54219071 Telecom Industry of Pakistan

Technical and Business Writing Report:

Telecom Industry of Pakistan – Present and Future Trends

By:

Haisum Bhatti (0812155)

BS – Software Engineering 2

To:

Miss. Iqra Zafar

(Course Instructor-TBW, SZABIST-Karachi)

13th May, 2009.

Telecom Industry of Pakistan – Present and Future Trends Technical and Business Writing Report by Haisum Bhatti

http://haisum.info

2009

Acknowledgement

All the admirations are for the Allah Who created us and gave us wisdom to accomplish

the tasks that none of other creatures can, and Who gave us opportunity to get the

education to understand his nature more clearly.

I would like to commend Miss Iqra Zafar for her eternal efforts to teach us technical and

business writing. I would also like to laud my friend Muhammad Ahmed for developing

and designing title flier for this report and Syed Abid Hasan for reviewing the document

for formatting.

Last but not the least I would like to thank my dear parents; specially my father

Mussawir Bhatti for his faith and believe in me, which gives me confidence and courage

to defeat any challenge in my life.

2

http://haisum.info/


http://haisum.info

2009

Table of Contents

Abstract............................................................................................................................4

1. Introduction..................................................................................................................5

1.1. Background............................................................................................................5

1.2. Problem Statements..............................................................................................6

1.3. Research Objectives..............................................................................................7

1.4. Benefits of the Study..............................................................................................8

2. Scope of Study.............................................................................................................8

2.1. Geographic Scope..............................................................................................8

2.2. Technological Scope..........................................................................................9

2.2.1. Scope based on Data Collection..................................................................9

2.2.2. Scope of Time..............................................................................................9

3. Research Methodology..............................................................................................10

3.1. Qualitative Methodology......................................................................................10

3.2. Sampling Method.................................................................................................10

3.3. Data Analysis Techniques...................................................................................10

4. Research Limitations..................................................................................................10

5. Telecom in Pakistan – A Brief Overview....................................................................11

6. Telecom Industry of Pakistan – Past Trends..............................................................12

6.1. Brief History.........................................................................................................12

6.2. Might is Right.......................................................................................................14

3

http://haisum.info/


http://haisum.info

2009

7. Telecom Industry of Pakistan – Present Trends........................................................15

8. Sectors of Telecom in Pakistan..................................................................................15

8.2. Fixed / Land line...............................................................................................19

8.2.1. PTCL..........................................................................................................19

8.3. Fixed Wireless (WLL)...........................................................................................21

8.4. WiMAX.................................................................................................................21

8.5. Voice Over IP.......................................................................................................21

8.6. Internet Sector.....................................................................................................22

8.6.1. Cable net and Dial up.................................................................................22

8.6.2. Broadband and DSL...................................................................................23

8.6.3. Wireless Connections.................................................................................23

9. Effects of Telecom.....................................................................................................24

9.1. Economic Effects.................................................................................................24

9.2. Employment.........................................................................................................26

9.3. Some Bad Impacts...............................................................................................27

10. Expected Future Trends...........................................................................................28

11. Conclusion...............................................................................................................28

12. References...............................................................................................................29

Glossary.........................................................................................................................32

Appendix........................................................................................................................35

4

http://haisum.info/


http://haisum.info

2009

Table of Figures

Figure 1-Pakistan Telecom in Numbers.........................................................................15

Figure 2 - Market Share of Mobile Companies...............................................................16

Figure 3 - Different Mobile Companies...........................................................................16

Figure 4- PTCL One Stop Shop.....................................................................................19

Figure 5 - Internet Statistics...........................................................................................24

Figure 6 - Imports of Telecom........................................................................................36

Figure 7 - Investment by Cellular Companies................................................................37

Table of Tables

Table 1- The basic statistics as in December 1998 (Bakai, 1999).................................13

Table 2 - Number of Mobile Subscribers........................................................................16

Table 3 - Cellular Subscribers and Growth Rate............................................................18

Table 4 - Telecom Sector share in GDP (%)..................................................................24

Table 5 - GST/CED Collection from Telecom Sector (Rs. in billions).............................25

Table 6 - Foreign Direct Investment in Telecom Sector.................................................25

5

http://haisum.info/


http://haisum.info

2009

Abstract

Telecom industry, collection of all the industries and companies providing phone

service, data or entertainment to consumers and businesses, is the fastest growing

industry in Pakistan. As recently as 1994, trained basically in voice telecomm

technologies , a Divisional Engineer at a PTCL city exchange could not believe that data

could also be sent over a telephone line via some means!

In 2003, the government de-regulated Telecom policy of PTA (See Appendix). This de-

regulation of policy allowed access for local and international companies to invest in

telecom industry more flexibly than ever. New companies came into market and due to

high competition rates went cheaper and cheaper, hence making telecom-oriented

services affordable to many. This resulted rapid growth of telecom.

New services are expected to get launched in future. These new services would keep

Telecom in its hay-day at least for next 6-7 years. Therefore for any organization or

individual, intending to invest or any student, intending to choose this sector as career,

this is the juicy field.

6

http://haisum.info/


http://haisum.info

2009

1. Introduction

1.1. Background

Telecom industry, collection of all the industries and companies providing phone

service, data or entertainment to consumers and businesses, is the fastest growing

industry in Pakistan today with highest per year growth rate in tele-density1 worldwide

(Atta 2008b, P.1 of 1).

