Strong Growth Forecast For Pakistan's Media and Telecom Sectors

[Riaz Haq]

Pakistan's media and telecom revolution that began during the Musharaf years is continuing unabated.

According to Daily Times, Chairman Mushtaq Malik of the Pakistan Electronic Media Regulatory Authority (PEMRA) has said that the cable television sector “is the fast growing segment among the electronic media ventures”. In the first 100 days of the current government, he has claimed that new licenses for 16 satellite TV channels, 10 FM radio stations, and 232 cable TV channels have been granted. It is anticipated that this would lead to additional investment worth Rs. 2.5 billion, generating 4000 additional jobs in this sector. The cable television sector alone is employing some 30,000 people in the country.

APP reported that overall size of Information and Communication Technology (ICT) industry in Pakistan has crossed more than $ 12 billion, of which $ 1 billion is foreign direct investment (FDI). This was asserted by the Adviser to Pakistani Prime Minister on Information Technology Sardar Latif Khan Khosa while speaking at the inauguration of 5th Information & Communications Technology Exhibition and Conference - CONNECT 2010 at Karachi Expo Center.

He said Pakistan has one of the fastest growing the tele-density in the world, currently at 63.5 percent, while neighboring India is just 37 percent.

Khosa said there are more than 95 million mobile connections in the country and are still growing in numbers. This is exponential growth as mobile telephone market has seen a 14-fold increase since the year 2000, he added.

A pilot program in Pakistan has demonstrated the effectiveness of pushing mass literacy through the use of cell phone text messaging capability. The five-month experiment, initiated by United Nations Educational, Scientific and Cultural Organization (UNESCO), targeted 250 females aged 15 to 24 years old in three districts of Pakistan's Punjab province. In this pilot project which successfully concluded last month, the participant who have just completed the basic literacy course, were given a mobile phone each. They received three text messages a day in the local language. They were required to practice reading and writing the messages in their work book and reply to their teachers by text.

Here's a recent IEMR research report forecasting 135 million mobile phone subscribers in Pakistan by 2014:

"The wireless penetration rate is still low in Pakistan at approximately 60% in 2009, and we expect that the country's wireless market will continue to show strong growth. Our model forecasts that total mobile subscribers in Pakistan will increase from 96 million in 2009 to 134.8 million in 2014," said Nizar Assanie, Vice President (Research) at IEMR. "Mobilink will continue to be the largest player in Pakistan's mobile operator space over the next five years. We expect that Mobilink will have 36 million mobile subscribers in 2014. Also, given the latest quarter numbers, our model predicts that Ufone will have 25.8 million, Telenor will have 29 million, and Warid will have 25.3 million mobile subscribers by the end of 2014." "ARPU levels remain low in Pakistan's mobile operator space. We expect that the industry average ARPU will remain in the range of US$ 2 - US$ 3 over the next five years. Our model predicts that, in 2014, Mobilink's monthly ARPU will be at highest among operators at US$ 2.64. The operator with the lowest monthly ARPU will be Warid Telecom with US$ 1.67 in 2014," said Mr. Assanie.

IEMR's Pakistan Mobile Operator Forecast covers up to 50 financial and operational metrics on wireless operators in Pakistan - Mobilink (Pakistan Mobile Communications Limited), Ufone GSM, China Mobile Ltd. (Zong, formerly Paktel), Instaphone, Telenor ASA, and Warid Telecom International. Notable highlights of the 1Q10 Pakistan Mobile Operator Forecast include: * In terms of shares of total subscribers, we expect that Mobilink's market share will decline over the next five years, from 30% in 2009 to 26.7% in 2014. On the other hand, we expect China Mobile Pakistan's market share to increase from 8% in 2009 to 13.7% in 2014. We also forecast that market shares at Ufone, Telenor, and Warid will be approximately 19.2%, 21.6% and 18.8% respectively in 2014.

* Given the excellent performance by Norway's Telenor in Pakistan's wireless market in the recent past, our model forecasts that its EBITDA margin (calculated as EBITDA / reported revenue) will be increasing from about 23% in 2009 to 35% in 2014. On the other hand, we think that Mobilink will maintain its EBITDA margin of approximately 35% over the forecast period, 2010 - 2014.

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State of Telecom Industry in Pakistan

[Riaz Haq]

Here's Silicon Republic report on the future expansion of mobile telecom:

Emerging markets will be the key source of future mobile communications growth with 1.6bn new connections coming from around the world, out of which 61pc of these will come from Asia.

