Wednesday, June 27, 2012

Chairman PTA and fall of telecommunication in Pakistan

Chairman PTA and fall of telecommunication in PakistanChairman PTA – Dr. Mohammad Yaseen – whose four year tenure is about to expire in next few months is losing the moral support of his team on account of weakening state of telecommunication sector in Pakistan.
Dr. Yaseen, who also enjoys an Australian nationality is expected to face heavy criticism over an unsuccessful tenure being a custodian of telecommunication in Pakistan.
According to reports, despite having 22 years of extensive experience of various fields in telecommunication (as the profile suggests), Dr. Yaseen silently witnessed a sharp decline in the telecommunication sector of Pakistan – worst in the last ten years.
Once far ahead of India, the cellular industry in Pakistan witnessed a bumpy ride such as average Revenue Per User (ARPU) that was nearly $ 6 per month back in 2006 has dropped down to mere $ 2 per month in 2012.  Foreign Direct Investments (FDI) have dried up terribly. Telecom investments were highest during 2005 – 2008, the investment figure peaked in 2006-07 with a total amount invested in Pakistan telecommunication sector as $ US 3.97 billion having FDI up to $ US 1.84 billion.
Telecom investments fell down to $ US 495 million in 2010-11 and recorded a de-investment in the telecom sector up to $ 253.3 million as several telecom operator decided to pull out the investment due to unfavorable investment conditions in Pakistan.
The only hope of attracting FDI in Pakistan died with the inability of PTA to conduct 3G licensing in the country. Mobile Cellular Policy of 2004 had highlighted the importance of 3G services in Pakistan, as per policy guidelines,  3G licensing was to be conducted in 2006. Even after 6 years of delay, the telecom authority has remained unsuccessful in implementing the rules of the business.
An official of the PTA on the condition of anonymity told MORE that, the entire team of PTA is depressed with a lowest morale ever. No one at the authority is happy over its performance as the watch dog has lost its charm and strength.
Unlike past, PTA has failed miserably to enforce very basic rules that are mentioned in the books. Recent examples show that authority could not handle the menace of unregistered SIMs despite of heavy media campaigns and tall claims. The fact is evident from latest hearing of Supreme Court with reference to illegal usage of mobile phones SIMs in Baluchistan. Despite of clear directions from the apex court in May 2012, PTA hasn’t been able to convince the cellular operator on this sensitive issue. Supreme Court had directed PTA to implement 5 SIMs against single CNIC mechanism.
Similarly, Supreme Court had ordered last month to immediately stop the Inaami Schemes as they are un-Islamic act and promoting gambling. PTA passed on the direction to telecom companies through an interim-order which was turned down by the cellular operators as they found it more appropriate to seek a stay in their favor from Islamabad High Court.
On the issue of 3G, although, Chairman PTA participated in several conferences and seminars, visited number of international destinations on government’s expense supposedly to lure the foreign investors but all his presentations have remained unimpressive bringing no results in the end.
The seriousness of the authority is very much evident from the “Investment Opportunities” section of its website which still offers statistics of 2007 as the latest data for the investors.
Chairman PTA and fall of telecommunication in Pakistan
Whereas, on the website PTA’s vision can be found as;
Chairman PTA and fall of telecommunication in Pakistan
Industry analysts say, all big players including Vodafone and Orange refused to participate on account of weak performance on the part of PTA and ministry of information and technology (MoITT) with the following being the prominent issue;
  • Dispute with Etisalat over the issue of US $ 800 million installment
  • Cancellation of Instaphone license
  • Undue favors to significant market player(s) (SMP)
  • Unbalanced price war among operators
An official of the PTA revealed that “authority did not handle the 3G licensing issue professionally. The Chairman, being an Australian national, has always pushed us to follow Australian telecom model. Whereas, ground realities in Pakistan are different and require its own strategy. It is highly expected that 3G may not come into Pakistan even in 2013″.
Statistics show, when Dr. Yaseen took charge of the authority in 2008, the cellular subscriber base in Pakistan was 90.5 million with a teledensity of 60.4%. Today, the subscriber base stands at 118 million. If 5 SIMs against one CNIC formula is implemented, the subscriber base will come down to under 100 million raising question on the performance of Dr. Yaseen. It all depends upon the next hearing of the Supreme Court.
And if it does happen, what accomplishment chairman PTA will record at the end of his 4 year tenure.
It is interesting to note that Chairman runs his own blog that displays number of achievement awards that he has received due to his visionary leadership. A screen shot is mentioned below.
Chairman PTA and fall of telecommunication in Pakistan
Few of the issues mishandled under the chairmanship of Dr. Mohammad Yaseen;
  • Unable to convince foreign investor for 3G licensing in Pakistan
  • Authority could not start MVNO (Mobile Virtual Network Operator) due to heavy license fee and biased attitude
  • Unable to recover installment from PTCL
  • Vague definition of Active SIM causing an artificial bubble of cellular subscriber base
  • Unable to stop/regulate Chinese mobile phones despite of availability of type approval guidelines
  • Poor Quality of service (GSM, Broadband)
Inability to control SPAM on mobile phones (SMSes) despite of existing draft. Thus, depriving industry of much needed mobile ad revenue

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