Due to high growth rate this industry has become back-bone of Pakistan’s economy. It

is providing many employment and investment opportunities due to high revenues

generated via huge number of users of telecom sector. Along with opportunities, this

industry also provides vast facilities to communicate and connect globally in better,

reliable and modern manner. Today IT sector of Pakistan can be considered as most

developed industrial sector of Pakistan. According to Atta(2008a), this industry is

expected to grow by 50% in next 3 years and growth rate might increase in future due to

introduction of 3G2 technology in cellular services and new internet service providing

methods like DSL, Broadband and Wi-Max throughout the country. As much as 1 million

new customers are added to number of cellular subscribers which stood at 91,442,341

by March 2009 (Afzal 2009, P.1. of 1).

More than 2% of the share of GDP of Pakistan is generated from telecom, this industry

1 The number of operational telephone lines as a percentage of population 2 3rd Generation (refer Glossary)

7

http://haisum.info/


http://haisum.info

2009

holds more than US$ US$ 1,438 million of foreign direct investment making 27% of total

foreign investment, which is more than any other industry including banking and

manufacturing in Pakistan (Pakistan Telecommunications Authority 2007, P.2.).

This report concerns on the present and future trends in this incredibly growing Telecom

Industry of Pakistan. This will help many individuals as well as organizations related

with field of IT to understand the depth and density of this industry and will encourage

men-power in this high revenue oriented field.

1.2. Problem Statements

This report will try to focus on various aspects of Telecom industry in Pakistan, in order

to accomplish desired tasks this report’s theme would be based on finding answers to

some problem statements. These problem statements would be:

What was the past of telecom industry and its trends in Pakistan?

What are the current trends of Telecom industry of Pakistan?

How telecom industry is affecting economy of Pakistan?

How telecom industry is helping to improve living standards of local people?

How it is facilitating business and other industries?

Where does Pakistan stand in global facts and figures regarding telecom industry?

Keeping track of current facts and figures, what might be the future of telecom industry

in Pakistan?

Depending on the time and scope of study, I might add/alter some of the problem

statements within the scope of research.

1.3. Research Objectives

Everything and every act have objectives so has this report, regarding telecom industry

and its present and future trends. The main objectives of this report are:

8

http://haisum.info/


http://haisum.info

2009

To determine past trends of telecom industry of Pakistan.

To determine current trends of telecom industries of Pakistan.

To illustrate the ways in which telecom industry is affecting economy of Pakistan.

To demonstrate role of telecom industry in improving living standards of people of

Pakistan.

To point out the facilities provided via telecom to business and other industries.

To analyze facts and figures of telecom industry of Pakistan with global standings.

To predict future of telecom industry of Pakistan.

1.4. Benefits of the Study

Study is quite beneficial in many aspects. First of all it provides an insight of the only

modern industry that Pakistan can feel proud about. Secondly it illustrates all the facts

and figures necessary to demonstrate market of Pakistan in this sector which would

encourage foreign and local investment in this field, new people would get involved in

the business hence improving the standards of current market and industry. Thirdly, in

student’s perspective, it encourages new students to explore and become part of

telecom and IT industry of Pakistan. This will improve men-power and implementation of

modern knowledge in this field. Furthermore this report also predicts the future of

telecom sector in country by analyzing present and past trends, which would help

investors and researchers to conduct their respective tasks in more specific manner

rather than loitering here and there.

In short, this report illustrates past, present and future trends of Pakistan’s telecom

industry which would help in evolving does and don’ts of this industry.

2. Scope of Study

The scope of this study needs to be defined in different scenarios which are as under:

9

http://haisum.info/


http://haisum.info

2009

2.1. Geographic Scope

Geographically this report is limited to Pakistan only because the main task of this

report is to analyze and illustrate telecom industry’s trends in Pakistan. More focus

would be given to trends in urban areas due to easy access. However trends in rural

areas would not be neglected completely and would be analyzed where necessary and

possible.

2.2. Technological Scope

Telecom is a vast industry it includes many sub-fields like cellular services, internet

access, radio, television and data access etc. Due to time constrain each of these sub

topics can’t be covered. Therefore main focus of this report will revolve around cellular

and internet services.

2.2.1. Scope based on Data Collection

Being quantitative in nature this report will revolve around secondary data collection

from authentic sources like PTA’s official website and other press releases about

telecom. Although primary data must be included in the report to make it complete but

due to time and access constrains it is not possible to include primary data in the report.

However efforts would be conducted, where possible and applicable to include primary

data.

Data collection would be done for:

Past trends in telecom industry of Pakistan

Current trends in telecom industry of Pakistan

Facts and figures regarding usage of cellular and internet services throughout

country

10

http://haisum.info/


http://haisum.info

2009

International standings of Pakistan in telecom industry

Facts that might be used to predict future of telecom industry in Pakistan

2.2.2. Scope of Time

Since telecom is not new in Pakistan, it has just spread rapidly throughout country;

therefore the scope of time regarding this report is not broad. This report has a scope of

time, with respect to available data, from year 1991 to 2009. Future trends would be

predicted for next six years i.e. till 2015.

3. Research Methodology

Research is qualitative in nature and focuses on collecting data from authentic and

authorized secondary resources as websites, magazines, reports and articles from

newspapers.

3.1. Qualitative Methodology

Since research is purely qualitative in nature hence qualitative methodology and the

sampling methods need to be very clearly defined in order to meet the research

objectives highlighted.

3.2. Sampling Method

The sampling would be done by secondary resources which would include the past and

present journals published covering these aspects, newspapers, government

notifications on federal ministry websites, economic surveys conducted by ministry of

finance, industrial surveys, Surveys conducted by PTA, Reports regarding telecom

sector, discussions held on online Pakistani telecommunication forums like those on

www.propakistani.com and other relevant sources.

11

http://haisum.info/


http://haisum.info

2009

3.3. Data Analysis Techniques

Data would be analyzed by comparing the figures acquired for past with those acquired

from recent researches and reports. This would evaluate the trends between past and

present and would help in evaluating results for future trends of telecom in Pakistan.