At the Mobile World Congress in Barcelona, Nokia CEO Stephen Elop said that bringing the next 1bn users online will be a major disruptive force for the industry. He unveiled the new Nokia 105 device, the first full colour device with internet and email connectivity that will cost less than US$15.

Elop said: “We believe that the next 1bn people are very young and very ambitious. For the very first time they are able to afford their own mobile phone, it is not a device they have to share with their family or the village. It’s their own.”

Manoj Kohli, the CEO of India-headquartered Bharti Airtel, the third largest mobile operator in the world with 261m subscribers in 20 countries, said that for every 10pc increase in broadband penetration in a developing country there is a 1pc increase in GDP.

He said there is a need for mobile devices that cost less than US$30 and mobile broadband dongles that cost less than US$10.

At the Mobile World Congress browser creator Mozilla revealed its Firefox OS that will be included on devices from LG, Huawei, Alcatel and ZTE to bring affordable smartphones into the hands of consumers in developing markets. Operators from America Movil, China Unicom, Deutsche Telekom, Etilisat, Hutchison Three, KDDI, KT, MegaFon, Qtel, SingTel, Smart, Sprint, Telecom Italia, Telefónica, Telenor, TMN and VimpelCom have undertaken to carry smartphone devices from the various mobile manufacturers who have committed to the new Firefox OS.

According to the GSMA, there are 3.4bn people on the planet today connected by mobile devices and this will grow to 3.9bn by 2017.

4G LTE will account for one in five connections in the world versus one out of every 25 in 2012.

The GSMA estimates that the industry is expected to spend US$1.1trn on capex in the next five years and will add 1.3m jobs around the world. The mobile industry’s contribution to global GDP between 2013 and 2017 as a result of its investment is expected to add up to US$10.5trn
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“Ovum forecasts that emerging markets will be the key source of future mobile connections growth, particularly in Africa and Asia-Pacific. Between 2012 and 2017, Ovum expects that there will be 1.6bn new mobile connections across the world, with 61pc of these coming from Asia-Pacific.

“While connections growth in Asia-Pacific will begin to slow towards the end of our forecast period, the region’s 4.4bn connections in 2017 will make it the greatest contributor to global connections. Growth in the Asia-Pacific region will largely be driven by the big three emerging markets of China, India, and Indonesia, which will have 3bn connections between them in 2017.

“While Asia-Pacific will generate the most new connections, Africa will be the fastest-growing region. African mobile connections will grow at a compound annual growth rate of 6.5pc between 2012 and 2017, increasing from 683m in 2012 to 935m in 2017.

“While connections growth is important, the biggest issue for emerging market operators will continue to be around revenue growth and how to remain profitable with a customer base of low-ARPU users.

“Both Nokia and Airtel’s CEOs talked about the need for cheaper devices. The strategies of operators in Vietnam, India, Pakistan, and Tanzania demonstrate how telcos can operate in markets where ARPU is below US$3 per month.

“While the correlation between high ARPU and profitability is not absolute, operators still need to take action to improve the amount of revenue that they make from each connection. This is of paramount importance to operators in markets where ARPU will be less than US$5 per month in 2017,” Pawsey said.

http://www.siliconrepublic.com/comms/item/31667-next-1bn-users-cent...

[Riaz Haq]

Here's a report about free Wikipedia access for Mobilink's pre-paid customers:

Mobilink has launched Wikipedia Zero with the aim of providing its customers with free access to the world’s largest general reference database. The source will be available for Mobilink’s prepaid customers who will have free access round the clock to the full mobile version of Wikipedia. Mobilink customers will also be able to view these articles in Urdu on supported handsets.
Farid Ahmad, Vice President Marketing Mobilink commenting on the launch of Wikipedia Zero said, “As Pakistan’s leading mobile internet provider we are proud to partner with the world’s sixth largest website to offer our customers free access to Wikipedia.
We hope that our customers will enjoy browsing through Wikipedia on Pakistan’s fastest mobile data network.’’
The service is available for all new and existing prepaid customers free of cost by accessing Wikipedia at m.wikipedia.org OR zero.wikipedia.org from either their native mobile browser or through Opera Mini.

http://www.nation.com.pk/pakistan-news-newspaper-daily-english-onli...

[Riaz Haq]

Here's a Techinasia report on Telenor's planned investment in Pakistan:

Norwegian telecom group Telenor will invest $1.7 billion in Pakistan after acquiring a 3G spectrum, reports Propakistani. The massive investment, announced by Telenor CEO Jon Fredrik Baksaas at a recent meeting with members of the Pakistan media, should have a large impact on the country; Baksass predicts that it will increase internet penetration and, by extension, the country’s GDP.

