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State of Telecom Industry in Pakistan has moved to a new address: TelecomPk.net
Please visit the new site to read these stories:
In this story I’ll review and compare the emerging telecom markets of China, India and Pakistan. Combined together these 3 neighboring countries present one of the fastest growing region for the telecom industry, making them especially attractive for investors and companies.
Read the rest of the story here.
Another post in the Disaster management technologies series. Japanese mobile telephone users may soon be warned of an earthquake in their area just before it strikes. Japan’s two biggest operators, NTT DoCoMo and KDDI have announced that they are jointly developing a system to notify customers of an imminent earthquake. Now the first question I have is: What good will it do? What will YOU do if you find out that a big earthquake is coming in 5 seconds?
And the second question is: How will this work? Read it here.
Interesting study about the telecommunication trends in Asia reveals that there’s still a lot of unmet demand in the low-income population. Read the rest of the story here.
Continuing the discussion on VOIP in developing countries and in particular in Pakistan, this post looks at the issues with regulating VOIP and the Grey telephony market. Pakistan Telecommunication Authority (PTA) defines Grey telephony as: the use of illegal gateway exchanges to bypass legal PTCL gateways and terminate/originate international traffic, including through VoIP gateways, GSM gateways, WLL phones, mobile SIMs or other related equipment. This traffic may then be distributed onwards using WLL and mobile numbers. It is claimed that gery telephony costs losses of over Rs. 3 billion annually.
More of the post is here.
I came across an interesting paper at the ITU site titled “The Future of Voice” - you can also get the paper here at State of Telecom in Pakistan. This paper is a good guide to VOIP technologies and how different countries are dealing with it. It also talks about the future growth of voice markets and the technology trends which accompany it. In my next post I’ll write about the mention of Pakistan’s case in this paper.
At a related ITU workshop on this topic on Rauno Granath, Nokia’s Director of New Growth Markets and Networks, predicted that the worldwide number of subscribers to mobile telephony will reach 4 billion by 2010, and about 80 per cent the growth will come from lower income, emerging markets.
How will the Evolution of business models evolve to reach low-income consumers? This huge rowth in worldwide mobile subscribers means new business models must be created to meet the needs of low-income subscribers in emerging markets. The illustration below is an interesting way to look at it.
Source: “Voice services in new growth markets,” presentation by Rauno Granath, Nokia.
The paper also has a good number of illustrations, tables and data.
Korea is at the forefront of mobile technology adoption and the industry pays special attention to the trends there. One example: Korean mobile carrier SK telecom is introducing google search (with advertisements) on its wireless web portal. I came across a multi-part series of interesting posts written by Kim Min-seok about future trends of mobile technologies and markets at Korea Herald, here and here. In this post I’ll present some excerpts from the sixth and seventh articles which analyze the “broad changes that Web 2.0 is bringing about in the business world.” I’d recommend reading the full articles but for those in a hurry, here are the key thoughts:
1.Mobile phone makers would like to integrate content into their own platforms instead of allowing others to control content.
2. Customers will select a service provider that has a platform which is convenient to use and enables access to diverse content and channels.
3. Hyper-customization will decide the winner.
Here are excerpts from the article (emphasis is mine):
The current consensus is that mobile terminal makers stand to gain the most from the fact that customers must first connect their devices when using content and services.
Up to now, the core elements of success of the mobile phone have been the hardware characteristics of the equipment itself, such as price, function, quality and outside design. But in Mobile 2.0, it is a means of accessing the mobile Web, not just a means of talking by telephone. This implies that design of the mobile platform embedded in the terminal is going to be important - it must enable user interfaces, UCC production and full browsing.
Due to the sharing of open operating systems and equipment middleware platforms in order to reduce costs, the possibility of functional differentiation will decrease in terms of quality and general functions. Therefore, if convenience is maximized by innovating the small screen and input device, which are regarded as the maximum constraints, terminal makers will exert a tremendous influence on the mobile service market.
Mobile phone makers, led by global No. 1 player Nokia, are trying to integrate content into their own platforms. Their strategy is to move into the content portion of the mobile value chain with convergence of digital equipment. Nokia is utilizing its powerful brand and domination to become a mobile media platform operator that provides related media content including advertisements, images and games.
In order to strengthen the competitiveness of its platform, Nokia has introduced mobile advertising platforms such as Nokia Ad Service and Nokia Advertising Connector, and developed a game platform, N-Gage.
Apple offered a service that can be used in linkage with iPhone after purchasing all the content such as TV programs and movies from iTunes using Mac. That is, media content including music, broadcasting and movies and terminal lines such as mobile phone, PC and TV are provided simultaneously. This allows us to get a glimpse into Apple’s strategy that customers can enjoy everything within the platform called Apple by providing them with total service ranging from software to hardware.
