CELLULAR POPULATION HITS 17 MILLION MARK

This shows fastest growth of telecom sector in Pakistan as compared to other regional countries

 From KHALID BUTT, Lahore
Oct 10 - 16, 2005

Surprising the policy makers, the mobile phone customer base in Pakistan has rapidly expanded to 17 million by September, against the anticipated projection of 15 million by December this year.

In June 2003, the mobile phones totaled 5.02 million, which raised to 12 million by June 2004 and further increased to 17 million by September this year.

This showed the fastest growth of telecom sector in Pakistan when compared to the performance of telecom sectors in the regional countries.

Chairman Pakistan Telecommunication Authority Shahzada Alam Malik disclosed this in a brief talk here recently. The chief telecom regulator arrived in the city along with his team to participate in the Telecom Forum, organised in Lahore to share latest developments and to discuss future of this sector.

Keeping in view the current pace of mobile phones expansion, Chairman PTA said that this year the actual network of mobile phones in Pakistan is expected to cross 20 million by December.

He said that a tough competition, cut in tariffs and availability of a wide range of affordable mobile phones had paved way for an unprecedented and unprojected growth in this sector.

Chairman PTA further said that foreign investment in telecom sector is expected to grow to one billion dollars a year. In last one year, he said, telecom has become the largest foreign investment earning sector and future investment by the existing and new companies is set to give boost to this sector, generating employment and streamlining economic cycle in the country.

Mr Malik pointed out that Telenor's share in cell phones network has reached 1.2 million while the customer-base of Warid has rapidly expanded to 1.5 million.

He, however, said that Mobilink and Ufone still are the top two mobile phone operators in the country.

To a question about Number Portability System, PTA Chairman said that a joint body of the cell phone companies, led by Telenor's head in Pakistan, is actively working on this plan.

He said that all the companies have agreed to introduce Number Portability Scheme which could be in place next year. He said that the deadline of introducing this facility by November this year would be missed, but next year it will be in place and Pakkistan will be the first country in the region to offer this facility that would enable the cell phone customers to shift to any company with the same number, although the code of the company would change.

He said that this facility would be a check and balance for the cell phone service providers in the country. If a company does not improve its service, its customers would shift to any other company without change in their mobile phone numbers, he added.

To a question about delay in PTCL take-over by Etisalat, Chairman PTA said that the privatisation was the subject of the Privatisation Commission and the PTA was only a regulator. He said that the PC should explain to general public the actual situation regarding delay in the PTCL take-over.

He said that second survey result shows further improvement in the quality of service being provided by Mobilink and Ufone, who were issued notices by PTA a few months ago.

He said that the cell phone service providers are facing a very tough competition and they themselves are under pressure to further improve their service with the aim to satisfy their customers and to capture more share in the market.

He also disclosed that seeing a boom in telecom sector, the city and district authorities in the country have incorporated multiple increase in fee for the installation of towers which has been proving an additional burden on the telecom operators.

BACKGROUND

Cellular mobile services in Pakistan were commenced in 1990s. currently there are four mobile operators working in the sector - Paktel, Instaphone, Mobilink and Ufone.

Keeping in view the ever-increasing demand for mobile phones the government decided to award two more cellular licenses in 2003. The first ever cellular mobile Policy was announced by the government on 28th January, 2004. Under the policy PTA issued two cellular licences to foreign based companies, Telenor of Norway and Warid Telecom of UAE, @ US$ 291 million each in open, fair and transparent auction on 14th July, 2004.

HISTORY OF CELLULAR SUBSCRIBERS

YEAR

TOTAL

1996

68,038

1997

135,027

1998

196,096

1999

265,614

2000

306,493

2001

742,606

2002

1,698,536

2003

2,404,400

Above table provides total number of cellular subscribers per year since 1996. The sector is growing at an astounding rate as in 2002 total number of subscribers was 1 million and in just two years it has crossed 6 million mark. This unprecedented growth can be attributed to series of events that have taken place during the year. This includes award of licence to two new mobile companies thus creating competitive environment for existing operators. These operators have started acquiring market share as much as possible by bringing down the prices of new connections to zero. Similarly, PTA initiative to reduce activation tax from Rs 2000/ to Rs. 1000/- on new mobile connection has also played an important role in increasing the subscriber base as the benefit was completely transferred to the consumers.

VALUE ADDED SERVICES

PTA gives licences for operation of Value Added Services. Value added services include NVCNS, ISP, CPP, VTS. BAS, VMS, ATS, DRPS and S&FF

This sector has been deregulating since 1998 and today competition exists in each service market. However, CPP and ISP are two services which have the maximum number of licensees.

A lot of investment by Private sector and incentive by PTA has helped these services to grow. Today total number of card payphone PCOs have reached 184, 669.

Technology is changing rapidly and innovations are giving new faces to old businesses, therefore, investment in value-added services is highly desired.