Where is 3G?
(Flare (Pakistan) Via Acquire Media NewsEdge) 3G licence auction in Pakistan has been a hot topic for the last 8 years, but the debate flare up during the current year 2013 as the people of Pakistan in the May 11general elections have given their verdict in favour of PML-N by giving them clear cut 2 /3 majority, thereafter, the expectations of people increased to manifold and they want the resolution of their problems over night.
As the new Government of PML-N is formed in Pakistan, it is quite obvious that their last two tenures produced business friendly results and it is expected once again from them. Telecom sector is the one bringing huge sum of revenues to the government in the form of Value Added Taxes. Government already knows how important it is to develop Telecom sector of Pakistan. One key opportunity that the previous governments failed to capitalise upon is the introduction of third-generation (3G) technology. Now is the best time for the government to carry out the auction and take full advantage of the opportunities present.
The radio frequency spectrums that are still unassigned are 30 MHz in the 1900/2100 MHz band available for 3G licence while 7.38 MHz availability in the band of 800 MHz (due to Instaphone non-functionality). It implies that government can conduct a 3G licence auction within the next 6 months and New Year 2014 will see Pakistan among 3G operating nations (the world will be using 5G).
But, when we put a glance over the canvas, the performance of the incumbent ruling party looks dismal and shaky; no doubt the country is in the mid of never ending problems, while the newly sworn-in government is in the days of its infancy but during its election campaign, they have given words taller than the Minar-e-Pakistan and what they have deliver in the last two months is below par.
Keep the rest in disguise, consider the only sector of telecommunications for instance, the two months tenure has seen the continuation of the same old policies of the PPP government and the same tactics of lingering issues; they try to find lame excuses but to not go for solution; the 3G rollout delay, telecom policy, Ministry of Information Technology, Telecom performance and Pakistan Telecommunication Authority (PTA) headlessness and unprecedented rise in taxes on cellular users are the indicators which show a lot of resemblance between the current and the previous regimes.
During the PPP government, PTA could not exploit this billion-dollar opportunity in 2012 because political condition of the country was not conducive. PTA made their first effort back in January 2012 and it has to be delayed because opposition to the government regarded this auction as a “loot sale” and then again it was out of the shadow due to contempt of court case against the Prime Minister in February.
The new Prime Minister seemed eager to carry out this auction in his term and PTA’s second attempt was in August 2012. They tried to hire a firm that will provide assistance in the bidding process and will help this auction complete by October 2012 but PTA fell short of doing its proper homework and participants of the bidding lost interest as a result.
The third and final failed attempt was made when an “Independent Advisory Group” was hired by the authorities. IAG consisted of well reputed telecom experts who were famous for their services internationally and they were to conclude the auction of 3G licence in Pakistan within a span of three months. This IAG was formed in November 2012 but this could not bear any fruit as the contracts were dissolved and this time intervention was from NAB. They pointed out that the procedure involved PPRA rules’ violation and consultants who already started working on this project are unpaid till date.
In order to get this mammoth task done, the new government of PML-N will have to make sure that the auction process is transparent and competitive bidders should be invited to auction. PTA must have their own high level professionals rather than going for international experts to carry out the auctions for them.
According to PTA ex-Chairman, due to the delay in the auction, government is bearing a daily loss of Rs.38 million. Ministry of IT estimates that this auction could bring Pakistan more than $1 billion in the shape of license fee and an additional $1 billion can be raised by development of the infrastructure of the industry over a period of two years. It could create an opportunity of employment as well and more than 50,000 people could join this industry if 3G rolled out.
With the elapse of 6 months of the advertisements published in national newspapers for the posts of high profile officials including PTA Chairman. MOIT, government of Pakistan failed to fill the posts. PTA main function is to regulate the establishment, operation and maintenance of telecommunication systems and provision of telecommunication services licences and resolved its related issues.
As per constitution of PTA, without Chairman the authority is nothing and can take no important policy level decision regarding anything. Chairman’s post is vacant since January 15, 2013 whereas the posts for Member Finance and Member Technical are awaiting appointment since January 21, 2013 and March 15, 2013 respectively. Practically PTA is unable to take any kind of regulatory decision since there is no Chairman of Authority.
It is pertinent to mention here that PTA was dysfunctional for the last one year as the previous PPP led coalition government failed to appoint chairman and member technical and member finance to smoothly run the authority affairs.
The regulator was in the limelight for wrong reasons; issues were related to corruption, nepotism, the intentional delay in 3G auction, the formation of most controversial International Clearing House (ICH), ever increasing grey traffic and the presence of pornographic and blasphemous material on internet.
It is no secret that authority is not functioning on various fronts that include industry regulation, enforcement, etc. due to absence of members and the chairman.
Staff is not paid the bills, daily expense, medical facilities and several other allowances and payments. It merits mentioning here that all kind of bills at PTA are cleared only after the approvals from inactivity, PTA is all-together unable to regulate industry issues.
Officials from Ministry of Information Technology and Pakistan Telecom Authority said that no advancement had been made in terms of launching or policy making for 3G technology. Director General Extensions Pakistan Telecom Authority Sajjad Latif categorically said that only PTA had the authority to take any policy level decision regarding issuing of licences and this could not be done without the presence of Chairman and other members mentioned above.