In the Mobile 2.0 age, the platform that gives value to the customer when he purchases a terminal will become one of the core purchase elements. In Korea and Japan, mobile operators such as LG Telecom and DoCoMo are considered one purchase category, and terminal makers such as LG Electronics and Sony Ericsson as another purchase category. In Europe, where the GSM system is used, terminals and mobile operators are also different purchase categories.
But in the future when terminal makers, internet portals and mobile operators all provide mobile services, the criteria for purchase will become different. The platform will become an important element, overtaking the design of the terminal or the charging system of the mobile operator. Mobile platform services offered by internet portals such as Google and Yahoo! will also compete with mobile operators and terminal makers.
Customers will select a service provider that has a platform which is convenient to use and enables access to diverse content. So they will evaluate the platforms of mobile operators, terminal makers and internet portals before they choose one they like. This is because the “prosumer” (producer-like consumer) can use open sources to create new services by combining the existing technologies. The most convenient platform, and one with the most differentiation, will therefore be the most popular.
If you enjoy reading local technology blogs like this one (or this, or this, or this, or this, or this) and enjoy contributing information and commentary on the same, we are building up a mailing group and we are calling it Pakistan Telecom Grid. The group membership is open to all and other blog authors (like TM, Mustafa and Sajjad and anyone else who care to join) will be upgraded as managers so that we’ve a collective stewardship of the collection.
About the group: An informal grid of Telecommunication and Network Services professionals and insiders of Pakistan. Inspired from the fact that the collective authors and respective audience of the relatively few technology blogs that relate to Pakistan can be team up as a virtual pool of guys with an interested in communications technologies. This assembly can be used to enhance social interaction between the members, get-together events, private discussions, rumor sharing and rumor milling etc.
Join in now.
Thanks to TM for the idea and the writeup for this post.
This post is a continuation of the Disaster management technologies series. The idea here is to present not just the commercial side of technology but also to showcase technical activities which can help save lives. This story is from Daily Yomiuri, a Japanese newspaper and it reports about plans to launch a satellite to create an emergency cell phone relay station in space by 2015. This is to solve 2 common issues (which Pakistan also faced in 2005) that after a disaster cell phones may be rendered useless due to damage to the local base station and due to the heavy call volume after the disaster which overloads remaining base stations.
The paper mentions how this effort will help:
Setting up a base station in space would ensure calls for help reach the relevant authorities in time, allow people to confirm loved ones’ safety without clogging regular mobile networks and relay calls to and from places that have lost connections.
The stationary orbital satellite with an antenna more than twice the size of any existing satellite antenna, would be used to secure mobile phone connections when ground base relay stations have been knocked out in an earthquake or other natural disasters.
Cell phones that use communications satellites are already in use, but the large size of the equipment for sending and receiving signals restricts it to users with special handsets.
This post was prompted by the response to my ten gripes post. Read it at the new site here.
CEO of Abu Dhabi Group Bashir Ahmed was recently interviewd by The News. When asked how fair has been the role of Pakistan Telecommunication Authority (PTA), he said that “fairness is a relative term and every society has different parameters for evenhandedness.”
Coming from one of the biggest foreign investment group for Pakistan, its a pretty good answer! But wait, there’s more interesting commentary:
“As far as PTA is concerned, we do have some reservations but after dealing with the authorities in Bangladesh, we found PTA much better than the regulators in other countries. But one thing that I would like to say is that while making policies, PTA should not make any discrimination. The budget or size of any company should not be kept in mind; there should be a uniform policy for all,” Tahir commented.
On the expansion plans there’s good news for the industry and for those who are looking for opportunities:
“An intensive planning is being carried out to expand our network and to further strengthen the technological base of the company.” He said that Warid would provide the latest telecom services, with compared to any other country in the world, to its customers in Pakistan.”
I think this goes well with my pervious posts about messaging and value added services. By the way, what is your guess on what our Chaudrhy saab is reading/doing - browsing breaking news, setting up a wallpaper or just reading a text message?
Chaudhry saab checking sms, originally uploaded by manitoon.
This post take a look at the Mobile Telecom Value Added Services (VAS) Market in Pakistan and India. These services add value to the standard voice service and usually drive up the revenue per user. SMS, ring tones, picture/video messaging such as greetings, games and accessing Internet or other data services (such as Telenor Edge) are common examples of value-added services for mobile phones.
All the mobile phone companies in Pakistan offer many value added services in forms of various forms of messaging, information, ring tones, music and every imaginable entertainment one can think of. There are too many of these services around to link them here but if you visit the mobile company websites you will find these services clearly advertised. Messaging and ring tones are the biggest revenue producers though I do not have numbers for the market size. I covered the messaging in an earlier post. Ring tones may evoke strong opinions from people for various (social and cultural?) reasons but if you look beyond that ring tones market has done surprisingly well all over the world. It is unclear whether 3G and Mobile web 2.0 will have a significant impact on South Asian market in the coming years.
