copy of the book by signing up at Startup-Advisor.com). As a followup to that, Naeem has recently published an eBook called The Definitive Entrepreneur’s Guide to Lawyers.

As any experienced business person and entrepreneur can tell, legal matters are extremely important. It so happens that law firms can be intimidating to many and legal matters also tend to be costly. Naeem’s book helps entrepreneurs to get educated about the whole process and to get the maximun value out of your legal spending. The book provides many little-known facts, secrets, techniques, and tricks which can make life easy for a startup team.

Some of the important points Naeem touches upon include:

• The different things lawyers can (and cannot) help you accomplish.
• The inner workings of a law firm, and how to use that knowledge to lower your legal bills.
• Choosing the right lawyer for you.
• When you should first contact a lawyer.
• Why you might want to choose a large law firm over a small one—or vice versa.
• When you may need to create a legal entity (incorporation), and what options you have.
• How to leave your current employer in a way that causes minimum trouble later.
• How to protect your ideas.

Naeem stresses the need to educate yourself and to start a relationship with attorney, even if you don’t hire them right away. This is what I have done and I can tell you that it is a very good strategy to get started. As you go along you educate yourself through books, online resources and from others. Then when you are ready and you need help with a particular legal document, you know what to do and where to go. So do your home work and read this book.

PTCL senior management, controlled by UAE based Etisalat, has been playing a careful game with its employees and union workers since privatisation. It has gone through voluntary separations, change in policies, lay offs etc. Recently there were protest by PTCL employee union and PTCL responded to that by providing some carrots to the employees, which were covered in a press conference. In the press conference senior HR executives talked about profitability of PTCL, pay increase, foreign nationals working for PTCL and the relationship with union workers. The News reports:

PTCL’s Senior Executive Vice President of Human Resource Syed Mazhar Hussain said that foreign nationals working for the improvement of the PTCL are from the UAE, Sri Lanka and the Sudan. However, some of them belonged to Pakistan as they were working with Etisalat for last several years, he added. He was accompanied by Executive Vice President of Communication and Corporate Ali Qadir Gilani.

Answering a query, he said that the Board of Directors of PTCL approved 20 per cent raise in the basic salary for grade 1 to 16 employees while 15 per cent raise was granted to officers. He said that the PTCL also granted bonus with minimum provision of Rs7,500 before Eid in order to give relief to employees.

When he was asked about delays in paying installments by the Etisalat in shape of privatization of the PTCL to the government of Pakistan, he said that this question should be asked by the Privatization Commission, and PTCL management had nothing to say anything on this issue.

Answering a query about reduced profits of the PTCL after privatization, he said that although the profits reduced, but the market analysis showed that the call rate stood at Rs48 per minute from Lahore to Karachi which now nosedived to 60 paisas, resulting into scaling down of profits.

But he claimed that the profit earned by the PTCL was much more than the collective earning of 60 to 70 players of the telecom sector, including the cellular companies.

He clarified that the PTCL management did not strike any deal with the protesting employees as they were trying to get “political mileage” for the upcoming referendum, which is going to take place after Eidul Fitr.

He said that the PTCL management had taken decision not to bow down before any effort to get blackmailed from any anyone. To another query, he said the PTCL gave its consent in the court for granting bail to those who were arrested by the police when these protestors tried to block network operation system as well as data centre where the bill software was installed.

Wateen Telecom is a sister concern of Warid Telecom and a fully owned venture of Abu Dhabi Group. Wateen, with the collaboration of Motorola, deployed nation-wide WiMAX network in Pakistan and pioneered its deployment globally (actually this was the very first post on this blog in 2006). I remember attending the ITCN in August 2007 when it was launched with a zeal of making Broadband a reality and promising exceptional quality over WiMAX.  Now, after two years, it is rather sad that Wateen has laid off around 550 employees.

What went wrong with Wateen that it had to let go of around 50% of its employees?

