Sep 27 - Oct 3, 2010
"The regulator would like 3G to be ubiquitous and available alln over the country, but that has a cost attached to it which depends on what the operators have to pay in terms of licence fees." Muneer Farooqui, CEO Warid Pakistan
In a market with five operators, Farooqui insists that the one of the main ways Warid differentiates itself from its rivals is through the simplicity of its packages.
Prior to launching its network back in May 2005, the directors of Warid researched the Pakistani market and found that there were "a lot of complex post-paid packages" in the market and it was difficult for end-users to differentiate between them, according to Farooqui.
"Many times there were hidden charges and what you see is not what you actually get, so what we decided upon was quality and simplicity. These are the core values of our organisation," he says.
"Based on that we made it very simple and we developed simple packages and there were no hidden costs. That helped us a lot."
Since entering Pakistan, Warid has worked with network vendor, Ericsson. More recently Warid also started working with Huawei on the radio side of the network, although Ericsson remains its core vendor.
Warid also outsources its networkoperations to Ericsson, and it was thefirst operator to introduce the concept of managed operations to Pakistan. "It has definitely helped us and we have benefited, because we wanted to concentrate on our core business of selling airtime, not running the network," Farooqui says.
Among the high-end users that Waridhas been targeting are corporate andbusiness users. "They are the opinionleaders and decision-makers in this society and so we definitely give due attention for the corporate clients. We have got good corporate clients on board as well. Our credibility has helped us to gain and retain them."
The introduction of mobile numberportability in Pakistan in 2007 alsohelped Warid attract additional post-paid customers. A lack of number portability had been a barrier to post-paid users who wanted to shift to another network, and Farooqui says that Warid won "a good share" of the portability numbers.
While Pakistan's mobile market isdominated by voice services, Farooquisays that Warid's subscribers are becomingmore aware of various mobileapplications and that asignificant proportion ofusers are moving towards GPRS and EDGE data services.
The operator is also introducing a greater range of value added services(VAS) and now offers its customers a choice of about 60 different VAS. The popularity of data services and VAS is evident from the strong customer uptake, with about 9% of Warid's revenues now generated by VAS, according to Farooqui.
"The top earner is SMS followed by GPRS and data services," he says. "Video downloads and ring back tones are very popular here as well."
Farooqui also sees ongoing growth opportunities driven by Pakistan's large youth sector. The company has already launched a special package called Glow, which is aimed at the youth segment.
Indeed, with about 35% of the country under the age of 15, the youth sector looks set to increasingly influence the country's mobile operators.
Applications that bring websites suchas Facebook to mobile devices, video downloads and ring back tones are proving particularly popular among this group, according to Farooqui.
Warid also launched Blackberry services in 2008, and while Farooqui admits the service is "not a huge segment", it has helped the company secure a share in the higher end of the market, he says.
Warid Pakistan benefits significantly from its relationship with its two shareholders, UAE investment vehicle the Abu Dhabi Group and Singaporean telecom giant, SingTel, which bought a 30% stake in Warid Telecom in 2007.
"SingTel is one of the world's biggest operators. With their expertise backing us, we receive a lot of support," Farooqui says.
Eight mobile operations, including Warid Pakistan, operate under SingTel's global umbrella and these operations work closely together to share best practices. The group holds regular director-level forums, allowing the group's CEOs, CTOs, CFOs, and CIOs to meet up and exchange ideas and best practice enabling them to learn from each other's experiences.
Furthermore, as one of the world's largest telecom operators, SingTel also has plenty of experience to pass on to relatively new operations such as Warid.
Farooqui adds that SingTel is also able to help operators in the group gain better prices from vendors and suppliers.
PATH TO 3G
Pakistan's nascent mobile data market looks set to receive further impetus from the government's plan to offer 3G licences. While a precise timeframe has not yet been announced, the regulator has been in discussions about 3G with the mobile operators.
But there are serious concerns among the operators about the possible cost of the licences, particularly in the wake of the recent 3G auction in India, which netted the Indian government about $14.6 billion but left some of the operators with a dubious 3G business proposition.
"The regulator is pretty upbeat about bringing 3G licences to the country," Farooqui says. "We are evaluating this business proposition at the moment, but at the end of the day, everything will boil down to the price tag the regulator puts on the licence for this venture. The licence fee alone could make or break this project.
"We hope that the primary role of the regulator will remain to increase the size of the cake, including the growth of the data or 3G margin," he says. "That would make it a win-win proposition for all of the stakeholders, including customers, operators and the regulator itself, instead of going for any sort of short-term gain that would discourage FDI and investment from the operators."
Farooqui is optimistic about demand for 3G in Pakistan, but insists that operators' interest in deploying the service will hinge around the cost and terms of the licences, as this will ultimately influence the final costs of the service to end-users.
"There is a niche target market for 3G services in the metropolitan areas of Pakistan. People have money in their pockets and are willing to spend. With a zero upfront cost licence fee, operators would love to go for 3G operations.
"The regulator would like 3G to beubiquitous and available all over the country, but that has a cost attached to it which depends on what the operators have to pay in terms of licence fees."
But while Farooqui admits there are concerns about the 3G licences, he also lauds the regulator's achievements to date. His views have been influenced by his experience of running Warid's operation in Bangladesh, where the regulator has a poor reputation for developing the telecommunications sector.
"So far, the PTA has been very conducive. I was part of the Bangladesh operation of Warid for almost four years and I would definitely say that Pakistan is much better off. The initiatives that the regulator has taken in this country have paid-off, while Bangladesh is still facing difficulties because of the strictness on the regulatory side.
He adds that Pakistan has benefited from initiatives such as the deregulation of international gateways and mobile number portability, which helped grow teledensity.
"There are now almost 100 million mobile subscribers in Pakistan, driven by phenomenal growth in the last few years, and it us the operators and regulator that have made it happen," he says.
"The initiatives that the regulator has taken here in this country have paid-off, while Bangladesh is still facing difficulties because of the strictness on the regulatory side." Muneer Farooqui, CEO Warid Pakistan