4. Research Limitations

Within the valid scope of the research, following are the limitations of the research:

The data collected for this report is narrow in accordance with this broad topic, due to

lack of time and resources.

Research would be limited to Cellular services and Internet access, data for sectors

like radio, TV and data services are neglected due to constrain of time and scope.

Attention and focus would be furnished to urban areas in accordance with

geographical scope.

The research is only limited to the data collection from internet, newspaper, reports

etc.

Data collection in a short time constraint.

This report is based on my conception what I think about it if there is any error than

kindly forgive me because thinking may vary from person to person.

5. Telecom in Pakistan – A Brief Overview

According to Saeed (2003) Telecom industry is booming in Pakistan, with new

companies getting licensed, the competition is tough as a result the consumer is getting

benefit and enjoying cheap call rates and internet access. In the country of a population

of more than 16 million, telecom is one of the best revenue generating industry.

As voice over IP, web conferencing and online video sessions are becoming popular

12

http://haisum.info/


http://haisum.info

2009

and industry is growing at a rapid rate these companies have bright future ahead. These

companies and their investment in local market of Pakistan are providing an enormous,

economic, social and financial support to Pakistan’s people and government.

The popular companies providing telecom services in Pakistan are Mobilink, Ufone,

Telenor, Zong, Cybernet, Orascom and PTCL etc. Each of these companies would be

further discussed in their respective sections.

6. Telecom Industry of Pakistan – Past Trends

6.1. Brief History

As told by Saeed (2003) story started in 1947 when Pakistan’s Telecom sector inherited

the British Post, Telegraph3 & Telephone departments with a miniscule base of 7000

telephone lines used by British rulers during their stay. For 30 years this entity remained

with its old mechanical, analog ‘Strouger’ switches and analog telephone lines. By 1962

this PTT Department was split up into the Telephone & Telegraph Department and the

Postal Departments. By 1991 this was further re-organized thorough the PTC4 Act 1991

opening this public sector to the private sector companies. Licenses were granted for

non-basic services where the PTT had no experience at all. These were Data Network

Services, Paging, and Manufacturing of Small Telephone Exchanges. Mobilink, the first

cellular services providing company was also established during this era.

Once the Internet exploded onto the Global Telecom scenario, it was evident that the

old Pakistan Telecom monopoly was no longer able to compete with new revolutionary

technologies. As recently as 1994, trained basically in voice telecomm technologies , a

Divisional Engineer at a PTCL city exchange could not believe that data could also be

sent over a telephone line via some means!

3 Service provided by Post office, similar to telephone (see glossary) 4 Pakistan telecommunication company (see Appendix)

13

http://haisum.info/


http://haisum.info

2009

In 2003, the government de-regulated Telecom policy of PTA (See Appendix). This de-

regulation of policy allowed access for local and international companies to invest in

telecom industry more flexibly than ever. New companies were licensed which

increased competition and the rates of services drastically came down. Due to cheap

rates telecom became affordable to common men, and hence growing rapidly became

the trend of present for Pakistan.

Table 1- The basic statistics as in December 1998 (Bakai, 1999)

Infrastructure Dec. 98 March

2003

Network Capacity [ ALI] 3.52 (M) 4.4

Million

Telephones in service [ ALIs] 2.82(M) 3.69

Million

Total Population 130

million

145

million

Teledensity June 1998 2.20 % 2.54-

2.73 %

Pending demand NA 244,000

Network Digitalization June

1998

78.27% 100%

Fiber Optic cable length 3902 km 6204

km.

14

http://haisum.info/


http://haisum.info

2009

No. of exchanges installed in

1997-98

42

Total exchanges 2577 2700

New NWD Stations added

(1997-98)

143

Total NWD Stations 1076 1781

No. of NWD Calls (During

97-98 – Jjuly - Dec)

525.48

(M)

No. of NWD Units (during 97-

98)

3540.630

(M)

New Telegraph Offices

opened (1997-98)

1 346 –

total.

PCOs & Payphones

Rural

Urban

10,787

6,762

12,500

105,000

6.2. Might is Right

Might is right was reflected in the PTC’s (see Appendix) decisions, to not allow anyone

to even attach a Fax machine or a small Telephone Exchange to a telephone line in

1980 (Saeed 2003, P.2 of 2). Such products required "Licenses" and hence generating

15

http://haisum.info/


http://haisum.info

2009

revenue because of no competitive in market at all. Mobilink, being the only cellular

service, also robbed the customers with its high rates of up to Rs.25-50 / minute, local

calls. The rates varied according to the distances.

7. Telecom Industry of Pakistan – Present Trends

With the God’s grace and the Musharraf-Government’s5 policies rule of jungle from

Pakistan’s local market has vanished. New competitors have arrived against PTCL and

Mobilink. These include Ufone, Telenor, Zong, Warid, Wateen, WorldCall, and

GoCDMA etc.

High competition has reduced the service rates, making them accessible to local

people, causing rapid growth of industry. New investors are investing their investment in

this field. Taxes generated through this industry play a vital role in economic

development. Further details about present trends are discussed in heading 8 - 11.

8. Sectors of Telecom in Pakistan

Telecom industry of Pakistan has several sectors including cellular, internet,

fixed/wireless LAN/DSL/Broadband, Wi-Max, VoiP. Each of these sectors is discussed

below:

8.1. Cellular Sector

According to PTA (2008) the Pakistan cellular

market had reached the mark of 90 million

subscribers in September 2008, almost double from

2006 numbers. The growth slowed after that and at

the end of November 2008 the total mobile

subscribers were 90.5 million. The year 2008 was

5 Government lead by General Parvaiz Musharraf and PML-Q from October 1999 – February 2008

16

Figure 1-Pakistan Telecom in Numbers

http://haisum.info/


http://haisum.info

2009

also marked by changes in SIM sales and registration process, enforced by PTA, the

government regulator. Following graph shows the market share of cellular companies of

Pakistan.

