Aug 9 - 15, 20

Despite uncertain security situation, high inflation, and decline in purchasing power of people particularly of salaried class, the country's telecom sector performed well during the years 2008 and 2009.

During this period, the overall teledensity surged to 63.5 percent while a total Foreign Direct Investment (FDI) was recorded at $2.253 billion.

The country's telecom sector has been growing at a rapid pace where growth rates have become the hallmark. Although a bit slower growth of only seven percent was observed in mobile sector last year, this trend cannot be attributed only to saturation as there are factors like international financial crisis, devaluation of rupee, security situation and re-registration of SIM programme.

According to statistics made available to Pakistan and Gulf Economist (Page), the telecom sector received $1.438 billion in year 2008 and $815 million in the year 2009 as FDI in different projects of the ministry of information technology and its attached departments.

Statistics show that the total internet users of the country rose to 19 million with total broadband users rising to 413,809 million. Total direct and indirect jobs in the telecom sector are 1.36 million.

During the last two years, the total phone lines increased from 94.695 million to 103.801 million with mobile lines increasing from 88.019 million to 97.58 million, almost 59.6 percent upward slide, while the fixed lines declined from 4.416 million to 3.526 million, almost 2.2 percent downward slide.

It may be noted that the present government had taken various initiatives to further strengthen the country's telecom sector. Under policy directives of the government, class regime for value-added is going to be introduced besides the introduction of policy framework for launching mobile banking solutions.

It was also decided to redefine framework for deployment of cellular jammers. Checking of anti-competitive behaviour of the incumbent with respect to availability of network resources and co-location service for the new Land Line (LL) operators.

Experts told Page that Pakistan's telecommunication sector was growing faster, even more rapidly than that of India with over 63 percent teledensity, encouraging the foreign direct investment.

According to them, India is lagging far behind Pakistan with 37 percent teledensity as compared to 63.5 percent in Pakistan. Pakistan's FDI policy is more liberal than that of India to attract more investment in Pakistan's telecom sector.

They stated that the ever-growing teledensity of Pakistan is unleashing new vistas of opportunities to the foreign and local investors for better returns, especially in the field of data services. "Services like mobile internet, mobile banking, and Internet Protocol Television (IPTV) hold fortunes for any wise investor," they opined.

They further said that Pakistan is still a lucrative market and according to forecasts, the mobile subscribers in Pakistan would hit 100-million mark by 2011.

National Telecommunication Corporation (NTC), Special Communications Organisation (SCO), Universal Service Fund Company (USF Co), National ICT R&D Fund Company (R&D Fund Co), Telephone Industries of Pakistan (TIP), Pakistan Telecom Employees Trust (PTET), and Telecom Foundation (TF) are the attached departments of the Ministry of IT&T.

The NTC generated revenue of Rs4885.01 million during the past two years - Rs2,317.23 million in 2008 and Rs2,567.78 million in 2009. Total expenditure of the NTC remained Rs3738.59 million during two years with Rs1,739.28 million and Rs1999.31 million in years 2008 and 2009 respectively. Rs 779.25 million was total profit of the company after tax paying.

Under the NTC, 13,235 new landline connections were installed with network resource optimised with 100 percent efficiency using traffic analysis tool. UAN service was introduced in year 2009 besides installation of Centralised Network Management System for new switches. The NTC generated Rs442 million revenue from its available resources - Rs 207 million in year 2008 and Rs 235 million in year 2009. Operational expenses were reduced from Rs104.9 million to Rs6.48 million. Another Rs20 million were saved in the operational cost of copper access network.

NTC spent Rs66.43 million during the last two years out of which Rs33 million were used for coastal fibre project, Rs11.33 million for hosting of GoP Portal and Government Websites launching abroad, and Rs22.10 million for establishment of 20 video conferencing terminals at 18 important sites for government of Pakistan .

On the other hand, Pakistan Telecommunication Authority is also focusing on research in the field. In this regard, PTA has signed a Memorandum of Understanding (MoU) with National University of Science and Technology (NUST) to enhance mutual cooperation for research in the relevant field and to promote mutually beneficial relations between the two organisations.

Under the MoU, both the PTA and NUST would collaborate with each other. PTA would allow the academia to share research in the field of telecom, for its appropriate utilisation by the regulator and other organisations. Main objectives of the collaboration are to support research activities and to equip the future leadership with theoretical training as well as practical experience in policy and regulatory issues of telecom sector.

A spokesperson of PTA said that PTA would provide telecom information and expertise to NUST; reciprocally NUST would encourage its students to undertake research in different areas of telecom sector. Under the MoU, PTA would also help NUST in identification of research areas while NUST would cooperate with PTA on different issues related to trade, business, and economy. The research on forthcoming regulatory issues, challenges, and transfer of new technologies to local sector is likely to assist the regulator and the policy makers, he said.