Related to this is the recent surge of interest in Mobile Virtual Network Operators(MVNOs) which according to some media headlines means that now “Everybody Can Be a Cellphone Company”. In Pakistan PTA introduced the first MVNO framework a few days ago. As TM wrote: ”MVNO will allow a formal way to these cellular operators to sell of their network capacities to newer marketing outfits that better understand their own customer niches and can probably provider some extra value added services to their crowds.”
PixSenseis one of the few Pakistan based startups which offers an innovative product which is closely related to global VAS providers. Green and White has covered it here.
In India there are a number of upcoming startups which are tapping into this market. An article in Business Standard reports: The over Rs 4,500-crore telecom value added services (VAS) market is hotting up and players are working overtime to offer India’s 170 million strong mobile subscribers a feast of innovative services — all with an eye on increasing their market share and bottom line.
Some of the upcoming value added services mentioned in the article:
Here’s more from the Business Standard article.
Cellular News has reported that Pakistan gained 10 Million new cell phone customers in first 4 months of 2007. Not much of a news but it shows that the rate of growth is still in high gear, as TelecomPk has mentioned in previous posts, here and here.
Some points worth mentioning:
The comparative chart is courtsey of The Mobile World Briefing, the weekly newsletter from The Mobile World.
Vodafone may not be a well-known brand in Pakistan but it could change soon - here’s why: Vodafone, the top cell phone companies in Europe, have announced that they will sellreally cheap phones targeted to developing countries. How about a mobile phone for Rs 1500 with a Vodafone brand on it? As you can guess it will be manufactured in China but it will have the brand name of a top carrier. Should be much better than the low quality phones coming to Pakistan from unknown manufacturers in China!
In April Vodafone bought 52% of Hutchison Essar in India thus making their arrival in emerging markets formal. Now they are the very first big carrier who is about to compete with the handset makers such as LG and Nokia. This week, Vodafone unveiled two very low-cost handsets (US$25-45, PK Rs 1500-2700) aimed primarily at customers in emerging markets such as South Asia and Africa.
WSJ made an interesting comment on this:
Cereal and cellphones may have little in common. But wireless-service provider Vodafone Group PLC has been cruising the supermarket aisle for inspiration. The world’s largest cellphone-service provider by revenue is rolling out lines of Vodafone-branded handsets, akin to supermarkets stocking their own store-brand products alongside established brands.
Behind the move is Vodafone’s desire to drive more people to use its services, both high-speed data services in established markets as well as more basic calling and text-messaging services in emerging regions. In some cases, the handsets may be packaged with Vodafone’s or a partner’s service.
Naturally Vodafone will want to sell its new phones to Pakistani market. Look out for some interesting deals in the near future as Vodafone settles down in India and contemplates its next move. Just speculating, how does a vodafone-ufone deal sound? At least it rhymes!
BusinessWeek also covered this story - Read Vodafone’s Low-Cost Cell Phone Gambit at BusinessWeek or read the excerpts below.
Vodafone executives announced in London that the company is rolling out its own line of ultra-low-cost handsets. To be built by a Chinese partner, the GSM-standard phones will carry the Vodafone brand name and sell for $25 to $45, depending on locale.
With its unexpected move, Vodafone (VOD) becomes the first carrier to introduce its own phones intended specifically for customers in developing countries. Until now most so-called “private-label” devices resold by operators have been aimed at the high end of the market. “[These] will be the lowest priced GSM products ever,” crowed Jens Schulte-Bockum, Vodafone’s global director of terminals, at the event.
A very good coverage of Pakistan telecom is given by a Russian site called COMMNEWS in its Emerging Telcom Markets section. I’d seen the headline on a telecom news feed but after TM recommended it and KO posted it on WiredPakistan forum I paid more attention to it. Here’s what the Pakistan overview page on COMMNEWS says:
In liberalization of its telecom market Pakistan is ahead of many other world countries, let alone their regional neighbors. However, the lack of full and objective information about this country led to cautious behavior by foreign investors, who appeared only recently on the local telecom market, and rather in single cases.
Here’s the first recommended article:
The Last Train: Foreign investors still can jump on Pakistan’s telecommunication market
This article has lots of useful information and talks about the alliances, mergers and financing activities going on in Pakistan. A key point it makes about low valuations in Pakistan must be an eye-opener for investors:
It can be expected that in a year or year and a half the value of telecom assets in Pakistan will grow significantly, equaling the prices that are set by international investors in neighboring India. Therefore, the winner will be that company which gets to Pakistan’s telecom market within 2007, right before the market overheats.
I believe that the political situation remains the biggest barrire to Pakistan’s economic progress.
Here are the other interesting stories on the site.