Figure 2 - Market Share of Mobile Companies

Table 2 - Number of Mobile Subscribers

Now let’s review some recent history, at the end

of year 2006 the total subscribers were 48.2

million. In June 2007 the total mobile users had

reached over 63 million. Based on numbers

published at PTA website for 2007, the total

number of subscribers (technically it is the

number of SIMs issued) was 76.6 million, a

teledensity of about 49%. In 2007 the average

17

Figure 3 - Different Mobile Companies

http://haisum.info/

http://telecompk.net/wp-content/uploads/2008/11/pkms-0908.jpg

http://telecompk.net/wp-content/uploads/2008/08/pkmn-0708.png


http://haisum.info

2009

growth rate was almost 2.5 million new subscribers each month! After second half of

2007 it seemed as if the growth had slowed down a little bit but overall it was fine. One

remarkable achievement was by Zong (formerly Paktel) which launched very successful

campaigns towards 2007’s end. See following chart for a breakdown of market share by

mobile companies at the end of first quarter of 2007.

Here’s a brief description of all the mobile companies in Pakistan (based on data from

NTCPK (2004)):

At the top is Mobilink, the Pakistani unit of Egypt-based Company

Orascom. Company has been operating in Pakistan since 1994.

Subscriber share is almost 35% at the end of Sep 2008.

Ufone, a wholly owned subsidiary of PTCL, is now under the control of

Etisalat group of UAE. It has about 21% of subscriber share and

added the most lines (2.4 million) from 2006-07.

Warid, owned by the Abu Dhabi group of the United Arab Emirates

and sister of Wateen group is number 4 in competetionwith 18%

market of subscribers. Recently it sold 30% share to SingTel.

Norway’s Telenor, entered in 2004 with about a billion US dollar

investment in Pakistan has been doing well, based on its recent

earning report. It shares 20% of the market share. Telenor’s stock is listed in the Oslo

stock market (TEL) and in US (TELNY).

Zong, formerly Paktel, was the latest target of foreign investment. After it

got acquired by China Mobile it was rebranded as Zong and launched one of the most

successful and productive campaigns. Within a matter of few months, Zong has

achieved a 6% of market share.

18

http://haisum.info/

http://www.mobilinkgsm.com/

http://www.ufone.com/

http://www.waridtel.com/

http://www.telenor.com.pk/

http://paktel.com/gsm/


http://haisum.info

2009

The table shows number of cellular subscribers from 2000 to March 2009.

Table 3 - Cellular Subscribers and Growth Rate

19

http://haisum.info/


http://haisum.info

2009

8.2. Fixed / Land line

8.2.1. PTCL

Pakistan Telecommunication Company Limited (PTCL) is

one of the largest telecommunication companies in Pakistan.

This company provides telephony services to the nation and

has the status of backbone for country's telecommunication infrastructure despite arrival

of a dozen other competent including telecom giants like Telenor and China Mobile.

According to Wikipedia (2009) The Company consists of around 2500 telephone

exchanges across country providing largest fixed line network. GSM, CDMA and

Internet are other services of PTCL, making it a gigantic organization. The Government

of Pakistan sold 26% shares and control of the company to Etisalat, a UAE company in

2006. The Government of Pakistan retained 62% of the shares while the remaining 12%

are held by the general public of Pakistan.

In middle of 2005 Government of Pakistan had decided to sell at least 26% of this

company to some private agency (Wikipedia 2009). There were three participants in the

quest for privatization of PTCL. Etisalat, a Dubai based telecom company was able to

get the shares with a large margin in the bet.

When Government was going to

privatize the company there was

country wide protest and strike by

PTCL workers. Protestors even

disrupted Phone lines of some big

Government institutions like Punjab

University Lahore and many lines of

public sector were also blocked.

Military took over the management of

all the Exchanges in the country. They

20

Figure 4- PTCL One Stop Shop

http://haisum.info/


http://haisum.info

2009

arrested many workers and put them in prison. The conflict between Government and

employees ended with a 30% increase in the salaries of workers.

There have been diverse changes in the company due to privatization. Such examples

include the VSS (Voluntary Separation Scheme for its employees), Enterprise resource

planning (SAP based), restructuring and B& CC (Billing and Customer Care Software)

etc (Wikipedia, 2009). Another minor change was change of brand identity (logo) that

presents PTCL's new face after privatization, with greater focus on customer

satisfaction and bringing about of new advancements in telecom for Pakistani

consumers.

8.2.1.1. Historical Background

These are some historical milestones for PTCL (Wikipedia 2009):

1. 1947 Posts & Telegraph Dept established

2. 1961 Pakistan Telegraph & Telephone Deptt.

3. 1990-91 Pakistan Telecom Corporation

4. 1995 About 5% of PTC assets transferred to PTA, FAB & NTC.

5. 1996 PTCL Formed listed on all Stock Exchanges of Pakistan.

6. 1998 Mobile (Ufone) & Internet (PakNet)subsidiaries established.

7. 2000 Telecom Policy Finalized

8. 2003 Telecom Deregulation Policy Announced

9. 2006 Etisalat Takes Over PTCL's management

8.2.2. The National Telecommunication Corporation

The National Telecommunication Corporation (NTC) is another telecommunication

network operator established by the Government of Pakistan. It has inherited 5 percent

of the assets and infrastructure of the PTC, including a nation-wide microwave trunk

21

http://haisum.info/


http://haisum.info

2009

backbone (Callpakistandirect.com, 2009). NTC has the mandate to provide domestic

telecommunication services to the armed forces, defense projects, federal government,

provincial governments and other government agencies and institutions. However, it is

not allowed to sell its capacity on the telecommunication system to any entity other than

government agencies or the PTCL. For international calls, NTC users have to use PTCL

facilities.

