CELLULAR MOBILE SERVICE INDUSTRY IN FOCUS
TARIQ AHMED SAEEDI (email@example.com)
Dec 08 - 21, 2008
The driving agent behind the phenomenal rise in rate of subscriptions of cellular services to four billion worldwide has presence in the developing markets that in recent years have witnessed stellar growth in wireless modes of communication. To this figure Pakistan's latest share is insignificant however the country is among those markets which are potential target markets for telecom service providers seeking to expand their operations across region that has rapid growing population. Pakistan's cellular sector remains a prioritized option for telecom operators for years who initially concentrated in urban localities to expand their services because of infrastructure availability.
Wireless local loop is considered as a suitable mode to them when they plan to step up in the underserved far flung areas around the country. The reason is simple and that is unavailability of basic network support system needed to mobile coverage. While operators invested in mobile infrastructure in rural areas, penetration ratio of cellular services there is not equivalent to that of urban areas.
Total cellular subscribers base in Pakistan has been emboldened with 89.5 million which is significant-note that it does not imply persons but SIMs one can have in possession maximum 10 at a time-despite decline in subscription over a last couple of months pushed by hike in regulatory duties on mobile phones and different taxes on cellular services. Telecom experts believe that additional levies have greatly dampened the growth of telecom sector in Pakistan as sale is in low-key.
The cellular subscription in July and September, 2008 has witnessed decline year on year. Few telecom stakeholders estimate zero growth in cellular industry during the period of July-October, 2008. While in July 1.3 million new connections were added, in the same month last year 1.8 million started using cellular services of different operators. Similarly, cellular subscription has declined by 69 percent in September year on year. According to Pakistan Telecommunication Authority (PTA) data, by July 2008, Mobilink was leading the market with 32 million subscribers, followed by Ufone with 18.36 million, denting gently behind Telenor that had 18.32 million subscriptions. Al Warid followed the suit by securing 15.77 million. The new entrant from China Zong became able to be recognized in the market soon after its appearance and choice of 4.4 million subscribers.
Despite low reach of cellular services in small villages and distanced areas, it is commonly believed that the market is on maturity stage because of negative growth in subscriptions. However, the trend is for shorter period of time as interconnection circuits and other supportive infrastructure in rural areas will expose cellular operators to overwhelming demands. Pakistan's cellular mobile users are yet to use range of technologies e.g. 3G being in use in developed countries. The cost factor alienating customers of cellular services has to be analyzed in order to make widespread coverage.
Relatively the cost of making calls through cellular phones has increased following the imposition of levies and taxes. A prepaid card for cellular service bears general sales tax not only upon activation but tax also on each call. According to an estimate, government charges in total Rs. 31 on Rs. 100 prepaid card.
REGISTRATION OF SIMS
Law enforcement agencies are worried about the detection of unknown calls and tracing of calls that are hoax-provoking miscommunication-and facilitating criminal activities by making covert conversations among or identities of miscreants. The issue was resolved slightly when PTA ordered all cellular service providers to scramble data of users and ensure issuance of SIMs upon production of computerized identity card. It was easier to say than to be done as there were umpteen of unidentified cellular service users, across Pakistan, who got hold of SIMs from roadside stalls.
Extending dates several times of notice asking CNICs of users, PTA might have been pushed by service providers which could not see impulse drawdown of market share once after suspension of connections by PTA. The authority has claimed recently that 10.5 million cellular connections have been blocked. As disconnection clearly implies minus in sales of services, presumably the act of PTA is softened and circumventing over minor peccadillo committed by roadside sellers of SIMs who still are not seeking identification of buyers.
UNDEFINED LICENSE RESTRICTIONS
Although PTCL has not been effective in landline service provision its subsidiary and second in lead in cellular market Ufone clasps a major share in cellular market and has been exhibiting competition to rivalries in number of specialized mobile services till the dropout of one of its services targeting niche. In Blackberry offers, probably Mobilink was a pioneer and single choice to customers, but after the entry of Ufone in this peculiar segment the Egyptian based company started receiving parted revenues from the market. It, however, again succeeded wriggle out the temporary intervention by substitution after the suspension of Ufone license in Blackberry segment by the PTA.
According to PTA which blocked the operation of Ufone blackberry services the company was into the operation without prior obtaining no-objection-certificate thereto. Many subscribers especially businesspersons suffered due to the sudden service halt either caused by intrepidity of the service provider that dared to embark into the business in absence of license in first place or ignorance of the regulator that knowingly circumvented 'illegitimate' product diversification of a known operator or didn't clarify restricted class in the license agreement. In both cases time and money loses afflicted on users are incorrigible at least for the time being and incomprehensible is the negligence of apex regulator of telecommunication in the country.
Cellular industry in Pakistan has benefits for both telecom operators and subscribers if telecom operation is carried along with the fair market practices.