Success Story: DIALLOG with Pakistan
Interview with Tore Johnsen, Telenor Pakistan (Pvt) Limited, Chief Executive Officer
Opinion: Igor Khulak, Head of the Business Development Department at Sitronics Telecom Solutions
I saw this news at a local paper that ISPs have lashed out strongly against PCL. The ISPs lodged complaint against PTCL for anti-competitive practices by offering lower rates to consumers than the rates it offers to ISP. I also saw this statement by the PM that 75% of house-holds in the country are to be covered with high speed Internet by 2015.
I am not sure what to make of these contradictory statements from the Telecommunication day on May 17.
The last time I checked PTA and PTCL were still in court about the bandwidth tariffs. If one was to look at the low bandwidth penetration rate and all the issues such as the ISP complaint described below, we are still in a poor shape. So HOW in the world are we going to go from say 2% to 75% in 7 years?
As you can note from the statements by Prime Minister, it does not specify an action plan or a policy change - just empty political statements. Does it give us any confidence about bandwidth proliferation in Pakistan?
Shaukat Aziz has said that we are moving forward with great speed to bridge the digital divide in the country by improving the access of information and communication technology to low-income groups and a target of 1.6 million broadband connections has been set for the next three years and infrastructure would be developed to cover 75% of house-holds in the country with high speed Internet by 2015.
“We are moving forward with great speed to bridge the digital divide in the country by improving the access of information and communication technology to low-income groups”, he expressed these views while delivering a speech on the world telecommunications and information society day being observed on May 17.
And then there’s the view from Pakistan’s Internet Service Providers (ISPs), as reported in The News.
As the world marks Telecom Day on Thursday, small telecom operators in Pakistan see their business threatened, blaming the giant Pakistan Telecommunication Company Limited (PTCL) for anti-competitive practices, which has launched DSL service at much lower rates without the regulator’s approval.
The country’s Internet Service Providers (ISPs) have warned that if the Pakistan Telecommunication Authority (PTA) fails to stop the PTCL from offering such service, it would put the future of most of the operators at risk.
It was also reported that the ISPs Association of Pakistan (ISPAK) has formally complained to PTA asking to intervene and to play its role. According to ISPAK there should be a hearing on this. The ISPs offerDSL services of 256 kbps for home users at Rs1,00o-s1,200 per month out of which around 25 per cent is paid to PTCL for local loop sharing charges.
This post and the latest one on Warid’s potential sale of 30% stake to SingTel can be found at the new site here.
I thought this picture which appeared at BusinessWeek.com was interesting - advertising of mobile phones on wheels. As you can read here, this van is used for advertising Nokia phones in rural areas of India. I find this no different than the specially painted Hummers jeeps used for advertising at local gatherings in the US but somehow the picture above is more colorful than anything I have seen in US. According to the story:
Staffers park these advertisements-on-wheels in villages, often on market or festival days. There, with crowds clustering around, Nokia reps explain the basics of how the phones work and how to buy them. Nokia has extended the concept to minivans, which can reach even more remote places.
As the story mentions, Nokia offers special features for phones in rural areas such as dustproof cases (crucial in dry rural areas) and flashlights (helpful during the frequent power outages). The designs are one big reason Nokia now claims more than 70% of the Indian market for GSM handsets (India has CDMA as well). Obviously the rural areas in Pakistan can take advantage of these phone features as well.
Another interesting note refers to community buying - something which women commonly organize in Pakistan and refer to it as “committee”.
Through conversations with slum dwellers, Nokia learned that many people form buying clubs, pooling their money to buy handsets one at a time until every member has one. The members draw lots to see who gets phones in what order.
I am not sure though how easily do people in remote areas deal with the phone menus. My guess is that they learn the basic operations and are unable to take advantage of other features. Hopefully as mobile handset companies pay more attention to the next billion of users they will find some solutions.
Getting a branded communication network for your “social network” is one of the new trends. It is made possible by operators who do not own the infrastructure or spectrum but resell the services with packaged content and branding. The technical name for operators of such networks is Mobile Virtual Network Operators or MVNOs. Such resellers (Virgin Mobile, Disney) have been around for a while but the social networking boom has made this idea popular. Recently the entry of larger players such as Helio and Sonopia have also helped to generate additional media attention. In its own words Sonopia “democratize mobile services by making it possible for anyone to have their own network. “
For more information about MVNOs see this link which has a good summary of the business model and the operational issues. Also see Wikipedia which lists the different classifications of MVNOs. As you can see the MVNO idea is mostly about marketing and sales. As another example one such company called Saki sells it services as:
Saki is a new way share and access exclusive content such as photos, videos, music, movies, news, weather, sports, E-mail, IM and more - all in one place! Use Saki to manage your social network, find old friends, map favorite locations, create party invitations, express your opinions..
Here’s an interesting writeup about Sonopia’s service from a site called Springwise which relies on users to spot and captures ideas from around the world.