8.3. Fixed Wireless (WLL)

Wireless local loop services are based on CDMA and are considered an

alternative to copper lines. Recently rebranded Vfone service by PTCL is

the market leader and there have been many intersting marketing and

pricing moves (Bhatti 2007, P.1. of 1).

8.4. WiMAX

WiMAX is service that provides wireless internet access. This service is

still new and is in terms of development in Pakistan. Wateen has

emerged as the largest player and has started WiMAX services since

December, 2007. Mobilink Infinity has also started commercial WiMAX service in

Karachi and other cities. The second best player, World Call had started its work in

early 2008s and now has a broad network in major cities of country. Ufone has also

started its homework on Wi-Fi. Wi-tribe, cybernet and WOL are other players in this

sector.

8.5. Voice Over IP

VoIP (Voice over IP), in other words: an International call, local rates, is new telecom

sector in Pakistan. Companies providing VOIP and call forwarding services are

(telecompk.net 2009, P.1.):

• Vonics

• BRAIN TEL

22

http://haisum.info/

http://braintel.net.pk/#_blank

https://www.vonics.com/#_blank

http://telecompk.net/wp-content/uploads/2007/09/vfone-nolr.jpg


http://haisum.info

2009

• CallPakistanDirect

• Rebetel - not specific to Pakistan

• FreeCallPlanet - not specific to Pakistan

8.6. Internet Sector

Although internet is in use throughout Pakistan since 1996, but its use has widely

spread in recent years. New services and companies are coming in the market every

day. A reasonable investment is being put into this, especially by cellular companies

and PTCL. Internet sector can be categorized into following sub-sectors according to

type of internet service.

8.6.1. Cable net and Dial up

Cable net and dial up are most widely used services for accessing internet in Pakistan

due to their cheap rates.

Companies like CyberNet and SuperNet provide ISP hours through cards available at

general shops or PCOs and other public outlets, for as low as Rs.10. PTCL also

provides dial-up services for Rs.6/hour. Although dial-up service is cheap but it has very

slow speed, therefore people, who can afford a faster connection, avoid using dial-up. It

is rapidly vanishing from market due to other high-speed services.

LAN or publicly famous term “Cable net” is another cheaper way to access the internet.

It is widely used and provides a much better performance than dial-up. These services

can be acquired for monthly charges of Rs.400-600/month.

8.6.2. Broadband and DSL

Broadband and DSL are trend of day nowadays. People wanting higher speeds and

faster access prefer using Broadband and DSL services. These services are a little

expensive than Dial-up and Cable-net.

23

http://haisum.info/

http://freecallplanet.com/#_blank

http://www.rebtel.com/#_blank

http://www.callpakistandirect.com/#_blank


http://haisum.info

2009

PTCL broadband service is the leading broadband service, due to cheaper rates and

faster service. Link.net, Wateen and CyberNet are leading DSL service providers

throughout country. The services are available in range of 128kbps-4mbps6 at a cost

ranging from Rs.800-4000/month.

8.6.3. Wireless Connections

Wireless connections are of different types and categories. Their speed varies from

place to place according to type of service.

Most commonly available and reliable service is WiMAX, wireless connection with ability

to cover larger areas wirelessly. The service is being provided by Mobilink infinity,

WorldCall and Wateen. It is still in development process and is only available in large

cities like Karachi, Lahore and Islamabad.

Another type of wireless connection is WiFi, wireless connection only covering smaller

areas like a house or small company. This service is used in small companies to enable

access to internet to every computer. It is also used in universities like SZABIST, IBA

and LUMS to provide inter-organizational internet access.

GPRS and EDGE (See Glossary) based services are also provided at fix rate to mobile

phone users to access internet on their cell phones or on PCs by connecting cell

phones to them.

6 1 mbps= 1024 kbps

24

http://haisum.info/


http://haisum.info

2009

Figure 5 - Internet Statistics

9. Effects of Telecom

9.1. Economic Effects

Telecom has a direct impact on economy of the country. It shares than 2% share of

GDP. Almost 45 billion tax is collected every year from this sector. Following few tables

illustrate how and how much does this sector affect Pakistan’s economy (PTA 2008).

Table 4 - Telecom Sector share in GDP (%)

Years %age share of GDP

2000-01 1.6

25

Source: PIE, FLAG, PSEB, May 2007

Statistics

C

B

D

ANo. of DSL / Broadband Users

Purchased Bandwidth

No. of Dialup Users

Bandwidth Delivered2484 MB

(PIE + FLAG)10.5 Million

1.5 Million

3104 MB (PIE + FLAG)

http://haisum.info/


http://haisum.info

2009

2001-02 1.6

2002-03 1.7

2003-04 1.7

2004-05 1.9

2005-06 2.0

Table 5 - GST/CED Collection from Telecom Sector (Rs. in billions)

2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08

Mobile 2.0 3.3 5.2 9.9 18.8 28.2 36.80

Basic

Telephony

* 6.9 8.2 6.9 9.7 7.7 7.9 6.80

Others** - - - 0.9 0.3 0.2 0.93

Total 8.9 11.5 12.1 20.5 26.8 36.3 44.53

* PTCL and NTC only

**Others include WLL/ LDI operators

Table 6 - Foreign Direct Investment in Telecom Sector

Years Total FDIFDI in Telecom

Sector

Contribution in

Total FDI (%)

2001-02 484.7 6.1 1.26

2002-03 798 13.5 1.69

2003-04 979.9 207.1 21.13

2004-05 1524 494.4 32.44

26

http://haisum.info/


http://haisum.info

2009

2005-06 3521.0 1905.1 54.11

2006-07 5124.9 1824.3 35.60

2007-08 5152.80 1438.60 27.92

If we analyze Telecom Sector share in GDP in the chart on previous page we can

clearly see that telecom sector’s revenues and share in GDP are continuously growing

every year. Similarly taxes acquired and foreign investment is also continuously

growing. From this we can conclude that telecom has a bright future in Pakistan.

