Pakistan’s telecom sector is amongst the most lucrative in the world, says PTA Chairman
When it comes to their regulatory body, the country’s telecommunications sector can hardly complain.
The Pakistan Telecommunications Authority (PTA) has helped propagate the use of cell phones in the country to unprecedented levels within a few years.
The sector witnessed significant inflows of foreign investment and usage rates charged to consumers in the country are relatively low compared to the regional and global average.
As the Chairman of PTA, Muhammad Yaseen has been instrumental in taking the country’s telecommunications sector to its present state.
But, far from the usual bureaucratic-style government officials that one usually expects to meet in such positions, Yaseen is an ardent supporter of free-market mechanisms.
The regulator has a strong vision for the future of this sector, but, when asked about enforcing changes within the sector, Yaseen responds: “Let the markets decide!”
Don’t fix what is not broken
Commenting on the adoption of new technologies by MNOs, Yaseen asserts “the time has come for the introduction of 3G and 4G technology in the country”.
He cites examples of other markets such as Egypt where the socio-economic environment is comparable to Pakistan in many ways.
Highlighting the success of these technologies in other countries, he asserts that “in a situation where ARPU is low, the only way to raise it is through value-addition that will bring make more options available to customers.”
But he contends that the final decision on what technologies to adopt and what time lies squarely with the companies operating in this sector while the PTA is a “technology neutral regulator” and prefers to allow the industry to map out its own progress and only steps in where it feels customers’ interest may be at risk.
“As long as the MNOs are not hurting the interests of customers, PTA does not actively regulate rates charged by them” reveals the PTA chairman, explaining that in the past when Mobilink was the only MNO in the local market, its rates were regulated much more stringently by the regulatory body, but that this practice was abandoned with the deregulation of this sector.
On the other hand, Yaseen insists that the regulator is very much involved in ensuring that customers’ complaints and feedback are heeded.
He highlights that “PTA is the only regulator in the country that has specific regulations and mechanisms in place to address customers’ grievances in the form of the Customer Protection Department (CPD)”.
Focus on low costs, newer technology
Acknowledging that costs related to infrastructure development have gone up for MNOs, he lauded recent moves by different cellular service providers to share infrastructure.
He said that not only would such arrangements help lower costs for these companies, but also they would allow better coverage across the country when service providers move into un-served or under-served areas.
“We are also pitching in wherever we can, for instance if there is any dispute over rent sharing, PTA steps in to help reach agreement,” he explains adding that “I would love to see the development of more active infrastructure.” He also highlights that penetration of service providers in the country is already quite high and that other sectors such as the financial industry are also making gains by forging partnerships with these MNOs.
When asked whether rising costs and a slower pace of growth in the number of cellular subscribers could force out some competitors from the local market, Yaseen responds, “although I personally believe that the size of the local market is big enough to accommodate all existing MNOs; still the market forces will determine the optimum number of operators for the local market”.
While Yaseen appreciates the efforts of the industry in infrastructure development, he calls on policy makers to “go into 700 and 800 megahertz spectrums as the capital expenditure required in these spectrums is relatively low and they also supported 4G technology adequately”.
The chairman explains that these bandwidths require lesser infrastructure to cover the same distance when compared to higher bandwidths.
He adds that higher spectrums can be tapped once economies of scale emerge and the use of smart phones becomes more popular in the local market.
Communication: a basic human right
“When it comes to broadband services, we believe the whole nation is currently under served and should be classified as such,” he says adding that “the operators should be subsidised to enhance broadband services in the country.”
Yaseen asserts that “communication is a basic right of every citizen so even if there is a small, secluded village in Balochistan, they should still be provided fixed line as well as broadband services.” Chairman PTA also believes that the development of the required infrastructure can be practically achieved “because in the form of USF, the funds needed are available”.
Muhammad Yaseen also highlights that enhanced coverage of telecommunications networks across the country can be leveraged to turn the country into a communication hub that can connect China and other East Asian countries to other regions.
The Chairman of the regulatory authority is convinced that the country’s telecommunications sector is nowhere near saturation and still has an impressive growth trajectory in its future.
“There are about 20 million smart phones connected to our networks at present, so any operator entering into the 4G realm can count on a prospective market among these connections,” says Yaseen, adding that “the total size of the Australian market is 20 million subscribers.” He concludes that “even if ARPU is low, the number of subscribers still provides lucrative opportunities in this sector!”
Source: BUSINESS RECORDER
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