Organizations that have already set up a Sonopia MVNO include the National Wildlife Fund, the American Medical Student Association and the Long Island Ducks (minor-league baseball). Someone also started a San Francisco Foodies group and the LonelyGirl15 Fan Club.
The obvious challenge when setting up your own MVNO is to create a strong enough hook to convince customers to switch from a major carrier to your service. Which could be exclusive content sent only to members/customers. Non-profit networks are helped by the feel-good factor of knowing that profits are being donated to the cause of one’s choice, as is the case with the National Wildlife Fund: “Help preserve our wildlife today… one call at a time.”
What kind of groups in Pakistan are likely to use this service? I can see some large organizations which would like to have control over the content. I hope political parties don’t use this as a propaganda tool.
Pakistani business community, bloggers and consumers have been asking for a sensible VOIP policy for a long time. Finally we see a glimmer of hope - PTA has published a consultancy paper on VOIP which invites comments by all. The 58-page - written by a consultant, Naseem A. Vohra - is a good summary of VOIP technology and VOIP situation in Pakistan. You can download the paper in pdf format from PTA site or from telecompk blog.
The paper addresses legal issues, policy issues and issues related to licensing and regulation of the service. Even though comments are inivited on this paper I doubt that anyone at PTA is eagerly waiting for the comments. But even if the fate of our input is unclear this is no reason to not participate in the process. This may be the best time to provide your input and feedback to VOIP policy. I suggest that all bloggers aggregate their reader comments on this topic and send to PTA - perhaps on paper, just in case PTA has difficulty using the complex technologies of e-mail or Internet.
Here are a few excerpts from the paper. The idea is to give you the flavor of what points are raised and options presented. One has to go through the paper to make sense of some of the points below.
There are four options to deal with the situation.
1. Liberalized option – all forms of IP Telephony service are legal with minimal regulation.
2. Incremental option – some forms of IP Telephony service are legal with significant conditions placed upon IP Telephony entrants.
3. Consultation (largely “wait and see”) – a public consultation is underway to seek opinions before definitive rules on IP Telephony are issued;
4. Prohibition – IP Telephony is illegal except for use in the core network i.e. long distance and international networks which almost all LDI operators have deployed but it does not touch the customer.Comments are invited on
i) Conclusion that option3 and option 4 are not viable anymore
ii) Conclusion that VoB will catalyze the growth of Broadband.Comments are invited on
i) Conclusion that telecom sector in Pakistan has already started migration from circuit switching to packet switching
ii) Conclusion that the boundary between VOIP and gray traffic is not clearly defined
iii) Conclusion that regulation of IP Telephony will not push the prices further downComments are invited on
i) Conclusion that Incremental Approach is the right way to go.
ii) Proposal that IP Telephony offerings are placed under three categories
iii) Proposal that category 2 offerings are split into two types i.e. “IP IN” and “IP OUT”.
iv) Proposed recommendations for IP Telephony authorization.
v) Proposed amendment in Broadband/Internet Licenses
Back in 2000 “Any 2 Any” was a catch phrase coined by e-business consulting firms to market technologies and solutions for innovative device to device communications. It was supposed to be a big driver for the “new economy” - if you remember that phrase. Just one problem: the Internet bubble bust and the any 2 any stuff didn’t happen. As usual it was too early and the hype did not live to the expectation. However I was reminded of the recent technology improvements by an article in Economist (When everything connects - The coming wireless revolution) which provides a good overview of machine to machine communication.
The article talks about the new wireless technologies - wireless sensor networks, RFID (tags). Lets see if the Fridge is ready to talk with the cattle?
Here are a few key points from the article:
In coming years wireless will vanish entirely from view, as communications chips are embedded in a host of everyday objects. Such chips, and the networks that link them together, could yet prove to be the most potent wireless of them all. Example: Tags will certify the origins and distribution of food and the authenticity of medicines. But we are stil far from the
The wireless-communications revolution is about making digital information about anything available anywhere at almost no cost. No longer tied down by wires and cables, more information about more things will get to the place where it is most valuable.
For the moment, the mobile phone is stealing the show. It is evolving from a simple phone into a wallet, keychain, health monitor and navigation device. But as mobile-phone technology matures, even more innovation is taking place in areas of wireless that link things only metres or millimetres apart.
Etched into silicon, the radio is starting to benefit from the dramatic decreases in size and cost and the huge increase in
performance that have recently propelled computing. Satellite-navigation chips today cost as little as a dollar apiece.The decrease in cost of chips will drive the adoption of these technologies. Developed economies will use it for commercial purposes. Develping countries will have to focus on critical issues first.
Security and privacy will be of primary concern.
Standards, spectrum availability and government regulations will be important for all this to happen.
