THE FAST EXPANDING IT & TELECOM SECTOR

IS THE GROWTH SUSTAINABLE?

SHAMSUL GHANI
Dec 10 - 16, 2007

TELECOM SECTOR

As in India, the fast pace telecom sector is making its mark on a smaller economy like Pakistan. India has presently 200 million mobile phone users with a potential to move to 500 spot within a period of five years. Pakistan has a 60 million base of cell phone subscribers in addition to over 6 million land lines. Cell phone market in Pakistan has increased almost 14 fold since 2000. Communication sector (along with transport and storage) has contributed 29.3 per cent to the GDP for the year 2006-07. Pakistan was bestowed with the prestigious Government Leadership Award of GSM Associates in 2006. During 2006-07, Pakistan was estimated to attract $2 billion Foreign Direct Investment to the most attractive telecom sector out of the total FDI estimate of $6 billion. Pakistan is now said to be on the verge of a telecom revolution.

Top mobile phone operators in the country are Mobilink, Ufone, Telenor, Warid, Instaphone and China Mobile (Previously Paktel). The domestic users have benefited by a fierce competition among the top players A call to USA now costs as little as Rs.2 per minute. Popular cell phone brands are, Nokia, Sony Ericsson, Motorola, Samsung and LG. Recently the local market has been flooded with the low cost Chinese versions of these brands. The Nokia bosses have taken it to the court of law. Nevertheless, the local users are making hay while the sun shines on Chinese marketers. The situation allows them a viable option to reduce their risk in the face of ever increasing mobile snatching cases.

The government has plans to restrict itself to the areas of control, regulation, taxation and incentives. The private sector will be allowed to enhance its role in the development of this all important sector of economy. The task before the private sector shall be to seek expansion of broadband connectivity, increase the tele-density, explore possibility of co- operation with other countries and make concerted efforts to bring network development to the remote and neglected rural areas.

The telecom sector faces a number of challenges requiring immediate attention of both public and private sectors. As against the quantitative growth, the qualitative aspect of progress has left much to be desired. Even in India, where there is a "gold rush" situation for telecom licensing, the latest demand is for 2G (second generation) services while 3G services are still a far cry. The situation in our country is still worse. The job before the government and the private sector is quite huge They are to act in concert to take care of the following problems :

1. To achieve a high tele-density rate.

2. To expand the network to rural areas.

3. To improve on service standards.

4. To establish data ware houses and international call centers.

5. To ensure network security

6. To set up facilities to manufacture indigenous telecom equipment and cell phones.

IT SECTOR

In comparison to India, our Information Technology market is quite small yet it is growing at a reasonably fast rate. This sector brought in export cash inflows of $73 million in 2006-07 as against an export cash inflow of $48.5 million in the previous year. The target for the next fiscal year is $108 million. Also in store is an ambitious plan to increase the software export to$ 5 billion by 2010-11

In 2005, Pakistan had more than 20 million internet users with a potential of 50 million mobile internet users. Almost every government department, organization and institution is having its own website. Use of search engines, instant messaging and chatting is on the rise. Wireless local loop and landline telephony sector has also been given incentives with the result that the tele density rate has gone up from 3 per cent to 10 per cent within 2 years.

The IT industry in general and the software services in particular have a tremendous potential to grow and to generate high remuneration jobs for IT professionals. The growth rate of world IT industry is 8 per cent with a forecast to have a size of $900 billion by 2010. To survive in the fast pace growth scenario, we will have to remain competitive by developing human resources in line with the international standards and by swiftly switching over to the changing technologies.

In pursuance of the national IT policy, the government has launched programs to create IT awareness especially among the people of smaller cities and towns. It has also provided incentives in the shape of reduced computer costs as well as services user cost. The productivity of the sector, nevertheless remains low in the face of insufficient investment in software. Pakistan Software Export Board (PSEB) has announced various incentives for the IT industry which include access to the venture capital, strengthening of equity base and promoting of entrepreneurial culture of international quality. Out of 1082 IT companies, only two are listed on the stock exchange. PSEB has offered 75 per cent reduction in the consultancy fee for those IT companies who plan to go for an Initial Public Offering (IPO) to be eligible for stock exchange listing.

HOW TO SUSTAIN THE GROWTH IN THE HEAT OF GLOBALIZATION

The globalization agenda has taken the world economies by storm. This agenda carries in its fold both opportunities and threats. It aims at free flow of capital, goods and services, human resources and creative ideas. Every economy, particularly the developing economy shall have to go through a rigorous SWOT analysis which means analyzing its Strengths, Weaknesses, Opportunities and Threats. Our textile sector miserably failed to undertake this exercise seriously. Our government(s) too did not realize the gravity of the issue and resorted to policies of window dressing. The result is that the sector finds it difficult to survive under the WTO regime.

In case of IT and telecom sector too, we face similar threats and need to take some radical measures to remain competitive. In this situation, our strength is our human resource and our weakness is education. This industry has little room for unskilled and uneducated labor. It thrives on intellectual and creative minds. Its professionals are its blood line. The only way out is to raise our literacy rate on a war footing. The spending on social sector, particularly education shall have to be increased many fold to produce good quality stuff to be subsequently absorbed by this industry. India is a bigger market and has a far better literacy rate than we have. The result is that companies like AT&T are lining up there to obtain operating licenses.

There are 40,000 Multi National Companies operating globally and producing mountains of goods and services. Out of these 500 MNCs cater to the 30 per cent world requirement of goods and services. These MNCs by virtue of their size and the controlling influence they have over the world markets, have become dictatorial in nature and never lose an opportunity to tighten their stranglehold around lesser nations. Now, we have to decide. We can either develop ourselves to be viewed by others as a respectable competitor or end up as an easy prey to the global sharks.

RAZR2 V8 LUXURY EDITION, "STUNNING BLEND OF CUTTING-EDGE TECHNOLOGY

Motorola, Inc. (NYSE:MOT)has recently announced a special edition of the new RAZR2. The signature RAZR2 form factor has been re-imagined and reconfigured in the most luxurious materials - bathed in gold and clothed in snake-like skin, and includes a full suite of features and accessories for conscious consumers seeking a glamorous design.

The special edition of the RAZR2, an ultra-slim design which measures at 12.05 mm gone "lux" with 18k and 24k gold plated accents standing out against a luminous, black slate, vacuum metal finish. Decadent details, such as elegant pin stripes on the CLI lens, an engraved diamond-cut pattern on the sideband and a linear etching on the navigation wheel add to the edgy, yet chic, finishes of the device. it features a large, 2.0", interactive, color external screen to read and respond texts and manage music with touch sensitive music keys that give a vibrational response all without opening the flip.

"RAZR2 Luxury Edition is an ultra-slim and eye-catching mobile device. It maximizes the music experience bringing together fashion and music hand in hand. The glamorous designed, soft-touch back, embossed with a snakeskin effect RAZR2 Luxury Edition even feels Luxurious to those who want fashion and technology together,"said Bahjat Mirza, Director Sales, M.East & Pakistan, mobile Devices, Motorola.

The RAZR2 special edition also includes a full suite of in-demand features, including Crystal TalkTM technology, quad-band technology, a full HTML browser 1, and a 2.0 megapixel camera with 8X digital zoom, video capture and playback to catch every glamorous moment in high-resolution. With up to 2GB of on-board storage for up to 1,000 songs, a powerhouse processor for fast over-the-air downloads and Windows Media Player 11, enabling access to over 200 online music stores, including favorites such as MTV Urge, Yahoo and Napster 1, this special edition of the RAZR2 Lux maximizes the music experience.