9.2. Employment

As Pakistan is experiencing a massive boom in the Telecom sector, job opportunities

are also increasing at light’s speed. Telecom sector has revolutionized the job sector in

Pakistan and has become one of the largest job providers in Pakistan. If you log in to

any job site of Pakistan such as rozee.pk, you’ll observe that roughly around two-thirds

of job postings are related to the Telecom industry directly or indirectly.

There are a lot of universities offering degrees in Telecom Engineering. The Electrical

and Electronic Engineering programs have also been upgraded by the universities, thus

offering modern education in Telecom related fields. Job opportunities definitely depend

on the standing of the university, the quality of education and communication skills. Still,

the Telecom Industry in Pakistan has gone through such enormous expansion that

virtually no Engineering graduate (who is graduated in Electronics or Telecom

Engineering) is jobless here. Telecom Industry in Pakistan is hiring from every

university, whether it’s a hi-fi one (like GIKI, NUST or SZABIST), and the ‘Sarkaari’

(governmental) and Private universities (recognized by HEC) and even in some cases

from the ‘Dhabaa’ (Worthless) universities, to meet the ever growing demands (Khan

2009, P.1 of 1).

Let us discuss some salary structure with respect to fresh graduates. Mobile companies

27

http://haisum.info/

http://greenwhite.org/2007/05/24/a-disaster-in-the-making-hec-and-fake-business-minded-institutions/

http://www.hec.gov.pk/new/index.htm

http://nust.edu.pk/usr/index.aspx

http://www.giki.edu.pk/


http://haisum.info

2009

generally pay you the highest. Salaries for beginners in the Telecom industry start from

15000-35000. It definitely depends on the employer’s Market Position, the GPA you

have achieved and finally from which university have you graduated. Also if you have

secured good Internships in your junior years, then the chances of better employment

will definitely be higher.

As the Telecom sector is the fastest growing sector in the world (with new technologies

developing every day), we can hope that career prospects will remain higher in this

industry in years to come. So if any of our readers has yet to decide about one’s future

course and is interested in the Telecom industry, I would advice him/her to embrace this

field with broad arms. However I think the readers of this report would be more

professional and would know market more compactly than me. Any suggestions in this

regard would be gladly furnished to improve this report.

9.3. Some Bad Impacts

Telecom Sector also shares some unpleasant things as well, which are (Atta 2008a, P.1

of 1):

• Cellular market ruined Local Loop (Land Line) such as PTCL and WLL market

• Regulator (PTA) was unable to conduct Quality of Service survey, and waved for

cellular companies that have flaws in their services

• 20 Million illegal and un-identified SIMs are circulating in market

• Increment in SPAM text messaging and unwanted phone calls

• Network Over charging

• Low Average Revenue Per User (ARPU) due to competition

28

http://haisum.info/


http://haisum.info

2009

• Low ROI (Return on investment) for smaller to mid-sized telecom business

• GST collection from telecom sector is persistent for last 2 years at Rs.35 billion,

despite of millions of additional telecom users

10. Expected Future Trends

Keeping the track of briefly discussed past and present trends of Telecom sector in

Pakistan we can conclude that “Telecom in Pakistan is in its Hay-day”. Investment,

employment, career and hence everything in this field seems to be awesome in future.

Investment is expected to increase, as PTA would give 3G licenses to cellular

companies in few months, which would rush a large amount of customers to use this

new service. Furthermore still undiscovered and unpopular services like GPS, Push-to-

Talk (introduced by Ufone but not wide spread) might get introduced in Future

increasing tele-density. Other possibilities lay in WiMAX and other similar internet

services with high speed and cheaper rates.

These new services would keep Telecom in its hay-day at least for next 6-7 years.

Therefore for any organization or individual, intending to invest or any student, intending

to choose this sector as career, this is the juicy field.

11. Conclusion

Telecom sector in Pakistan is booming nowadays faster than in any country on earth

today. The main factors behind this growth are foreign investment and neck to neck

competition among companies providing services in this sector. It is a major source of

revenue for Pakistan’s government and generates more employment opportunities

nowadays than any other industrial sector of country. Telecom has revolutionized

means of business, communication, lifestyle and education in Pakistan. It is still growing

29

http://haisum.info/


http://haisum.info

2009

rapidly.

New investments in several services are expected in future therefore the future of this

sector in Pakistan seems bright and enlightened.

AppendixA. De-Regulation Policy for the Telecommunication Sector

In July, 2003 PTA released its new, de regulated policy which had following objectives

PTA 2003, P.5.):

• Increase service choice for customers of telecommunication services at

competitive and affordable rates

• Promote infrastructure development, especially infrastructure that will increase

tele-density and the spread of telecommunication services in all market segments

(including voice, data and cellular etc)

• Increase private investment in the telecommunication sector and encourage local

telecom manufacturing / service industry

• Recognizing the challenge to incumbent, minimize exposure to the Government’s

revenue base in the short term

• Accelerate expansion of telecommunication infrastructure to extend

telecommunication services to un-served and under-served areas

• Liberalize the telecommunication

30

http://haisum.info/


http://haisum.info

2009

• Maintain an effective and well defined regulatory regime that is consistent with

international best practices, and;

• Maintain consistency with Pakistan’s IT and Internet promotion policy of low

prices for bandwidth to make Internet access affordable.