This post has barely scratched the surface of these topics. A few additional resources are presented. Here’s a link to a related Economist audio interview file in mp3. Also see this DRITTE link about a technical book on Wireless Networking in the Developing World. And here’s a blog about RFID.
I have previously written about Pakistan’s dependence on mobile phone imports. Here are some updates on what is going on in India where Nokia makes its moves to retain its top position. As reported widely in the media, Nokia continued its push into emerging markets, launching a 0.4 in thin “Barracuda” fashion phone and six other handsets predominantly aimed at the Indian market. It will be priced around Indian Rs. 4500 or $105. According to Nokia ” at this price the largest volumes are sold–on both developed and emerging markets.” I believe these phones will hit the Pakistani market in a few months.
Here is even more interesting news, as reported by WSJ. This reinforces the point that rurual markets are the new focus of telecom companies.
Nokia also launched two devices which use technology that makes it easier to share them among families and entire villages. The 1200 and 1208 models include call-tracking and multiple phone books so that many people can use the same phone. Preset time and cost barriers can also be set on the new phones, meaning that the calls can be terminated once it reaches its limit.
Nokia Siemens Networks, the recently merged telephone infrastructure businesses of Nokia and Siemens AG, also said Thursday that it was launching Village Connection, a product aimed bringing mobile networks to rural communities in India and other growth markets.
Last month, India’s largest mobile phone operator Bharti Airtel Ltd. said it had doubled its fourth-quarter net profit, saying rural areas provided a strong opportunity for further growth.
In addition to the barracuda phone, Nokia also launched several entry-level fashion phones, including cameras and FM radio. This is in contrast to the past when most phone manufacturers have offered basic phones into India, with very little functionality.
Nokia has managed to grow its world-wide share of the mobile phone market to 36% over recent quarters by targeting markets such as India and China, where mobile penetration is fairly low at 13% and 35% respectively. India has more than 166 million mobile subscribers and this is growing rapidly.
“India is very important to Nokia and to the global mobile communications industry as a whole,” said Soren Petersen, senior vice president for Nokia’s Mobile Phones unit said in a statement.
In other telecommunication happenings in India, Vodafone Group PLC, the world’s largest mobile phone operator, last month also received approval from India authorities to go ahead with its acquisition of a controlling stake in Hutchison Essar Ltd, India’s fourth largest phone network.
As you may have noticed that Motorola stock and profits have started falling recently. This could be surprising to some as just last year its Razr phone was the cool phone everyone wanted and Motorola was riding the success wave. What happened? Wall Street Journal did a report on 4/27 where they analysed how Razr success could not be sustained. I’ll share the main points below and add my thoughts.
* Motorola focused too much on one product and failed to produce other products - for example they had No 3G phone. This especially matters for cellphones, where it can take two to three years to develop a new line.
* Even though Razr was successful there was nothing stopping competitors to copy and bring the price down. It is always difficult to sustain the captured value from a successful product.
* In the US market, tensions exist between handset makers and wireless carriers. The carriers have a lot of say in which phones they will carry. (In Pakistan we don’t have issue as all phones are imported and with GSM technology it is much easier to switch phones and SIMs).
WSJ writes:
Motorola and Apple announced the first of what was to be a series of phones created together, a music cellphone called the Rokr. But it was delayed when wireless carriers tussled with Apple over how to share revenue from song downloads. When it was finally available in September 2005, the Rokr drew negative reviews for its design and limited song storage. Although it was a disappointment, Mr. Zander viewed it as just the first in a line of Rokrs. But the name had been tarnished by the poor launch, underscoring that what might work in the computer-software world — where version 2.0 can be followed by version 3.0 — doesn’t necessarily apply to the cellphone business, according to former executives. Motorola says the product line didn’t die after the first version, pointing out a successor Rokr was sold in the U.S.
This reminds me of the classic “innovator’s dilemma” where the existing products are doing so well that companies fail to see what’s ahead. Kodak comes to mind as well.
I think Motorola still has a fighting chance. I like their efforts to produce a super cheap phone (Motofone) and the solar cell screen idea is promising as well. Sometimes the top leadership makes mistakes which prove costly. But often stories such as above tell more about the internal culture of a company than just the leadership style.
This was reported at Textually.org and I found it too interesting and useful to resist posting it here. My hope is that unlike other things solar which have not become mainstream yet, the solar technology for cell phones will become cheap and popular soon. The original post at Textually blog refers to a “Mad4Mobile Phones report on a new Motorola patent which covers the use of a mobile phone LCD screen as a solar cell.”
“The Display and Solar Cell Device patent would allow mobile phones and other devices to be fitted with a solar cell screen that would power the device and recharge an internal battery while it was left in the sun.”
