PAKISTAN EMERGING DESTINATION FOR IT ENABLED SERVICES
IT INDUSTRY GROWING AT 50% ANNUALLY
FROM: SHAMIM RIZVI
Mar 03 - 09, 2008
The IT Industry of Pakistan has developed into an impressive industry during the last 5 years showing a fantastic growth of almost 50 per cent per annum. This has resulted in motiving both the local and foreign business to secure their place in the growing Pakistan market.
According to an update prepared by the Ministry, the IT industry of Pakistan presents tremendous growth and investment opportunities. The competitive advantage in Pakistan is the most compelling of any country and includes a large pool of English speaking technical talent, quality certified technology companies, and a highly supportive government. Of 1,082 active IT companies in Pakistan, some 110 are certified International Standards Organization (ISO) ˝ one of the highest numbers in the world. Scores of the companies are also undergoing CMMi appraisal with the assistance of government programs.
The Government of Pakistan has allowed 100% equity ownership and 100% repatriation of profits to foreign investors. Major tax incentives such as tax exemption for companies have been allowed till 2016. Annual growth of IT exports has averaged 50% over the last four years, displaying a five fold increase. IT exports totaled $1.4 billion in fiscal 2006-07, including sales to multinational companies, earnings of overseas official of Pakistani companies, and salaries of non-immigrant IT workers abroad. Total IT industry size stands at $2.8 billion including software services, products, IT enabled services and hardware. At current rates of growth, it is expected that industry size will surpass $11 billion by 2011.
Pakistan is emerging as a location of choice for the outsourced software development and IT enabled services such as call centers and medical transcription. Several multinational have located development and support centers here while others outsource work to Pakistani companies.
Pakistan has an edge over the neighboring global giants in terms of its thriving Business Process Outsourcing (BPO) industry. The ready availability of skilled professionals, an appropriate IT infrastructure, and affordable rates for connectivity result in considerable time and cost savings for entrepreneurs. The costs in Pakistan are as much as 30 per cent lower than India while the infrastructure advantages of high speed connectivity in all the major cities are available at competitive rates. There is a rapid movement of connectivity towards broadband services which are taking precedence in homes and business. Efforts to network the country continue, and so far over 1,800 towns and cities have been plugged into the Internet backbone.
GROWTH OF TELECOMMUNICATION
The Pakistani industry's major growth area is that of telecommunication, with an increase in cellular network operators over the last year, as well as the doubling of subscribers over the course of a single year. One of the most progressive policy changes came with the deregulation of fixed-line telecommunications body, PTCL, formally bringing the incumbent operator's monopoly to an end and setting the stage for the opening up of the sector to major investors.
Amongst the various companies in Pakistan in this field Telenor has been the fastest growing during the last 2 years. President and Chief Executive Officer of Telenor in Pakistan Tore Johnsen in an interview on a TV channel claimed that in a short span of less than 3 years and in the face of intense competition, Telenor Pakistan today stands as the 2nd largest mobile communications network with 15 million Pakistan over 5,000 sites and is fast expanding. In addition, Telenor Pakistan won the firs USF project and is working tirelessly at providing connectivity to the yet unconnected Malakand division. Telenor Pakistan will continuously expand its network to address the needs for mobile communication for the urban and rural population in Pakistan. Regarding Telenor investment in Pakistan, he said Telenor Pakistan is the fastest growing network in Pakistan and has been growing its subscriber base at a record rate. As we intend to connect the unconnected in the remotest corners of Pakistan with valuable services, we understand the need for constant investments in the network, capacity, and services. By the end of 2007, we had already invested some USD 1.8 billion in Pakistan.
We have also signed major investment contracts for network expansion and maintenance within the last 15 months. We extended our frame agreements with Nokia and Siemens on network expansion and services until 2009. The agreements, with a potential to result in 750 million USD worth of orders from Telenor Pakistan, are some of the largest of their kind in the industry. Also, we sealed a 20-year capacity and services contract with Telecom Malaysia Berhad's (TM) Pakistani subsidiary, Multinet Pakistan (Private) Limited. (Multinet). The contract has enabled us to utilize fiber optic cable pairs and associated co-location facilities along Multinet Pakistan's national long haul optical fiber transmission network (Project Ittehad). The maintenance and associated services from Multinet will further improve the reliability of our services to our growing customer base. The aggregate amount of both the capacity contract and the service contract is some USD40 million. Telenor is committed to serve the population of Pakistan with relevant communication services and as such we will still rollout substantial parts of PakistanÝs non-covered areas.
