State of Telecom Industry in Pakistan

I leave it up to you to comment on the achievements mentioned above. I think the previous posts and comments on rising price were clear enough that consumers are not satisfied with the recent direction of telecom sector 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.

The telecom honeymoon in Pakistan which lasted about 5 years (2002-2007) allowed Pakistani consumers to leapfrog over older landline based infrastructure and get cheap and quick access to modern telecommunication technology. The investors, telecom businesses and Pakistani treasury - all made good money and it was a win-win situation. It seems that the golden period for Pakistan telecom is over. The spike in teledensity and corresponding load on the new infrastructure is causing a number of service issues. To add fuel to fire the telecom rates for calls to Pakistan and within Pakistan have started rising, causing a lot of concerns. Consider the following points (follow links for details) from the last few months:

• Rise in local call charges by PTCL
• Calls to Pakistan made more expensive
• PTCL forces Pakistan package on its customers
• Deceptive advertisements by Mobile Companies
• Customer service calls are not free any more
• Telecom consumer protection laws still in draft

Some people hold the view that given the tremendous progress made, complaining about telecom situation in Pakistan is not justified. Yes, there have been great advances made but if we do not fix the structural issues early on, we will lose much of that progress. Left unchecked we may even regress to a point where there’s plenty of competition but consumers end up without the services they deserve at a fair price. Broadband is an appropriate example … Pakistani public has been tormented with poor service and caps on the usage. 

I believe that with the right regulatory measures, consumer protection laws and a code of ethics we can keep the telecom sector on the right track. 

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.

We (bloggers, consumers, industry experts) are usually quick to criticize organizations such as PTA. Main reason is that these organizations have a lot of authority and their decisions have significant impact on consumer’s pockets and industry’s profit margins. They face a lot of challenges and have to make difficult decisions. Consider the presentation “Telecom Policy Evolution“, by Mudassar Hussain of MOITT, at the TeleCON 2008 event. It acknowledges that convergence (IP, telecom + media) has significantly changed the landscape and policy makers need to address these changes. The time to do that is the upcoming 5 year policy review cycle which starts in July 2008. It is an important time for the policy makers to look back and assess their performance and to define objectives on which to base their new policies. And with a new government in place there will be additional twists. Excerpt:

Synergies between different regulatory areas should be developed:
• Telecom contributing with infrastructure and access issues
• Broadcasting with access and content issues
• IT with privacy and security, access to PCs, etc.
• Policies to supplement each other and work in cohesion even
if not converged

Objectives of Policy:

Policy has to be well thought out keeping in mind local market
objectives to be achieved: Consultation and partnership of all
key industry stakeholders is crucial.

Industry concerns of protection of investment have to be duly
addressed with full industry participation by both the policy
makers and the regulators.

Strength of the markets has to be ensured by dynamic and
timely actions of the Govt. in direct partnership and consultation
with industry and consumer community stakeholders.

Inputs of all stakeholders present in the forum are welcome on
all areas of format, scope and outlook as well as specific issue
related proposals.

For full presentation click below.
Telecom Policy Evolution - Muddasir Husain

Guest Post From Umar Farooq

Telecom Infrastructure Sharing is an important concept in emerging telecommunication markets. Here’s an extract from a GSM World report

Commercial considerations, rather than regulatory mandates, appear to be driving the increasing trend for Mobile Operators to adopt a variety of infrastructure models. Examples of mobile network sharing can be found in both mature and developing markets, with 3G providing an added impetus to assess the commercial and regulatory viability of network sharing. Network sharing may take many forms, ranging from passive sharing of cell sites and masts to sharing of radio access networks (RANs) and other active elements such as network roaming and the core.

In Pakistan, this concept’s utilization has taken place. However, we still have to see an effective regulation from PTA on this one (Editor’s note: See this link on PTA website for consultation paper on Infrastructure sharing - the pdf is also available here). We have seen different operators having their towers erected on the same roof top and at times within feet from each other on ground. Why couldn’t they use the same tower to place their antennas and share the cost ?

Infrastructure sharing has been taking place where Telenor did strike a lease deal with Wateen Telecom to use their Fibre capacity for their core transmission ring. But here, Wateen established the Fibre to sell its capacity to telecom operators. Infrastructure of RAN or Core Transmission has still some grounds to cover, before telecom operators in Pakistan become mature enough to operate shared structures while reducing operations costs.

