The newly deregulated telecom sector in Pakistan took off and has elevated the national economy. From 2.1 phones per 100 Pakistanis in 1999, the number of fixed lines has crept up to 3 per 100 today. Share of telecom sector in the Gross Domestic product (GDP) has also touched 1.9 per cent mark last year as compared to 1.6 per cent in 2001.
In a short period of three years, the present government has managed to turn around the economy and make it based more along the lines of tech-oriented industries rather than conventional industries of yore. One of the core changes has been the shift of the government itself from telecommunication service provider to market regulator.
This vital sector has been given due consideration and as a result scores of new private entrants are gearing up to provide service, and today cellular subscriptions have shot up to 18.4 million - making Pakistan one of fastest-growing cellular markets.
Pakistan Telecommunication Authority (PTA) has shown excellent efforts to make this sector fastest growing in the region. And while cellular has been more dynamic, only about 11.95% of Pakistanis have cell phones. All that is about to change. Within the next 18 months the number of phone lines - both fixed and mobile - in Pakistan is expected to double.
The real action, though, is likely to be in cellular. This year the number of mobile users outstripped fixed-line subscribers for the first time, and cellular is sure to make further gains as two new operators have joined the existing four.
According to Pakistan Telecommunications Authority (PTA) cellular phone connections are growing at the staggering 140 per cent annually. The total number of cellular phone subscribers stands at 18.4 million. Since July 2003, PTA has handed out more than 200 fixed, mobile and long-distance licenses to different companies, officials believe operators will pour as much as $8 billion into networks and equipment over the next five years, compared with just $1.5 billion since 1999.
The real winners, according to the PTA, will be Pakistani consumers and businesses. As expected, the tariffs are coming down as competition heats up. The change is also giving the broader economy a much-needed boost.
PTCL tariffs have been reduced keeping business needs in mind, along with the future competitiveness of the telecom giant. Recent changes in the hierarchy of the stated owned ISP, PakNet, also bode well for the ISP industry in general. With positive change being made in ISP with the widest national outreach, competition amongst ISPs is sure to rise, leading to improving better and quality of services for the consumer. This opens up more avenues for private sector organisations to join the fray with the best possible packages to appeal to the local user.
The same is the case with the mobile telephony sector, with such new players as Telenor and Warid justifying the opportunities and potential that exists in the Pakistani telecom sector. For instance, two Cellular phone operators, Telenor and Warid Telecom, launched their services with initial investment of millions of dollars few months back are separately claiming to have one million subscribers base. "It's an absolute revolution," says Chairman PTA major General Shahzada Alam Malik. As more choices are made available to consumers and the markets mature with rationalised tariffs, quality of service is likely to improve.
Internet bandwidth consumption, Internet access via ISDN, DSL services, CDMA, GPRS etc are just some of the technologies that have either grown exponentially in Pakistan or have had a favourable reception by the local consumers.
Additional opportunities that need to be taken into account include the growth of text and multimedia messaging which accounts for nearly 5-10% of telecom revenue around the world. Infrastructure development in situations where capital is constrained and multiple players exist has lead to an increase in the number of secondary companies that offer talent infrastructure, construction support and wireless network design and wireless specific back haul.
This is also an area that local organisations can look into the growth of the telecom sector. There is also a need to deregulate the growth of Broadband, WLL hotshots and ability to deliver multi megabits service, which can be a viable option in a growing market like Pakistan. Arrangements should be made to spread WLL service to rural areas where teledensity is low. Although major achievements have been made in different telecom areas, the operators should also focus on enhancing teledensity in the rural areas of the country as majority of villages had not been connected so far.