Telecoms, internet in Pakistan

After Multinet and Dancom (both with Malaysian investors, though Dancom has been sold to Orascom after a fiasco to do with a mismanaged WLL bid), looks like there are some more investors are coming into the ISP sector. The more the merrier for the consumer.

I presume that media used will be wireless or cable. PTCL copper is not worth the hassle.

Business Recorder

JAVED MIRZA
KARACHI (February 13 2007): Three Middle Eastern and Far Eastern Internet Service Providers (ISPs) are taking position to launch their operations in Pakistan with an aggregate investment of $150 million. Sources said that two of the companies would be launching their full-fledge operations while on of the companies would be acquiring an existing ISP.

The intending companies have already applied for the licenses and hopefully, the licenses would be awarded by the end of these years. Each of the ISPs would be investing $50 million to kick off their service in Pakistan, which is expected to be started within two years.

Sources further informed that these intending ISPs are already preparing the feasibility reports and assessing the market. Invent of these service providers would generate direct employment for at least 5,000 people.

It was also learnt that all these three ISPs would start their operations simultaneously at 90 destinations throughout the country. The country is quite underdeveloped as far as Internet penetration is concerned.

According to the latest data available the Internet penetration stands at 8.0 percent with around 15 million Internet users. However, the current penetration would be doubled within next four to five years, as some 12 million users would be added during this period.

Presently, around two dozen ISPs are operating in the country with 128Kbps bandwidth benchmark, which is quite thin as compared to the developed countries even India is far ahead in this technology.

However, according to sources, these new ISPs planning to operate at 512Kbps bandwidth would spark the competition between the service providers and resultantly 512Kbps bandwidth would be set as the benchmark.

The Middle Eastern and Far Eastern ISPs would be providing DSL, Hybrid Fibre Coil (HFC) and wireless broadband excess to suit the requirements of all quarters of the society.

Sources informed that these firms were preparing feasibility reports and assessing their target market to avoid the consequences faced by the existing ISPs, which could not register big success stories, as they lacked proper study and knowledge of the target markets and user requirements.

Copyright Business Recorder, 2007

TMCnet

Telenor Pakistan (Pvt) Ltd. has awarded a contract to Huawei Technologies to build a nationwide all-IP based Dense Wavelength Division Multiplexing (DWDM) network.

According to Peter Anthony Dindial, chief technical officer of Telenor Pakistan, the company is pleased to continue its business relationship with Huawei by adopting its DWDM technology.

Dindial said that the selection of the right product is crucial for a rapidly growing operator such as Telenor Pakistan in a competitive market. Telenor Pakistan has therefore selected a solution that meets the requirements for their rapid growth and smooth business development and ensures a continued evolution of their network.

“We are honored to be selected by Telenor Pakistan to build its nationwide DWDM network after we have successfully passed its rigid test and we believe this is a win-win situation,” said Ding Shaohua, senior vice president of Huawei in a press release.

Shaohua said that this contract reaffirms Huawei’s position as the world-leading transport network supplier and believes the successful collaboration of the two companies will be providing the world-class technologies and state-of-the-art services to the consumers of Pakistan.

Huawei has also partnered with other global tier-one telecom operators including British Telecom, KPN and Telecom Italia to provide its future-oriented and innovative bearer network solutions.

Huawei made news last month for entering a partnership with CounterPath Solutions , Inc., a provider of VoIP (Voice over IP) and Video over IP SIP (Session Initiation Protocol) softphones to provide enriched services for global telecom network operators based on the IP Multimedia Subsystem (IMS).

Telenor Pakistan is a wholly-owned subsidiary of Telenor ASA. Telenor Pakistan launched its GSM/GPRS services in March 2005 and has become the 2nd largest cellular network by reaching more than 1100 destinations with over 7 million subscribers in Pakistan.

Huawei Technologies provides next generation telecommunications networks. The company is committed to providing innovative and customized products, services and solutions to create long-term value and potential growth for its customers.

By Syed Fazl-e-Haider

QUETTA, Pakistan - Telekom Malaysia announced this week that the company is set to complete its US$100 million countrywide fiber-optic-backbone project in Pakistan - the largest fiber-optic network in the country - by October.

In February 2005, Telekom Malaysia announced a joint-venture fiber-optic-backbone project with Multinet, a licensed provider of electronic information and data-network operation services in Pakistan. Its activities include local loop and other value-added services, such as broadband, wireless broadband and allied services. The deal was concluded in April 2005. Through its international arm, TM International, it has telecom investments in Pakistan, India, Bangladesh, Sri Lanka, Thailand and Cambodia, with evolving plans to expand into other parts of Asia.

more…

Of course PTCL has 1700Mbps of unused (spare, hoarded, unsold) bandwidth coming in off FLAG and the SE-ME-WEs. Reducing the wholesale price would mean using this, surely that way lies madness…..

PTA is still focussing on buying bandwidth when the time has come to start creating bandwidth. ISPs should be made to interconnect, much in the same way that phone companies are. That way more revenue is earned by Pakistani companies, we are likely to have hosting startup here, more jobs for IT graduates…. Interconnects mean free bandwidth for ISps. But who wants free bandwidth? More madness…..

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PTCL denies bandwidth rate cut

By Imran Ayub

KARACHI: Pakistan Telecommunication Company has denied rate cut for its international bandwidth service despite announcement in June 2006, as the privatised entity reveals in a plea it has not received any circular from an international consortium, which operates undersea fibre cable link.