The element of operator maturity is key here, because infrastructure sharing, does reduce costs if it is operated efficiently. If not operated efficiently, additional operational costs plus the reduced QOS loss, makes it useless for an operator.

From an end-user’s point of view, you see less number of towers and operators competing on their services rather than coverage.

First Global TeleCON conference was held in Karachi Sheraton on April 29-30. The organizer’s website has full agenda details and the summary is provided below. The organizers, Shamrock Conferences, deserve credit for sharing the agenda and making the presentations available online. The impressive thing about this conference was that there were many senior level speakers representing all stakeholders (industry, government, academia, consumers) in Pakistan telecom. The discussion was organized along the following tracks:

• Policy & Regulatory Framework
• Connectivity & Mobility
• Putting Customers First
• Converging Technology & Infrastructure into Business
• Preparing Today for Tomorrow
• Role Playing in Telecom Industry

I browsed through a few presentations and found the presentations on policy issues, consumer protection and challenges for emerging markets to be educational and interesting. In the coming days I’ll write more about them. There were of course some other talks (for example by PTA and mobile companies) which fell in the category of self-promotion. I wonder if this conference was a mere networking event or was there some other purpose to it?

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

The tariff table below is taken from the annual telecommunications report by PTA. Well, PTCL has already made this out-of-date with their change in lcoal call duration, down from 5 minutes to 2 minutes. Any other corrections needed here?

The draft of the Consumer Protection Regulations 2008 states the rights of consumers, among other items. Many industry watchdogs have observed instances where these rights are in violation (for instance, see the warning issued to PTCL). What are the consequences for telecommunication companies if they don’t comply with these regulations?

Are the consequences so minor that telecom companies can shrug it off and keep doing the same thing? It needs to be significant enough that it provide motivation for compliance for telecom companies.

There’s one thing PTA can improve easily and it will make a big difference. The Consumer Alerts page on PTA web site is not good enough. It does not have archives of past alerts, is maintained on adhoc basis, is not user friendly and is probably not easy to find. If that was not enough the url keeps changing! It was www.pta.gov.pk/calerts.htm a while ago and now it is www.pta.gov.pk/Ref.htm.

Please make it easy to access the alerts from your home page, make it a part of your content management system and ask PTCL to provide a link to these alerts from their website.

Excerpt Of Consumer Rights From the Proposed Consumer Protection Regulation

• to have clear and easy-to-understand descriptions of the services for which they are paying.
• to know exact costs for all services prior to purchase, clearly expressed in local currency, without the confusion of moving, scrolling or otherwise difficult-to-read text;
• to know in advance of any price changes, associated terms including service contracts and the governing provisions of licensed telecommunication services;

As I have written before the consumer protection regulation is a good start but we need to see it implemented soon. And while we are on the topic, can you fix the 0800-55055 number for complaints?

This is bad news for Pakistanis abroad: they will pay considerably more for calling Pakistan starting May 1. See the news item from Dawn. It seems to me that we are regressing in terms of policy making. Who benefits from this? PTA and long distance operators. What about consumers? Well, a lot of consumers and industry experts are upset and are taking various actions such as expressing their concerns through various offline and online channels (see this petition). One thing is certain: the grey telephony market will flourish because of this. Expect more noise around this in the coming days. I am not looking forward to my next bill for international calls!

Salman Ansari (former CEO of Paktel) has posted interesting predictions at various online forums. Here’s an excerpt:

Quality of calls of inbound calls specially from the US will become terrible (cellular terminations) as most inbound terminations will come in via low cost grey market – biggest culprits will be the biggest carriers (AT&T, Bell Canada, etc).

Wasim Baig summarized his views about this change at TGP:

Pros:
1. LDIs get a higher rate, higher margin
2. APC contribution increases
3. Origination increases
4. Balance of trade in PK’s favor

Cons:
1. Grey market increases
2. LDI may increase origination rates as well
3. Yet more regulation! PTA stays relevant to pricing ..
4. Market pricing takes a back seat

Here’s more from Dawn article.

“The PTA, in fact, has addressed the demand of local operators, who have been pleading for increase in such rates, as it would not affect the local consumers of the facility,” said the source. “But it would naturally increase the cost of calling to Pakistan from outside”.

Read more »

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.