Further details regarding PTA’s deregulation policy can be found in a PDF titled De-

Regulation Policy 2003, from PTA’s website.

B. Pakistan Telecommunication Company

Pakistan Telecommunication Company (PTC). The Group's principal activity is to

provide telecommunication services. The Group provides domestic and international

services throughout Pakistan and also manufactures telecommunication related

equipment. The Group also provides services to territories in Azad Jammu and Kashmir

and northern areas.

C. Additional Graphs

31

http://haisum.info/


http://haisum.info

2009

Figure 6 - Imports of Telecom

32

http://haisum.info/


http://haisum.info

2009

Figure 7 - Investment by Cellular Companies

D. Some Facts about Pakistan Telecom Industry

PTA successfully liberalized the telecom sector of country in an efficient,

transparent and fastest deregulation of telecom in the region

The Government of Pakistan gave the status of Industry to Telecommunication

Sector

With de-regulation of telecom sector, PTA awarded 14 Long Distance and

International licenses, 38 fixed local loop licenses and 17 Wireless Local Loop

licenses to different companies.

Under the deregulation process PTA awarded two new Cellular Mobile Licenses

to Warid Telecom and Telenor for US$ 291 Million through open auction, while

renewed other 2 licenses for Mobilink and Paktel against same value.

In 2007 Azad Jammu and Kashmir council adopted the Pakistan Telecom Act

1996, and PTA’s jurisdiction was expanded to reach AJK and Northern Areas.

PTA awarded five Cellular Licenses for AJK and NA while 13 companies were

awarded total of 24 licenses for Long Distance International, Fixed Local Loop,

Wireless Local Loop and Class Value added services categories.

Pakistan Telecom Authority is capable of tracking gray traffic (illegal traffic)

thanks to a technical facility installed, after which PTA in collaboration with Police

has raided and closed many illegal telecom businesses throughout the country.

PTA got implemented IMEI system to restrain handset thefts, through this facility;

customers can block their mobile phones if they provide IMEI and other details.

33

http://haisum.info/

http://www.propakistani.com/category/cellular/mobilink/

http://www.propakistani.com/category/industry/

http://www.propakistani.com/category/other/government/

http://www.propakistani.com/category/cellular/

http://www.propakistani.com/category/cellular/

http://www.propakistani.com/2008/12/29/some-facts-about-pakistan-telecom-industry/


http://haisum.info

2009

Pakistan Telecom Sector successfully implemented the Mobile Number

Portability (MNP) and Pakistan became first country in South Asia to have MNP

There is a Consumer Protection Directorate (CPD) at PTA to protect telecom

consumer from illegalities

Almost 92% of Pakistani Population has access to telecom services

Total teledensity of Pakistan for Cellular, fixed, WLL was 60.4 percent (till

October 2008)

Total Mobile Subscribers in the country were 90.5 million with cellular teledensity

of 56 percent (as of October 2008)

Total fixed line subscribers stand at 4.4 million

PTCL shares more than 90 percent share in Fixed line market

There are total of 2.3 million Wireless Local Loop subscribers in country, WLL

teledensity is 1.5 percent

Total number of payphones working in the country, both fixed and wireless are

449,121

Total broadband subscribers in Pakistan are about 170,000

Total dial-up users in Pakistan are almost 3.7 million

Telecom sector of Pakistan shares almost 2 percent in National GDP

In 2007/08 Telecom sector fetched a total of US$ 1,438 million Foreign

Direct investment, that counts 27 percent of total FDI coming in the country

Total Investment made during 2007-08 in all segments of Telecom Sector was

about US$ 3,113 million

34

http://haisum.info/


http://haisum.info

2009

Total Telecom revenues of Pakistan in 2007-08 reached Rs.278 billion, which

were 18 percent more than previous year

Mobile Cellular Companies share 56% of total telecom revenues

Telecom sector is also a major contributor to national exchequer7 and deposited

more than Rs.111.63 billion only in year 2007-08

Telecom sector submitted a total of Rs.44.61 billion as GST/CED to Federal

Board of Revenue in 2007-08

Sources: (PTA, 2007) and (Atta, 2008a)

References

Afzal,M. 2009, Telecom Industry, P.1 of 1, March 2009, Last modified on April 22,,2009,

Accesed 8th May 2009,

http://telecom-grid-pakistan.googlegroups.com/web/Telecom+Industry+--+Mar+09.mht?

gda=xi35alAAAADtMOj2qrYsNWGxA5pa5bwtOb8vJJoP6p1UVrf-

5iiCtRavpkz_dE2TvlMip6cvaYI01Gw0X_4JUbjDaAxz-uI5bcVT3VtYGKLco-_l-8AzjQ.

Atta,A. 2008a, Some Facts about Pakistan Telecom Industry, p.1 of 1, December 29,

7According to Wikipedia: Part of government that helps in collecting revenues

35

http://haisum.info/


http://haisum.info

2009

Accesed 8th May, 2009, http://www.propakistani.com/2008/12/29/some-facts-about-

pakistan-telecom-industry/.

Atta, A. 2008b, World Telecom Day - Facts about Pakistan Telecom, P.1 of 1,

December 27th, 2008 at 1:54 am, http://greenwhite.org/2007/06/29/career-prospects-in-

the-telecom-industry-of-pakistan/.

Bakai, N. 1999, Data taken SE Asia Workshop on Internet: South Asian Realities and

Opportunities, April, Pak Telecom, Dhaka, Pakistan, Accessed: 9 th May 2009,

http://www.callpakistandirect.com/CallPakistan/pakistan_telecom.html.

