SWIFT CHANGE TO VOCAL FROM RETICENCE
SHAMSUL GHANI (firstname.lastname@example.org)
Mar 03 - 09, 2008
During the last five years or so, the Pakistan has been transformed to an expressive herd of people busy in communicating over a cell phone regarding either one's personal affairs or the "government's failure" to tackle the urban/rural problems affecting the quality of life in the locality. They could have skipped a whole hearted lunch for the lack of money but seem quiet content with the possession of that cellular toy that diverts their attention from the mundane issue of food. They highly prize the joy of being able to talk their heart out to someone in the outskirts by blaming the country's haves for the misery of the have-nots. Even a part time house maid in a posh bungalow is now equipped with that magic connector to inform his hubby when they will be together for a lunch. Such is the velocity and magnitude of cellular revolution. Without going into the details of some misconceived economic policies of the era, one can readily give credit for the low-cost connectivity option made available to every individual of the society to afford him the luxury of being close to his dear ones. This is no mean achievement. A nation able to talk is surely able to walk.
THE HISTORY OF PATHOS
Not in the too distant past, the monopoly giant Pakistan Telecommunication Corporation (PTCL) used to control, from the high seat of authority, a business or a household's ability to have access to a landline. It was an open bid auction; the highest bid got the nod. A telephone connection had become a status symbol.
After independence, the British Post, telegraph and telephone department with a meager base of 7,000 telephone lines, was handed over to Pakistan. With the tag of monopoly, the company operated on the basis of century-old equipment and technology. It was not before 1995 when internet made its revolutionary debut on the global telecom scene that PTCL's unbridled authority was cut to size. The tele-engineers at PTCL found it hard to believe that data could be transmitted over a telephone line! The Pakistan Telecommunication Ordinance 1994 had provided a legal framework for active participation of the private sector companies that nudged PTCL out of its decades-long slumber by advising to introduce voice mail and email services. It was then that PTCL organized for its engineers overseas training programs to get them acquainted with the ways of revolutionary technology and get the feel of state of the art equipment. The competition with the private sector companies taught PTCL the hard way how to survive in the market without the crutches of monopoly and bureaucracy.
The following comparative table gives a view of country's telecom base in 1998 and the pace and quantum of growth during the next five years.
Telephones in service
Fiber Optic cable length
The five year progress appears quite pathetic when compared to the changes that took place on the telecom scene during the next five years that is from April 2003 to February 2008.
THE STORY OF CELLULAR REVOLUTION
The cellular industry in Pakistan has grown at an astronomical pace erecting a base of 77 million cell phone users. Taking into account the number of more-than-one-Sim-users, the actual number of individual cell phone users comes to 50 to 55 million. During the last two years, the average per-month addition to the number of subscribers has been in the range of astounding two million. The cellular tele density of 47% has been the main contributor to the overall tele density of 51%. The magic wand of competition has brought down the tariff to the affordability level of each and every individual. The still raging competition holds yet more promises of quality improvement and tariff cuts.
Efforts to increase the tele density by outreaching un-served and remote areas are underway through public and private sector participation programs. A recently created fund USF with the collaboration of the Ministry of IT and mobile phone companies which will contribute 1.5 per cent of their revenue will undertake infrastructure build-up and network expansion activities to extend telecom services to another 600,000 people of the un-served remote areas.
THE MAIN MARKET PLAYERS
Mobilink, based at Egypt, is the leading market player with 30 million subscribers. It has already invested in the industry a whopping $2.5 billion with plans for further investment. It has a 6,500 Km of optic fiber backbone with further expansion plans for another 2,000 Km. Mobilink's revenue of $597 million as of June 2007 account for 24% of the overall group revenue.
Ufone, a 100% subsidiary of PTCL (Etisalat Group Company) and having the advantage of access to their parent company's countrywide infrastructure backbone enjoys the second position in the market after Mobilink. Ufone, having a customer base of 16 million has already spent dollar one billion in network expansion with plans to invest another $150 million this year. Ufone contributed 20% to PTCL group revenue during 2007 as against 14% in 2006. PTCL has further expansion plans aimed at providing high speed cellular mobile and wireless data services based on EDGE technology. A 10 year infrastructure sharing agreement between Ufone and Telenor will result in cost savings.
Telenor, based at Norway has more than doubled its customer base during the period November 2006 to November 2007. With a customer base of 15 million, Telenor has already spent $1.8 billion. Having introduced high speed EDGE services, the company has plans to expand further. Telenor Pak has contributed 4% to the overall group revenue of $13 billion.
Warid Telecom, having a customer base of 14 million, has already invested $1.2 billion in Pakistan since 2005 and has plans to expand further. Backed by one of the largest group in Middle East, the Abu Dhabi group, the company is also operational in Bangladesh with plans to enter Uganda and Congo markets.
China Mobile (CM Pak), formed through acquisition of 89% shares of Paktel for $460 million, is the new entrant making its presence felt in the Pakistan telecom market. Presently having a base of 2 million subscribers, the company aims to have a market share of 20 to 25 per cent by the middle of next year. CM Pak plans to invest another $800 million during 2008. While the other market players cautiously study the impact of CM Pak's entry, the subscribers foresee another bout of competition bringing fresh incentives to them.