Few of my friends had an opportunity to do internship at the RAN Department of Wateen. When they joined on day 1, they were handed a some vendor manuals to study. At the end of the day I called them up to ask how did their day go? They told me that Wateen has more people than work. I said that you can’t decide this in just one day.

Now with this 50% slash in number of employees the picture is clear, they did have more employees than needed. This could be because they hired more manpower during the initial network roll-out. Now what they have on their lists is some upgradation and O&M of the current network. The O&M is outsourced to the vendor and upgrades generally requires less manpower . So the ‘more manpower’ was just not needed.

I leave here for the reader to decide. Did this happen because of the global recession or mismanagement by Wateen’s senior management?

As discussed earlier of a possible acquisition of Telenor Pakistan by China Mobile Pakistan (CMPak) possibly to let Telenor get a green signal to enter the India.

The lastest news is that India is set to grant Telenor the necessary security clearance to increase its stake in Unitech Wireless to the legal maximum of 74% – but only on the condition that no employees from Telenor’s Pakistan subsidiary work for the Indian company.

The Economic Times newspaper notes that the Foreign Investment Promotion Board (FIPB) was due to approve the investment, but delayed its decision pending a review of the security situation. Keeping the human assets of the Indian and Pakistani arms of Telenor separate is expected to take care of risks such as spying and subversion. The plan is reported to require that any Telenor employee who is, or has ever worked in Pakistan will be blocked from working in India.

At one end the leadership of India are on talk tables to increase trade and grow relations with Pakistan, whereas at the same time imposing ban on employees who is or has ever worked in Telenor Pakistan to work in India.

With this ban Telenor Pakistan’s CEO, Jon Eddy Abdullah, a non Pakistani and other foreigners associated with Telenor Pakistan will also not be allowed to work in India.

Telenor is also a majority shareholder in Bangladesh’s Grameenphone, but this was not considered to be such a significant security risk.

Newsweek ran a story about how Huawei is good with engineering and keeping its prices low but has challenges with branding. See excerpts below. Is that the case with Huawei in Pakistan as well?

[Huawei] has built its success the old-fashioned Chinese way—by selling to other businesses, rather than directly to consumers around the world, and by competing on price rather than on innovation. Its founder and CEO, Ren Zhengfei, is the anti–Steve Jobs—he has never given an interview to the foreign press. Huawei Internet routers and cell-phone switches (with names like Quidway-S9300 Series Terabit Routing Switch and GSM/UMTS Home Location Register 9820) are used by many of the world’s biggest telecom carriers, including the likes of Vodafone, providing phone service to more than 1 billion people worldwide.

The article talks about how Chinese companies, many of them technical, handle branding. Huawei has to face scrutiny due to its ties with the Chinese government. Its a double edge sword as they have benefited from that relationship as well.

Chinese approach brands—as a fact or skill set to acquire, not an art to master. Wen’s speeches on the issue, and new Beijing loan programs to address it, reflect this thinking. So do the efforts of local governments in cities like Dongguan, a major export hub that still focuses mainly on assembling products for Western brands. Officials here admit that local firms have little or no brand savvy, and they are pouring in money to fill the gaps. Using part of a $20 billion stimulus package from Beijing, they are subsidizing companies that set up R&D centers, train staff in marketing, and register trademarks.

The state connections of all big Chinese companies still raise red flags among customers. Huawei dropped a joint $2.2 billion bid for American telecom equipment maker 3Com last year after U.S. lawmakers called the deal a threat to national security. It withdrew an earlier bid for Marconi, a landmark British electronics and information-technology firm, after Conservative Party leaders called for an investigation of whether China’s government could use Huawei ties to Marconi to spy on the British defense industry.

Huawei executives say accusations that China could use their equipment to steal sensitive data are ludicrous. But, as every good marketer knows, perceptions matter. If Huawei wants only to cultivate a few hundred elite industry buyers, perhaps it can explain itself to them directly. But if China hopes to build dominant names in the global consumer market, it needs a very different role model. One that has some interest in becoming a famous name.