But he said that State Minister for Ministry of Information Technology Anusha Rehman was heard to be very active these days. She was holding meetings with the stake holders on daily basis to make the process more transparent. But still she could not take decisions beyond a certain limits.
Sajjad Latif said that PTA had advertised the posts and was receiving applications. It might take 3 or 4 weeks to fill these seats and then PTA would be again able to take part in the policy making process for the issuance of licences. He also said that at the moment PTA was even facing difficulties in the implementation of already made policies. On the other hand, the telecom sector is on its road to progress despite the current loads of problems; cellular users in Pakistan crossed the mark of 125 million users.
A 10 percent growth in broadband penetration leads to a 1.3 percent growth in gross domestic product of a developing country, according to a World Bank study. IT experts often quote this study to make their case for broadband penetration but it is about time Pakistan can prove if the study is accurate. The country, as announced by Minister of State for IT and Telecom Anusha Rahman, is rolling out third generation (3G), or even advanced 4G, mobile spectrum technology this year.
With a cellular subscriber base of over 125 million, Pakistan’s mobile penetration is reaching close to 70 percent – this also includes multiple SIM users. The country has 30 million internet subscriptions, of which 50 percent access the internet through their mobile phones.
These figures, along with other statistics reflect a positive outlook for the country’s technology sector now heading for 3G and 4G. The introduction of high-speed mobile internet, according to industry experts, will not only attract investment, but also boost internet penetration, increase smartphone usage and boost the growth of local IT content. In short, it will provide the spur for the growth of digital economy.
Besides investment, industry experts say, the introduction of high-speed mobile internet is expected to increase the growth of internet economy.
The 3G/4G technology will be an enabling factor for the growth of e-commerce and digital economy, said Afaque Ahmed, Member of Pakistan Software Houses Association for IT and ITenabled services.
“The mobile internet penetration can increase manifold with the launch of high-speed mobile internet,” he said. At present, the mobile internet penetration is about 12 percent, according to the Pakistan Telecommunication Authority.
Explaining, Ahmed said many people do not use mobile internet mostly because of slow connectivity on GPRS mode while majority of those using mobile internet depend on Wi-Fi connectivity. This will change if there is high-speed internet, he said. The telecom operators have invested heavily in infrastructure and are in a position to bring internet revolution in the country, Ahmed said. It is only a matter of time as mobile networks cover 92percent of the geographical land of Pakistan.
He said the smartphone penetration will increase after the launch of 3G/4G technology – the smartphone penetration in the country is about 15percent. Firstly, the demand for 3G-enabled mobile phones will increase. Secondly, the price of smartphones will decrease to as low as $50 (Rs5,000). “Today, you can buy a smartphone for Rs10,000,” he said.
While high-speed mobile internet will result in an increase in the usage of smartphones, the latter will create demand for local applications. “Bandwidth price is going down, smartphones are becoming cheaper and then you have 3G coming. So the name of the game will be the local content,” Google’s country consultant Badar Khushnood has said.
People have already tried basic internet, they know there is a lot of content available to consume for every class of consumers, Khushnood said, all they need is high-speed internet.
“The country is at a turning point as the real growth will come now,” Khushnood said while referring to the digital economy. “The country will leapfrog with 3G/4G technology just like it had by switching from CDMA to GSM,” he said.
The PML-N vision under title “Strong Economy, Strong Pakistan” envisages that if we develop and buildup strong economy this will trickle down benefits and Pakistan will emerge as new and strong Pakistan. Planning Commission of Pakistan is working on country’s development strategy, 2013-18 in partnership with stake holders with a focus on revival of the economy for achieving the goal of “Strong Economy - Strong Pakistan”.
The strategy is aimed at stabilizing the economy through minimizing fiscal deficit, adopting self-reliance, focusing on tax reforms, increasing investments; reviving the economy for balanced and sustainable growth through promoting private sector and transforming growth; restoring peace and security through strengthening country’s relations with all countries of the world in particular the international economic blocks as well as improving security through initiating various social and entrepreneurial programs in under developed areas; achieving good governance through institutional and governance reforms with a focus on transparency, accountability, merits in appointments, involvement of citizens at all stages of planning, implementation and monitoring, and providing speedy solution through e-governance; and developing enterprising social capital with focus on human development, poverty alleviation and youth empowerment to achieve inclusive growth for a happy and harmonious society.
If all these strategies, which are written in the PML-N future vision, implemented in their true spirit, no doubt, Pakistan will be a new Pakistan in the days to come, we are hoping for the best but the initial 2 months tenure doesn’t reflect what it has put down in future vision document.
Keeping the experts opinion in mind, the future of Telecom industry is very bright in Pakistan as the major population comprise of youth who are actively attached to internet and upcoming technologies. The youth is very interested in Smartphones but proper functionality of the Smartphones is missing due to lack of a 3G network in Pakistan. Not only connectivity will improve but the Smartphone industry and 3G together can become a major source of everyday transactions like utility bills payment, credit card transactions, online shopping as well as video conferencing on the go.
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