This new investment should be a boon especially for rural people who may not have internet access, as $700 million of it is apparently earmarked for spreading 3G networks across the country. Baksaas reportedly said that he expects this rollout to have a greater impact on rural residents than urban residents.

This is not Telenor’s first foray into Pakistan, the company has already invested more than $2 billion there. That shouldn’t come as a large surprise given that the company is one of Pakistan’s largest telecom operators, with more than 30 million subscribers in the country

http://www.techinasia.com/telenor-invest-1-billion-pakistan-3g/

[Riaz Haq]

Here's an ET report on growing ICT use in Pakistan:

Pakistan has crossed a historical milestone. Elections were held on time, and for the first time in its 66-year history, a democratically elected government completed its term and handed over power to a new one. At the same time, the elections recorded a voter turnout unprecedented in recent years.
Much of this renewed political interest has been driven by Pakistan’s telecommunications revolution. Over 50 million voters verified their polling stations through their mobile phones and the elections were tweeted, blogged, and plastered across Facebook. In fact, the way I see it, the elections presented a major victory not only for Pakistan, but also placed a massive feather in the collective caps of telecom companies.

The Information Communication Technology (ICT) industry in Pakistan has registered a prolific boom in the last few years. With affordable pricing and 122 million connections showing mobile penetration at an all-time high, Pakistanis are amongst the highest SMS users in the world – the average Pakistani sends up to 178 text messages in a month.
And recent months have seen the launch of mobile financial services by various players, with transactions worth Rs3.76 billion via online banking already taken place.
Internet and broadband penetration is at a similar peak. According to World Bank statistics, by July 2012, Pakistan internet users showed a double-digit growth in the past five years and the Internet Service Providers Association of Pakistan (Ispak) estimates that internet users have reached 25 million thanks to broadband and mobile phone operators.
Moreover, thanks to large organisations such as PTCL and Wateen Telecom, over 250 towns and cities across the country are now connected through an extensive fibre optic network.
Universal Services Fund
The government also intends to use approximately $700 million available with the Universal Services Fund (USF) to further develop the infrastructure and network that has already been put in place. The USF’s aim to “improve the working of the Universal Services Fund (USF) and utilise its resources to bridge the rural-urban digital divide and establish WiFi hotspots” is certainly a welcome one.
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Smart grids
The auction of licences itself will give an impetus to the economy and provide the government with FDI. However, the regulatory body will need to rely on more than just consumer uptake in order to achieve the scale necessary for sustaining growth. This means formulating policies that encourage the uptake of data services by vertical industries, for example solutions for smart grids.
Indeed, smart grids should be a top priority for the new government – not only will they enable growth and scalability within the ICT sector, they will also provide significant value for the power and energy sectors.
Currently, there are several pilot projects under way using cellular technology, however, according to industry leaders, cellular solutions for smart grids are not scalable.
Moreover, utility companies require constant data streams on their networks for telemetry, oscillography, usage and meta-data. Data usage is rapidly increasing and demand is likely to increase once 3G services are introduced.
Telecom operators, on whom electricity distribution companies currently rely, will likely be in a challenging position in the next few years as demand on their networks grows for ambient video and other data-heavy services.

http://tribune.com.pk/story/570485/the-future-of-ict-in-pakistan/

[Riaz Haq]

Brief history and prospects of Pakistani cinema published in Dawn newspaper

Pakistan's cinematic journey from Dawn.com on Vimeo.

http://dawn.com/in-depth/film-special

[Riaz Haq]

Even #Afghanistan has 3G. #Pakistan the only country in South Asia without 3G. Sad commentary on Pak "democracy" http://qz.com/142923

[Riaz Haq]

