Announcement

Collapse
No announcement yet.

It never stops ringing: booming telecom bonanza

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    It never stops ringing: booming telecom bonanza

    Billions of dollars of FDI flooding into Pakistan, and a potential 50 million cell phone users in a few years.

    http://www.jang.com.pk/thenews/may20...ain/main19.htm

    It never stops ringing: booming telecom bonanza

    Nadeem Malik

    ISLAMABAD: The telecom sector in Pakistan is growing at a spectacular pace with future forecasts indicating increase of one million mobile users every month, rapid expansion in wireless sets and more competition in the fixed-line telephony with the privatisation of state-owned giant Pakistan Telecommunication Company Limited (PTCL) on June 10, 2005. The GSM Association, the global trade association for GSM mobile operators, has projected a market size of 50 million mobile phone users in Pakistan within next 3-5 years, from the current base of about 10.5 million. The launching of Telenor and Al-Warid would accelerate the expansion and competition for the benefit of the consumers, with world renowned companies, like Nokia and Ericsson providing network support.

    The mobile operators are also expected to invest one billion dollar a year over the next five-years to upgrade and roll out networks. This $5 billion investment in capital expenditures would be in addition to the US$291 million investment per operator for network licenses. The total teledensity, as a result, has jumped from 2.14 percent in 1996-97 to 10.37 percent by April 2005, including 3.33 percent in fixed, 6.91 percent in cellular and 0.13 percent in wireless. In a country where flow of the Foreign Direct Investment (FDI) totalled just $970 million last year, the telecom impetus is also expected to facilitate investment in other sectors of the economy as well, provided domestic political and security situation remains stable. The private operators have also secured investments for network equipment through the Export Credit Agencies opening up the ways for future flows in various other investment-starved sectors of the economy.

    Out of the six licensed mobile operators, two new entrants are just rolling out their infrastructure across the country, with just Al-Warid to cover 28 major cities on the launching day. Telenor had already been penetrating the market with a share of 0.65 million within weeks. The other four operators are in expansion mode, with the market leader Mobilink controlling over 65 percent of the market share, followed by PTCL subsidiary UFone at about 22 percent. Paktel and Instaphone have a combine share of about 12 percent. The cellular bonanza has attracted companies like Nokia and Ericsson to Pakistan with plans to stay here for a long haul to capture a higher market share. Ericsson, a leading GSM supplier, with 40 percent market share in the world, has signed managed services contract with Warid for a complete turnkey GSM/GPRS solution, comprising the supply of core and radio network equipment, as well as complete network design, rollout, operations and maintenance. Same is true for Nokia, and ZTE (China), which is seeking new loans worth 30 billion Yuan to fund its ambitious overseas operations, including in Pakistan.

    These numbers do not include the wireless local loop (WLL) phones, which have just added a new dimension to the growing telecom sector of the country. Although the GSM operators are not happy with the induction of WLL technologies, it would afford opportunity to many rural consumers to have low cost phones. So far, over half a million WLL subscribers are connected to the PTCL's system.
    The fixed-line sector, where PTCL has total operative lines of 4.46 million, is also heading towards an explosive growth rate very shortly. The Privatisation Commission has set June 10, 2005, as the bidding date for the 26 percent stakes in the company. The leading telecom firms from around the world, like Malaysia, Singapore, China and Saudi Arabia are keen to buy it. In addition, new fixed-line licenses have been issued. This is not all. The companies like Ericsson and Nokia are also hiring locally. Ericsson has 350 direct employees and 1100 indirect employees. Nokia plans to engage local IT experts in its global operations. Egypt's Orascom Telecom Holding, owners of Mobilink in Pakistan, has formed two fully funded subsidiaries to build and operate undersea fibre optic cables to further expand its non-GSM Telecom Services segment. The undersea cables will connect Algeria and Pakistan, two countries where OTH has GSM operations, with international telecommunications hubs. OTH has selected Alcatel Submarine Networks and Tyco Telecommunications to supply infrastructure for the two new subsidiaries. A subsidiary of Orascom will deploy a 1,200 kilometre 20 Gigabit per second undersea cable system to connect Karachi to Fujairah in the United Arab Emirates. The new company holds a 25 year non-exclusive license, granted in 2002, to establish, maintain and operate a private fibre optic landing station and sell capacity to licensed operators in Pakistan. The operation of this system is to commence in the second half of 2005. The owners of Warid Telecom, the Abu Dhabi Group, owned by Sheikh Nahyan Mubarak Al Nahayan, also have substantial shareholding in Bank Alfalah and United Bank Limited (UBL). The Group is also expected to expand its business interests in the country further in the LDI and other telecom services. This phenomenal turnaround, from a low base, has also enhanced share of the telecom sector in the overall GDP to 1.93 percent. Its share in the foreign investment stands at 22 percent last year. According to Pakistan Telecommunication Authority (PTA) it created 0.33 million new jobs in the country. Total telecom revenues increased from Rs91.1 billion in 2002-03 to Rs110.1 billion in 2003-04, with mobile revenues up by 55 percent.
Working...
X