Bhatti, B. 2007, WLL: Market Overview and Trends in Pakistan, CDMA,

Telecommunications, WLL, Wimax, Wireless, P.1 of 1, Published on August 15, 2007,

Accessed: 9th May 2009, http://telecompk.net/2007/08/15/wll-market-overview-and-

trends-in-pakistan/.

Callpakistandirect.com 2009, Pakistan Telecommunication History, P.1 of 1, Accessed:

9th May, 2009, http://www.callpakistandirect.com/CallPakistan/pakistan_telecom.html .

Khan,S. 2009, Career Prospects in the Telecom Industry of Pakistan, P.1 of 1,

Published: April 28th, 2009 at 9:21 pm, Accessed: 9th May, 2009,

http://greenwhite.org/2007/06/29/career-prospects-in-the-telecom-industry-of-pakistan/

Atta 2008a, Op cite P.6.

NTCPK 2004, Mobile Companies Review, May, P.1 of 1, Accessed: 8th May, 2009,

www.ntcpk.com/.

Pakistan Telecommunications Authority 2003, De-Regulation Policy for the

Telecommunication Sector, Ministry of Information Technology IT & Telecommunication

36

http://haisum.info/


http://haisum.info

2009

Division, July 13th , P.5-6. Downloaded from: http://www.pta.gov.pk/index2.php?

option=com_content&do_pdf=1&id=441.

PTA 2007, Annual Report 2007-2008, Economic Performance of Industry, Chapter 1,

P.2., Published: 5th June, 2009, Downloaded from: http://www.pta.gov.pk/index2.php?

option=com_content&do_pdf=1&id=1033.

PTA 2007, Op cite P.6.

Atta 2008a, Op cite P.6.

PTA 2008, Telecom Economic Indicators, P.1 of 1, Updated: April, 16th 2009,

Accessed: 8th May, 2009, http://www.pta.gov.pk/index.php?

option=com_frontpage&Itemid. =1

Saeed,S. 2003, Pakistan – Markets in IT & Telecomm Convergent Technologies, p.2 of

2, April 2003, Accessed on 9th May 2009, http://www.the-south-asian.com/April

%202003/Pakistan%20IT%20markets-technologies-2.htm .

Saeed, Op cite P.11.

Ibid, P.11.

Telecompk.net 2009, VoiP in Pakistan, P.1 of 1, Accessed: 9th May, 2009,

http://telecompk.net/service-providers/.

PTA 2008, Op cite P.15.

Wikipedia 2009, Pakistan Telecommunication Company Ltd, No publish date Available,

Last modified, as cited by Google Chrome: 8 May 2009, at 15:57 (UTC),

37

http://haisum.info/


http://haisum.info

2009

http://en.wikipedia.org/wiki/Pakistan_Telecommunication_Company.

Ibid, P.19.

Ibid, P.19.

Ibid, P.19.

Glossary

i. 3G

38

http://haisum.info/


http://haisum.info

2009

It’s a Mobile phone communication standard that supports higher data rates than 2G

(The technology used in GSM/GPRS based services).

ii. Broad Band

A variant of DSL, with more speed than DSL or ISDN works on the pre-laid telephone

lines as of PTCL

iii. DSL

DSL is a family of technologies that provides digital data transmission over the wires of

a local telephone network. DSL originally stood for digital subscriber loop, although in

recent years, the term digital subscriber line has been widely adopted as a more

marketing-friendly term for ADSL, which is the most popular version of consumer-ready

DSL. DSL can be used at the same time and on the same telephone line with regular

telephone, as it uses high frequency, while regular telephone uses low frequency.

iv. EDGE

Enhanced Data rates for GSM Evolution (EDGE), Enhanced GPRS (EGPRS), or IMT

Single Carrier (IMT-SC) is a backward-compatible digital mobile phone technology that

allows improved data transmission rates, as an extension on top of standard GSM.

EDGE is considered a 3G radio technology

v. GDP

The gross domestic product (GDP) or gross domestic income (GDI), a basic measure of

an economy's economic performance, is the market value of all final goods and services

produced within the borders of a nation in a year.

39

http://haisum.info/


http://haisum.info

2009

vi. GPRS

General packet radio service (GPRS) is a packet oriented mobile data service available

to users of the 2G cellular communication systems global system for mobile

communications (GSM), as well as in the 3G systems. In the 2G systems, GPRS

provides data rates of 56-114 kbit/s.

vii. Growth Rate

It is Year-over-year change, expressed as a percentage.

viii. ISP

An Internet service provider (ISP, also called Internet access provider, or IAP) is a

company that offers its customers access to the Internet. The ISP connects to its

customers using a data transmission technology appropriate for delivering Internet

Protocol datagrams, such as dial-up, DSL, cable modem or dedicated high-speed

interconnects.

ix. Tele-density

The number of landline telephones in use for every 100 individuals living within an area.

A teledensity greater than 100 means there are more telephones than people. Third-

world countries may have a teledensity of less than 10.

x. Telegraph

A communications system that transmits and receives simple unmodulated electric

impulses, especially one in which the transmission and reception stations are directly

connected by wires.

40

http://haisum.info/


http://haisum.info

2009

xi. Wi-MAX

WiMAX, meaning Worldwide Interoperability for Microwave Access, is a

telecommunications technology that provides wireless transmission of data using a

variety of transmission modes, from point-to-multipoint links to portable and fully mobile

internet access. The technology provides up to 3 Mb/s broadband speed without the

need for cables.

41

http://haisum.info/

54219071 Telecom Industry of Pakistan

Documents

Transcript of 54219071 Telecom Industry of Pakistan