More on the same topic from Textually is below:
– Solar powered cell phones in China by April - HTW Electronics was exhibiting a solar powered mobile phone concept at CeBIT this week and claims that a full production model will be released in China next month. (2007)
– Solar-powered cellphone in the works in Japan - As of 2006 NTT DoCoMo is working on prototype of a hybrid cellphone that features integrated solar panels. Powered complety by the sun rays, so you will never run out of battery power. No time frame yet for a launch date.
– Solar Powered Mobile Phone - The Fraunhofer Gesellschaft (the largest labs for applied sciences in Germany) rolled out a prototype sun powered mobile phone in 2006.
Its hard to tell how long would these efforts take to become a reality. But I for one can’t wait to free my phone from its charger!
The annual conference of CTIA, the wireless association, was held last week of March 2007 in Florida. The CTIA annual event is said to be ”the world’s largest technology event dedicated exclusively to wireless, broadband convergence and mobile computing technologies”. It is a great place to showcase new technologies, network and socialize with top decision makers and create buzz about upcoming work. For example the much awaited voice search applications from Google and Yahoo were announced here.
The event covers the entire industry from network infrastructure to microprocessors to applications to content to end-user hardware. More info at the CTIA site.
The covered topics for 2007 conference include:
- The Quadruple Play
- Mobile Enterprise
- Mobile Payments
- Mobile Entertainment
- Social Networking & Mobile Communities
- Advertising
- Globalization
- WiMAX
See the webcasts of the conference here.
One of the major highlights is the Emerging Technology Forum track at the conference. The forum focussed on the following four tracks:
For detailed roundup of the conference see this post.
Outsourcing of technology or business operations by telecom companies is an area which has recently been in the headlines. One of the reason for this trend is the popularity of managed services trends. Telecom outsourcing has a huge potential for Pakistani technology industry as well. Currently there is no large IT company in Pakistan which competes globally for telecom outsourcing projects. Here are some of the recent mega deals in South Asia which have made global headlines:
As noted by Analysys Research, IT vendors such as IBM and HP are building on their IT solutions and equipment businesses to capture outsourcing deals in the enterprise telecom space. They have been working hard to develop strong service offerings and, in some cases, have even set up telecom practices within their service divisions. The illustration below from Analysys shows how telecom companies are positioned in the outsourcing chain. Note that in this post I am focussing only on the outsourcing BY telecom firms and not any work which is outsourced TO telecom firms.
In Pakistan most of the telecom technology solution deals seem to be happening with foreign technology product and solution providers - at least that is the impression one gets from the press releases and the media articles. Si3 is a notable company - it has offered payment solutions to many telecom providers in Pakistan. I do not know if Pakistani companies such as Techlogix, NetSol, TRG etc. serve the telecom vertical but I’m sure there must be other outsourcing (Technical, BPO or otherwise such as HR services) from Pakistani IT companies. However one thing is clear: the scale of such business seems to be on the small side or the work is limited to certain hot areas such as call centers. Is this another sign that Pakistan lags behind in depth of skills and technical resources needed for larger telecom outsourcing deals?
Of course we cannot compare directly with giants like Tech Mahindra in India (see below) but there is room for improvement. Here’s a relevant article from The Times of India.
The phenomenal growth in telecom, combined with severe competition and cost pressures and rising customer expectations, is driving a slew of huge outsourcing deals in the sector.
The telecom outsourcing story started with the Bharti-IBM deal and then the Idea-IBM one. Now, analysts and industry expect several more similar 10 or seven year deals to conclude soon. Hutchison (Vodafone) Essar is said to be looking for an outsourcing partner. The market speculation is that it could once again be IBM, in a deal worth $1.6 billion. Reliance Infocomm is said to be in talks with companies like Accenture and EDS for a $1.5 billion outsourcing contract. Sources say Aircel is also in talks for a large deal.
About three years ago, Bharti Tele-Ventures had signed a 10-year contract worth $750 million to outsource its entire IT infrastructure to IBM. Idea Cellular followed, a few months ago, with a $800 million deal with IBM for consolidating and managing its IT infrastructure and applications.
This post examines the challenges faced by PTCL and its future prospects. As we know the Etisalat owned PTCL has been engaged in battles with new competitors and regulatory body (PTA) on one hand and faces internal organizational issues on the other. Its profits have been sliding. Notwithstanding the grand claims by its executives, Will PTCL be able to reverse the trend and prove to be a good investment?
There are many ways to get in touch with mobile phone user in Pakistan. One of the option is to send and receive text message through the Internet. All you - the sender - needs is a web browser with Java. It works well for Pakistanis abroad who often have broadband and who want a quick chat with friends or family in Pakistan. Here’s how.
Let’s start with the example of the case when you want to send a text message to a Telenor user. Below is a screenshot from Telenor web to sms page where you enter the recipient’s phone number and your name and message. It is free for the sender and Telenor charges Rs.2 to the mobile user per message.