Sources in telecom said local companies including Internet service providers and other telecom service operators recently approached the PTCL about non-implementation of its June 2006 orders, which had cost them more than $5 million in six months, the concerned department denied to charge reduced tariff, saying the international consortium FLAG (Fibre Link Around Globe) has not issued any notification about tariff revision.

“It is to inform you that we have no written evidence circular from our tariff department regarding the revision of tariff for IP transit FLAG VPOP connectivity,” a source quoted a letter from the PTCL’s international revenue department when it was questioned over higher tariff by one of the local operators.

“Therefore we can not bill customers on reduced tariffs without objective evidence,” added the PTCL letter.

The sources said the ISPs and other telecom service providers were making regular payments in accordance with the reduced tariff for international bandwidth but in a surprise move they started receiving arrears for the monthly advanced bills against IP transit and FLAG services.

“The ISPs and other companies later approached the PTCL but instead any positive any response the PTCL started issuing notices for payments without furnishing the reasons of accumulated arrears as against the regular release of timely payments,” said the source privy to the PTCL and ISPs negotiations.

The PTCL in June last announced to cut international bandwidth rate from $76,000 per two megabits a month to $60,000 as a first move after the Etisalat took over the management control after the company’s privatisation.

The decision attracted appreciation from the local telecom industry as the announcement also included tariff cut of FLAG services. However, now the telecom operators say they have started receiving bills with arrears that defines their previous bill payment, which were paid in line with the reduced tariff rates.

“To avoid dislocation of our services the international revenue PTCL was again approached with the request dated to provide the details or reasons of accumulated arrears,” said one of the operators, who wished not to be named.

“Finally we received a communiquÈ from the PTCL which says they have no written evidence from the FLAG to offer reduced tariff.”

He questioned the PTCL claims and said the FLAG Telecom representative had already officially communicated their agreement for the reduced same prices.

“The PTA (Pakistan Telecommunication Authority) has already showed concern over the PTCL tariff rate and the recent approach of the company would hit the industry interest, which is already bearing higher cost of doing business in Pakistan,” he added.

“In the best interest of supporting broadband services in the country the PTCL high ups and the regulator itself should intervene and issue directives to the department concerned for implementation of long pending reduced tariff effective June 2006.”

This is quite interesting because Paktel is the first International company bought by China Mobile, the world’s biggest wireless carrier by market capitalisation.

other links:
Xinhua
Financial Express, India
Light Reading
Reuters

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China Mobile takes control of Paktel

The News, KARACHI: China Mobile is set to enter into Pakistan’s cellular industry, as the Asian telecom giant has reached a $284 million deal with the Luxembourg-based Millicom International to acquire its operations in Pakistan Paktel, one of the six cellular operators in the country.

Sources in telecom said the Millicom International, which operated both AMPS and GSM cellular services through Paktel in Pakistan had formally announced the deal to finally wrap up its more than 15-year operations in the country.

“Millicom International has signed an agreement for the sale of 88.86 per cent shareholding, in Paktel Ltd to China Mobile Communications Corporation,” said a Millicom International statement.

“The transaction implies an enterprise valuation for Paktel Ltd of $460 million. The total cash consideration payable to Millicom as a result of the transaction (including the repayment of inter-company debt) is approximately $284 million.”

It said the completion of the transaction is subject to certain regulatory approvals and procedures and if such requirements were met, conclusion of the deal was expected to occur in late February 2007.

“Now the two parties would formally approach the telecom authorities in Pakistan to get a nod over the deal,” said a source close to the Millicom’s operations in Pakistan. The Millicom authorities in November 2005 announced that they were discussing the sale of one of its Pakistani units.

The same month Millicom, reported earnings before tax, depreciation and amortisation of $110.8 million, below the $117.6 million of the same period of 2004 and its shares were 3.09 per cent higher at 150 crowns after the figures.

In January 2006, Millicom International said following high number of unsolicited approaches its board of directors decided to conduct a review of strategic options for the company and appointed Morgan Stanley as financial adviser.

“With the sale of Paktel, Millicom telecom operation in Pakistan started in 1990 has become a history as it has already sold out its shares in Instaphone to local partners,” said the source. He said China Mobile was very much interested in Pakistani cellular market and also attempted to get a GSM licence in an open auction in 2003,” he added.

With more than 250 million wireless customer accounts as of last month, China Mobile is by far the world’s biggest wireless carrier and controls about two-thirds of the mobile market in China. “The move may trigger new kind of competition in the merging telecom markets including, Pakistan,” said the source.

“China Mobile has built one of the most extensive national cellular networks in the world, covering all of mainland China and the company’s strategy clearly shows that its target market is Asia and other emerging telecom markets.”

He said though Millicom’s Pakistan operations was not in a very attractive position, still the country offered one of the best business opportunities to telecom operators, as its most of the rural areas were without basic telecom facilities.

“By December 2006, Paktel enjoyed 1.3 million, which ranked the company at fifth in terms of market share among six cellular operators with total 48.50 million cell phone users across the country,” added the source. He said for China Mobile, Pakistan was among emerging markets, which represented a particularly attractive destination for telecom companies as western markets become saturated.

“In many developing nations, including the fixed-line infrastructure is poor and limited in its range, so cellular networks, which are cheaper to roll out than traditional lines, are used as the primary means of communication,” added the source.