India has 4G wireless service in a handful of cities, Afghanistan has 3G nationwide, Bangladesh is rolling out a nationwide 3G network, and even Nepal has 3G in major cities. That leaves Pakistan as the only country in South Asia without a high-speed mobile network. The country’s notoriously activist supreme court is trying to force the government into holding the spectrum auction needed to launch 3G services in early 2014—but the country’s equally notorious bureaucracy looks likely to delay things.
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Pakistan, with a population of 180 million and 125 million mobile subscriptions, has come close to holding the spectrum auction several times over the last five years. Each time proceedings have been delayed on a technicality.
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Warn-torn Afghanistan managed to avoid such a quagmire by simply not holding an auction—it simply distributed spectrum licenses to the providers. The government argued that the economic boost from acquiring 3G was more valuable than the one-off windfall from an auction that could become marred in controversy.
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Bangladesh gave a 3G license to the state-owned mobile provider, Teletalk, in 2012, and held an auction for the other mobile operators in September 2013. BTRC, Bangladesh’s telecom regulator, has been applauded for not allowing the government’s fiscal concerns to hijack the agenda and set the reserve price for the auction too high—the mistake made in India.
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But the Pakistan Telecoms Authority (PTA), the regulator, has been without a chief since the last time a spectrum auction was scheduled, in 2012. Plans came to a halt when the PTA said the telecoms operators and other interested bidders had failed to submit an expression of interest in time. The mobile operators, who have been long dogged by fickle government policies and strong competition, said they were never invited to bid.
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The then-chairman of the PTA lost his job over the incident. His nominated successor was challenged by the opposition parties last October, and the two other members of PTA’s committee retired at the start of this year, effectively leaving the telecoms industry in a state of anarchy. Now a public-interest case currently in the supreme court has pushed the government into some semblance of action. It finally appointed an acting chairman and new PTA members early last month to oversee the auction, and set a February 2014 deadline for holding it.
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However, more delays are possible. The government has now put out an advertisement for an international consultant to help with the auction. Case lawyer Ali Raza says that’s an unnecessary delaying tactic; he argues that everything is ready to go, and that the auction needs to happen quickly to avoid special interests marring the process. The next likely stumbling block is where the money from the auction will actually go. The finance ministry wants it to flow directly into the exchequer—a windfall that was somewhat prematurely written into the 2013-14 budget, announced in June. However, by law the money is meant to go to a universal service fund, set up as part of the 1996 telecoms policy (pdf) to make sure remote areas of Pakistan get telecoms service. The wrangle over that could occupy the courts for a good while.

http://qz.com/142923/pakistan-might-remain-the-only-country-in-sout...

[Riaz Haq]

Here's a story on a Pakistani journalist in small town America:

The workday was done, and I gave Malik a ride to his hotel. Before he disappeared through the doors of the Embassy Suites, he smiled and asked me to wait. He had something for me.

He returned from his room and presented me with a sleeveless jacket and wool cap -- the kind commonly worn by men in Pakistan, his homeland, where he would soon be returning after three weeks in Charleston and the Gazette newsroom.

Yaqoob Malik is a reporter -- an investigative reporter, as he will proudly tell you -- at an English-language paper called Dawn in the Attock area of Pakistan.

Earlier this year, he and several hundred other Pakistani reporters applied to the International Center for Journalists, which was arranging a State Department-funded trip to the U.S. and a chance to work with and observe an American newspaper.

Only 20 of the applicants made the cut. It was literally the opportunity of a lifetime for Malik (as he prefers to be called).

But while the other journalists drew assignments at big newspapers in New York, Miami and so on, he was being sent to Charleston, a place none of them had heard of, and the smallest town on the list.

This drew some good-natured ribbing from a few of the others and left Malik a bit crestfallen.

But, as Malik describes it, when he landed among the hilltops at Yeager Airport, each sporting its showy autumnal best, he knew that he would have the last laugh.

And while many of the larger newspapers brought their visitors along slowly, in true Gazette fashion, we threw Malik right into the fray. He published a story in the first few days of his visit, before any of the others, and from there, he was off to the races.

"I only have (fill in the blank) days left here," he would tell me the minute he finished each story and asked for another. "I want to do as much as I can."

Malik covered local Muslim issues, focused on people in our area of Pakistani descent and wrote columns about the political situation in his homeland.

His command of English and the written word were certainly better than my Urdu, but his stories, as you might guess, needed a good deal of editing and explanation in order to bring the West Virginia audience up to speed on his topics.

As I worked with him on the stories, so began my Pakistani education.

Malik was supposed to be here learning from me and the others at the Gazette, but it soon became clear that my schooling on Pakistan, its people and the obstacles facing its reporters was just as thorough, if not greater, than what he took away.

On a recent weekend morning, as I stood in my kitchen drinking a cup of coffee, I heard my phone chirp. It was an email from Malik. He had sent me the story he had filed for Dawn that day.

It was full of protests and beatings, anger and death. Reading it from the serene safety of West Virginia, I quickly realized that my new friend was in a spot neither serene, nor safe.

Pakistani journalists risk their lives to tell the truth. Government and police protections are nearly non-existent. Kidnappings and assaults of journalists are rampant.

Malik shrugs off the fact that his home was ransacked a few years ago.