He said Government's progressive policies have boosted market liberalization process and discouraged monopolies. There are three main areas of policy emphasis that will help with responsible growth in the future. We understand the government's ambition of introducing 3G in the market, but growth and investment in the basic mobile infrastructure should not be sacrificed or slowed down. There are far too many people still without basic access to mobile telephony. Right now operators are focused on investing in far flung areas and un-served population, which need connectivity for basic services, to improve their productivity and to reach out. We ask the government to consider 3G not as a licensing opportunity and not to levy hefty upfront fee. PTA and FAB should also make additional UMTS spectrum available in order to have equitable spectrum allocation. Telenor feels that our proposed "beauty contest" approach as adopted by many countries including Malaysia and Norway is much better than open auction, which has resulted in financial problems and major delays in rollout after 3G auctions in Europe. Also, through this way operators will be able to provision of mobile services to those who are still unconnected and remain a priority.
The internationally recommended practice of using one tower to carry antennas for multiple mobile operators instead of having separate towers for each operator just makes common sense. At the moment, Telenor Pakistan has the largest number of shared sites. As a socially responsible company, we believe that more should be done to encourage and enforce infrastructure sharing. It is an effective way of reducing operational expenditure while achieving long-term environmental benefits and maintaining quality for our customers.
Replying to a question about telecom sector growth in the next 5 years Telenor chief said Pakistan is one of the fastest growing telecom markets in the world. The growth numbers have been remarkable. According to PTA, the current size of the Pakistan telecom market is 77 million subscribers, 48% teledensity with an annual growth rate of 100% over the fiscal year 2006-2007. The contribution of Telecom FDI is placed at 35% of the total FDI and the telecom sector is reported to make up 2% of the GDP. Regarding regulator environment in Pakistan said we appreciate the presence of a stable regulatory environment with a clear licensing framework in Pakistan, MOITT and PTA have been successful in providing a level playing field and have fostered a culture of industry consultation.
China mobile is the latest entrant in the telecom sector in Pakistan. China mobile which is ranked as one of the leading world player entered Pakistani market in 2007 with an initial investment of $500 million. It is planning to invest another one billion dollar during 2008.
P & G ROLLS OUT FIVE VARIANTS OF HEAD & SHOULD
Unveiling the new Head & Shoulders, Country Manager P&G Pakistan, Qaisar Shareef said, "Throughout its 46-year history, Head & Shoulders has been striving to introduce new and improved products that help eliminate dandruff; giving consumers a healthy scalp with beautiful strong hair. In Pakistan, the new Head & Shoulders range of 5 different variants offers outstanding dandruff defense, resulting in a scalp in excellent condition and beautiful hair."
Head & Shoulders, the world's number 1 anti-dandruff shampoo, unveiled a stunning new look amidst a spectacular fireworks display. This was followed by the Up Close and Confident show; showcasing everyday life's spotlight moments in which one needs the confidence to be at their very best. The show was directed by leading choreographer Juni who fashioned a creative blend of freedom and confidence.
Brand Manager Head & Shoulders at P&G Pakistan, Saqib Zia commented, "In order to help restore the confidence of our consumers, Head & Shoulders scientists have focused their research to better understand their needs and how best to provide a product for an unhealthy scalp. The result is a new range of Head & Shoulders, boosted with the Active ZPT system."
"In our everyday life we encounter a numerous spotlight moments where we need the confidence to get close to others. With the new Head & Shoulders range, we offer our consumers the chance to get 100% dandruff free hair, thus giving them 100% confidence to get close to others", said Assistant Brand Manager Head & Shoulders at P&G Pakistan, Saba Malik while highlighting the consumer benefits of the new collection.
Head & Shoulders works with a panel of leading experts including scientists, dermatologists, beauticians and stylists who really understand what individuals needs to stand out, both on the outside as well as on the inside. With their advice, P&G has been able to bring to its consumers, the world's No. 1 shampoo.
"With the 5 variants in the Head & Shoulders range in Pakistan, consumers are sure to find the right anti-dandruff shampoo. I personally use and recommend Head & Shoulders to patients who come to me with dandruff and other related scalp problems", said Prof. Syed Atif Hasnain Kazmi, leading dermatologist, member of Pakistan Association of Dermatology (PAD) and General Secretary of South Asian Regional Association of Dermatologists (SARAD) at the Head & Shoulders "Up Close and Confident" launch event.
In addition to Prof. Kazmi, this exciting event was witnessed by a host of senior dermatologists including Dr. Badr Dhanani and Dr. Seema Hirji, alongwith H&S consumers and members of the media fraternity.