TELECOM INDUSTRY IN BALOCHISTAN
Mar 03 - 09, 2008
Balochistan still lacks the sound telecommunication infrastructure and remains a potential telecom market after the deregulation of telecom industry. The province is yet to fully enjoy the fruits of deregulation, which has brought scores of new private entrants to provide service in Pakistan. The deregulation of telecom industry is fast gaining momentum with dozens of more communication companies and millions of customers entering both the fixed-line and mobile telephone markets. The sector is currently contributing 2 percent in GDP directly and indirect contribution in other sectors of the economy takes this share to about 5 percent.
Pakistan is taking lead in Asian economies in terms of telecommunication penetration.
According to an estimate, cellular subscriptions have presently shot up to 71.5 million making Pakistan one of the fastest-growing cellular markets with a cellular mobile density of 44.51 percent. Total revenues of telecom sector in 2006-07 reached Rs 236 billion whereas total investment was $4,108 million. Telecom companies have invested over $8 billion during the last four years in Pakistan particularly the mobile sector investment share of which accounts for 73 percent. In 2006-07, cellular mobile sector has invested over $2.7 billion, which becomes about 66 percent of total investment by the sector.
During the year 2006, the tele-density has increased in Balochistan from 5.6 percent to 10.47 percent, showing a growth of almost 87 per cent. According to an estimate, 4.5 million people out of a population of around 7.5 million have access to either mobile or wireless or fixed line networks. 30 Tehsils out of total 58 are covered with telecom services in the province. While Mobile sector has significantly contributed to the growth of tele-density, the Wireless Local Loop (WLL) operators are also expanding their networks in the province.
Balochistan has immense potential for development of telecom market and its geo-strategic location in the region is also an attraction for the foreign investors and telecom firms. Less affordability and non-availability of electricity are the main impediments for development of telecom in the province. Other obstacles are its geography and demography indicating a difficult terrain and scattered population.
Today, law and order has become a major problem in the province. It provides a risky environment to implement any business plan or economic activity. The incidents of bomb blasts, attacks on public installations and target killings have become a routine. The prevailing security situation in the province is enough to discourage the foreign firms to start their operations.
Pakistan Telecommunication Company Limited (PTCL) covers 39 cities in Balochistan with a population of more than 1.5 million. The PTCL has laid Optical Fibre from Quetta to Chaman. Similarly, it has also completed the project of laying down Optical Fibre from Loralai to Dera Ghazi Khan. It is also committed to provision of 18,552 lines on copper and WLL services in far-flung areas of the province, placing of 2.5G system in Quetta, Optical Fibre Access Network at Quetta and Hub with 13,000 and 1000 lines respectively.
PAYPHONES & ISPS
Since 2003, the payphones have been on the rise in Balochistan. According to an estimate, the province has a total of 11,367 payphones which include both fixed and wireless payphones. Similarly, there are at least seven Internet Service Providers (ISPs), which are providing Internet/Broadband services in the province. There are more than 150 locations, which have internet access in the province. Launched in 2005, the DSL services are also being provided by many ISPs in the province.
Geographically, Balochistan has a difficult terrain, scattered population and vast areas. Hence, expansion of Wireless Local Loop (WLL) network services is deemed cost effective in the province. WLL services have expanded in the province at a higher rate as compared to other services. Presently, out of all four WLL operators in the country, two have presence in Balochistan. WLL subscribers in the province have increased from a total of 435 in 2004 to more than 46,617 by last year. Total WLL density in the province is 0.60 per cent which was almost negligible in 2004.
Telecard Limited launched its Go CDMA WLL telephone service in Balochistan in 2005. In the first phase, GO CDMA telephone service was provided in Quetta, Hub, Sibbi, Usta Mohammad, Dera Jamali and many other small towns. However, in the second phase, it has been planned that the WLL network would be extended to Chaman, Zhob, Turbat and Gwadar.
The former government had taken certain initiatives to enhance the telecom access as well as tele-density in the province. For instance, it had reduced the annual regulatory fee of WLL licensees operating in the province from 0.5 per cent to 0.1 per cent for three years initially and 0.5 per cent to 0.25 per cent in subsequent two years. Annual Spectrum Fee for WLL was also reduced to 10 per cent of the actual fee applicable under the license.
The government should take Balochistan's telecom future seriously and announce a special telecom policy for the rapid growth of this industry in the province. It should also take steps to improve the security environment in tribal areas of the province, so that private firms could expand their operations in these areas.
The level of development in telecommunication is generally measured through tele-density; hence the Pakistan Telecommunication Authority (PTA) should take steps to enhance tele-density in the province.
Steps should be taken to establish community-based tele-centers across Balochistan, where telecom facilities will be shared instead of having dedicated facilities.
A telecom forum should be arranged as a calendar activity by the PTA to provide a platform for promoting interaction among telecom consumers, private sector and telecom regulator for telecom development and for devising a strategic approach for development of telecom services in the province.
The incoming government should work for creating a peaceful and business-friendly environment in the province. The investments in telecom sector can only be attracted if the province presents a stable political scene. The incoming government should make efforts for bringing a political reconciliation in the province and improving the law and order situation, which is essential for luring the foreign investors.