"Sometimes, my children will ask, 'Why, Papa, do you have write that?'" he said, but he soldiers on, performing a service absolutely crucial to the advancement of his country.

While he was here, Malik would often marvel at how beautiful Charleston is, how friendly its people are, how calm life is here. For him, it was the perfect place to carry out his American assignment, and it likely won't be the last time he sees the West Virginia hills, if he has his way.

He plans to bring his wife and children for a visit to Charleston next summer.

So, until then, stay safe, my friend.

http://www.wvgazette.com/Opinion/201312290031

[Riaz Haq]

Here's a PakistanToday report on mobile telecom growth in Pakistan:

The voice and SMS ratio per subscriber per month has also notably improved as average cellular mobile subscriber in Pakistan,is making voice calls of 203 minutes per month whereas, generating 214 SMS.

An incredible growth of 43.97% in voice traffic average per user has been witnessed while growth of 7% in SMS use per subscriber was noted during the period.
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The attractive tariff packages with unlimited call offers and discounted minutes have helped generate a record national cellular mobile outgoing traffic of 294.2 billion minutes during year 2012-13. The cellular mobile national outgoing traffic to cellular network has shown a tremendous growth of 52.51% as compared to the same period of previous year 2011-12 in which 192.9 billion minutes were generated. Each passing year has been showing a reasonable growth as the total national cellular mobile outgoing traffic was only 76 billion minutes in 2009-10 and 137.7 billion minutes in 2010-11.

As per new figures issued by regulator Pakistan Telecommunication Authority (PTA), the massive growth in national cellular mobile outgoing traffic was also contributed by new subscribers in the cellular network during the year and very attractive packages offered by cellular operators to win the subscribers from each other.

Lucrative cellular tariff packages with unlimited call offers and discounted minutes have become a major attraction for the cellular subscribers as the cellular mobile operators adopted aggressive promotional strategies offering attractive packages for Voice, Data and SMS, including free calls and unlimited SMS.

These marketing tactics resulted in more business for companies mainly from voice calls and SMS. Both the voice and SMS traffic has risen during the 2012-13 owing to bundled packages and SMS offers.

During 2012-13, a record 315.7 billion SMSs were exchanged by the mobile consumers, showing an increase of 13.68% from previous year, though the growth rate is lower than corresponding period of previous year but the total figure of SMS exchanged is impressive.

The figures further showed that the national outgoing traffic from mobile to fixed networks remained very low as compared to traffic from mobile to mobile networks. This was mainly due to low tariffs being offered on the same network by operators as well as the huge difference in cellular and fixed line subscriber numbers.

The international outgoing traffic from cellular network has also witnessed a gradual increase and shown a healthy growth of 17.92% by June 2013 contrary to sharp decline of 28.69% for the same period of 2011-12.

The international incoming traffic on cellular networks somewhat declined and showed a negative trend of 10.02% for the year 2012-13 as compared to the year 2010-11. The decrease in international incoming traffic could be due to increase in Access Promotion Contribution (APC) change during 2012-13 from 1.25 US cents to 2.90 US cents, which discouraged Long Distance International (LDI) operators to offer lower settlement rates to attract additional incoming traffic in the country.

http://www.pakistantoday.com.pk/2014/01/pakistanis-made-294b-minute...

[Riaz Haq]

Here's PakistanToday on Mobilink's 3G rollout plans:

Mobilink has announced that it will complete the roll out Pakistan’s most modernized and largest 3G ready network with more than 9000 cell sites across the country by July 2014. The network modernization is in line with Mobilink’s strategy to provide its customers with best voice quality and fastest data speeds. The initiative was enabled by VimpelCom with investments made on various fronts including network modernization taking its total investment in Pakistan to USD 4.3 billion – the highest in Pakistan’s telecom industry. In order to celebrate this achievement, Mobilink launched a major communication drive across mainstream TV, radio, print and social media to emphasize the company’s bigger, better and faster network supremacy so that their customers never miss a moment. Speaking about Mobilink’s roll-out of Pakistan’s most modern network, Bilal Munir Sheikh, Chief Commercial Officer, Mobilink said, “Mobilink’s 3G ready network established over Pakistan’s largest cellular footprint sets us apart from our competitors as more than 37 million Pakistanis trust us with their communication needs. I am confident that our improved network will go a long way in providing the best customer experience with seamless connectivity over the most robust and technologically most advanced network of Pakistan.”

http://www.pakistantoday.com.pk/2014/03/20/business/mobilink-rolls-...