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Dr Mohammed Yaseen Chairman PTA

Dr Mohammed Yaseen Chairman PTA

The PTA recently announced the upcoming auction of 3G licenses, what impact will this have on the country?
Mohammed Yaseen: “Pakistan is the 6th most populous country in the world and has a strong economic potential. Although, acceptability of a new idea takes time, exponential growth seen in the mobile phone usage over past few years has a lot to say on the potential of Pakistan’s telecom market. Initially both 2.5G and 3G will coexist and the end users will have an option between using conventional voice packages and data empowered innovative 3G packages. With a lot of mobile infrastructure already deployed by telecom operators countrywide and with ample fiber optic rings and international connectivity in place, 3G deployment would not experience a start from scratch. Situation Sizable chunk of young and educated segment in country’s population, 3G makes a business case.
It is expected that 3G operators will launch exciting new data intensive applications like video telephony, broad band data etc. soon after commencement of their services.  Fast, advanced and reliable communication channels always prove to be helping hands for business sector growth in a country. As the technology will proliferate in the society, public sector services like e-health, e-education, e-farming, disaster management, weather forecasting etc. will also emerge.
Pakistan’s economy according to estimates would grow at 3-4 % growth rate with stitches of a strong international economic recovery. Any new initiatives in FDI are likely to affect the telecom sector and business environment of the country in a positive way. With the rising population, and consequently the demand, the potential telecom market would keep growing. With the latest technologies further investment prospects are looking up.
With 3G licensing the network coverage would increase specially in areas left out and broadband services will reach to all corners of the country. Similarly increased value added services, improved subscriber base and enhancement in voice services would result in a widened tax base. With the auction of 3G licenses in Pakistan the government estimates an influx of Rs. 60 billion funds from the telecom sector.”

What are the current challenges you face in the telecommunications sector?

MY: “The challenge of this decade is to invoke investor confidence in acquiring technology without fear of business loss as this is only the requirement of less than 40% urban population. Literacy rate needs to be improved if we are targeting on building a technologically savvy populace that would welcome any advancement in the telecom industry for the reduction of digital divide within and across countries relative to Pakistan. With strong ICT infrastructure, a significant impact can be made on the education sector with enhanced, more sophisticated, modern techniques of teaching. A wide range of resources from all around that would be available to students in Pakistan both in terms of material and human resource. Significant investment can also be attracted by providing local content in local languages. This would serve a two pronged strategy: on one hand it will bring ICT access to those who are not well conversant with English and on the other hand it will create new business opportunities. Introduction of mandatory indigenous production of some percentage of mobile user content/ICT applications could also open up new investment and employment opportunities.
As we progress from 2010 to 2020, we will experience tremendous change in fixed line voice communication business. Networks, specially designed for voice communication will vanish and it will all be IP/MPLS communication or a newer version of it. Voice and Data will continue to merge as information bits with data superseding the voice in fixed line segment. This change will also bring a bundle of new value added services offered via fixed line networks. Phone carriers have already made their goal to offer numerous “bundled” services through high speed DSL or Fiber-to-the-premises lines.
As a result of all the above mentioned activities it is presumed that there would be a significant on social and economic uplift of the country.”

What is your vision for the future of telecommunications in Pakistan?

MY: “If government of Pakistan will continue on its visionary track of implementing positive policies then it is imperative that all electronic communication infrastructure and services licensing will be channeled through one window with the mandate “make life easier through ICTs”. This will deliver potential benefits of Convergence to the ordinary citizen, consumer, and businesses and eventually to the government in a significant way. It can be predicted that the telecom industry over the next decade in Pakistan will undergo structural changes. New business models and technologies will emerge on the scene; PTA has therefore already started planning for this future. Internal deliberations on MVNO, IPV6, 3G and 4G technologies are all part of our effort to continue facilitating the telecom industry in the next decade so that it can play its part in the economic development of the country and remains a major contributor to FDI, employment, and public exchequer. PTA would also continue lobbying the Government to ensure an attractive return on investment and sustainable growth opportunities for the telecom investors. We therefore are moving into an era of E-economy with highly advanced industrial sector, modern agriculture sector and resilient financial sector. Looking ahead, PTA aims to re-define its focus areas from Telecom Services to ICT services i.e M- Business, E- health, E- education, E-agriculture, E-Comerce and E- banking. The upcoming 3G licensing and enhanced focus on ICT services will ensure the realization of the Government’s vision to spread awareness and promote the latest technological trends in telecom. PTA also plans to introduce Third Party Switch Regulations and it is working to facilitate content development and entrepreneurship.”

Pakistan’s telecommunications sector has consistently been one of the economy’s leading growth engines, what factors have contributed to the success of this sector, particularly in light of the difficult economic environment?

MY: “There are many factors have contributed to the success of Pakistan Telecommunication sector. These include consistent policies of the Government and their effective implementation by PTA, completive environment and investors confidence low tariffs. On the consumer front, PTA has taken number of steps after the introduction of Consumer protection Regulations 2009 and measures against SPAM, Unsolicited, Obnoxious, and Fraudulent Communication. In addition, Quality of service, raids against illegal operators and IMEI blocking /unblocking of stolen handsets was also conducted by PTA for the success of Pakistan Telecom Sector. In continuation of its efforts, PTA has successfully accomplished following millstones, which have significant role in the development of telecom sector of Pakistan.
•    Complaint Handling Mechanism
•    Promoting ICTs
•    Industry Broadband Issues & Interconnection Agreements.
•    E-Commerce Gateway in Pakistan
•    Propagation of M-Commerce.
•    Mobile-Based Information System.
•    Revision of Access Promotion Charges.
•    Review of Interconnection Guidelines 2004
•    Mobile Number Portability (MNP)
•    Activation of New SIMs after Verification
•    Blocking of Unregistered SIMs
•    Monitoring and Reconciliation of International Telephone Traffic (M&RITT)
•    Cellular Mobile Infrastructure Sharing
•    Issues of SMS Termination Charges
•    Development of Spectrum Charges Regime
•    Freezing of Mobile Termination Rates.
•    Promotion of Local Content and Application
•    Mobile Banking Regulations
•    National Rabta Portal Development
•    Unearthing the menace of Gray Traffic”

What are your views on market consolidation?

MY: “Pakistan Telecom industry is comprised of number of players struggling to gain share in a market which is not growing as fast it was in the past. The pace of cellular growth in the industry has slowed down as in FY 2009-10, the industry added nearly 9 million users as compared to 25 million users in FY 2008-9.
Many industry analysts believe that mergers could prove quite helpful in improving the bottom-line and the overall returns in the industry. One of the most powerful boosts to industry returns could be vertical consolidation, a merger that involves integration across different segments of telecom industry, voice, data, local, long distance etc. This would result in economies of scale, infrastructure convergence, leading to tremendous cost savings. Moreover, service providers would gain more market share and increased level of customer satisfaction by providing a wide range of services through a common platform. In addition, the service providers would benefit from back office synergies, leading to further cost savings. Horizontal merger, on the other hand, had lead to wider network coverage, costs savings on back office function, more focus on network expansion, no multiple infrastructure deployment, more market share and economies of scale due to bigger size.
Today technological developments have led to convergence of voice, data and video technologies. For a consumer convergence is the availability of telephony, data/internet, and media services through the use of one device. Extended applications of internet protocol (IP) such as VOIP provide a common platform for all these services, where in the internet services are contiguously provided over the enterprise network facilities of digital loop carriers. This vertical integration/ convergence would help in further consolidation of the market.
However, a number of concerns are raised on mergers, consolidation and joint ventures as they can result in a direct loss of competition and most of the time, lead to higher prices. Other negative effects include monopolization of the telecommunication products and services, limited innovation and high unemployment.”

How would you describe the regulatory environment governing Pakistan’s telecommunications sector?

MY: “Regulation of a sector is a complex task where it is pertinent to keep a balance between the consumer rights, industry interests and implementation of Government policies in true spirit. With ever changing market conditions and user demands, the regulator has to constantly adjust itself to the emerging paradigms of telecom market. It has been a hallmark of PTA’s success that it has always kept a flexible and supportive regulatory framework to uplift the telecom services in the country. PTA has received global awards as Most Progressive Telecom Regulator in South Asia by the international SAMENA Council, and mobile excellence awards – promoting innovation and creativity in mobile applications. With the economic slowdown and precarious security situation in the country since last year, PTA re-enforced its regulatory framework with a balance approach so that telecom users remain satisfied while operators ARPU’s improve.”

What new developments can we expect in the telecommunications sector?

MY: “We have achieved some outstanding landmarks as a regulator since liberalization in 1996, and deregulation in 2004. However for future we should not only remain focused but also develop. Roadmap” for winning together with market players and relevant stakeholders. Improved quality of telecom system and services has become a critical determinant of competitiveness in Information and Communications Technology (ICT). Therefore, policy makers are increasingly aiming at ICT not only as an element of support but as a driving force of economic growth. Given the state of economy, population growth and other socio-economic indicators, it is envisioned that total telecom investments will reach US$ 1.5 billion by 2020 whereas the Telecom sector revenues would cross Rs. 700 billion by the same year. Also, it is forecasted that owing to the trend towards the mobile services, the fixed line subscribers would more or less maintain the 5 Million average till 2020 while the broadband subscribers are expected to be 15 Million. The mobile subscribers are envisioned to be around 161 Million, approximately 89% of the total population.
Most business models for our telecom sector currently still rely upon subscriber line rentals and usage charges. Increasingly, new revenue streams are appearing in the form of either access (usually to a Web-based service) or carriage charges (usually paid by a content provider) or revenue-sharing with the providers of content and application services. This new revenue streams are expected to come into play especially for fixed line telecommunication market. Moreover, with the emergence of all-IP Next Generation Networks (NGNs), Internet Protocol Virtual Private Networks (IPVPN) will integrate voice and non-voice communications for enterprises. It may be kept in mind that most profitable business for fixed line operators is the enterprise data market yet voice traffic remains a cash cow, a continuing source of liquidity that makes the efficacy aspect of the larger telecom companies.
E-Pakistan is a unique concept that we envision for the next ten years. The notion aims to employ the substantial telecommunication infrastructure both in terms of fixed and wireless for resolving the nation’s social issues like literacy and health. These well built communication highways could be utilized to outreach a large segment of masses unable to encompass basic health and education services. The concept also focuses for knowledge sharing in different domains of ICT for development and facilitates multi stakeholder partnerships and networking among governments, industry, academia and civil society organizations of Pakistan. A huge wave of local content and applications is to be provided through this infrastructure enabling it to bring apposite values to people of Pakistan way beyond than the basic voice and data services.”

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