Note that the mobile user will receive the first message e.g. “Atif has sent you a Web 2 SMS chat message. If you wish to receive the messages from Mak, please reply Y. To reject, please reply N”. In case of reply with Y the session will start - otherwise it won’t. Once a session starts you can send and receive messages.
For those mobile users who do not use text messaging often this may be a surprise! This may not work with all handsets and this service can be blocked by the mobile users.
This functionality is available at many websites which connect to the mobile company’s gateway. I prefer going to the mobile provider site as much as possible so that I may avoid the clutter and ads at the other sites. Here are the links for sending such messages for other providers.
According to China Mobile chairman Wang Jianzhou, the company plans to spend USD400 million this year to expand its network in Pakistan. This was reported by Telegeography. China Mobile entered the Pakistan mobile market earlier this year when it acquired an 89% stake in Paktel for USD284 million, its first acquisition beyond China and Hong Kong. Wang said that the company had invested USD460 million in Paktel to date, and that China Mobile was hoping to gain experience from the venture that it could apply to further overseas expansion in the future.
According to TeleGeography’s database, at the end of 2006 Warid claimed a 15.7% share of the country’s wireless market, while Paktel had 2.7% of users. Orascom Telecom-owned Mobilink was the market leader with 22.5 million customers and 46.5% market share, ahead of Ufone with 20.9%.
As reported by Tee Emm on his blog, some big branding changes are on the way. He writes:
Flair, the showbiz-looking-telecommunication magazine (Issue April 2007, Page 84 - downlad the full issue in pdf) says the brand name change is from Paktel to CM-Pak. How good or bad is this choice (if the Flair report is correct) is subjective.
The China Mobile has sought the Pakistan Telecommunication Authority (PTA) consent to swap the Paktel mobile company name as CM-Pak, the name under which the company intends to operate. The China Mobile that took over Paktel from Millicom International after paying dues has now formally requested the regulator for change of Paktel’s name. Officials from PTA have confirmed that it was approached by the China Mobile with the application that it wanted to operate under the name of CM-Pak, but added no decision has been taken so far.
China Mobile has pumped in $700 million in the Pakistan telecommunication sector since taking over the management control of Paktel. The company will invest $2 billion in the next three years (till 2009) to expand its network, an official of the Paktel
In other news, China Mobile is changing its strategy for charging for content in China. It wants to charge for access to all mobile internet portals that offer content downloads as the company tries to boost revenue from the sector from last year’s 1 per cent of turnover, industry sources said. Subscribers at present can access more than 50,000 free wireless application protocol, or WAP, portals, many of which offer content free through the internet and bypass China Mobile’s Monternet value-added service platform. Let’s see what content plans are offered in Pakistan - I’d like to see the flat-rate which China Mobile offers in China.
On a related note China Mobile reported earnings for the first-quarter recently. Its net profit rose 22% as its subscriber base continued to grow rapidly, but the company failed to meet Wall Street expectations (I’m not sure what were these people looking for!). The listed arm of China’s largest mobile carrier by subscribers said net profit rose to 17.56 billion yuan ($2.28 billion) from 14.36 billion yuan a year earlier. Revenue rose 20% to 77.71 billion yuan.
I have written about Business Monitor International’s coverage of Pakistan Telecom before here. In the past BMI has made interesting projections about growth of Pakistan’s telecom industry. This time they have extended their forecast to 3G services in Pakistan. A subscription is required to view the detailed reports but here’s a summary as reported by Business Recorder. I think their forecast of 6% handsets by 2010 is a bit high.
According to BMI’s 3G forecasts for Pakistan, a difficult exercise given that no licences have yet been awarded to other operators. The PTA is eager to kick-start the process in 2007, which would mean that there are unlikely to be any active paying 3G subscribers until well into 2008.
With GSM the main mobile technology in use in Pakistan, as accessed by Mobilink, Ufone, Warid Telecom, Telenor, and local group Paktel (since its emigration from AMPS in 2004), the preferred 3G technology would be UMTS.
It is likely that the PTA will stage an auction in mid of 2007. It is even possible that licences could be awarded later still. It is improbable, therefore, that any commercial 3G launch would happen before H1 2008.
The introduction of EDGE services (such as the one by Telenor) and popularity of WLL may hinder the development of 3G, but BMI forecasts that by the end of 2010, about 6 percent of all mobile subscribers in Pakistan will have a 3G handset. This, however, remains very much in the hands of the PTA, the operators themselves and, of course, Pakistan’s consumers.
This post was originally published by Tee Emm at Tee Emm on Pakistan Next Generation Issues.
Fellow blogger Tee Emm from Karachi wrote this interesting piece about how mobile companies in Pakistan are increasing coverage to the remote areas. Tee Emm is one of the few pioneer bloggers about technology issues in Pakistan. His analysis and commentary is interesting and refreshing.
Here’s an excerpt, read the full post here.
Telenor & Mobilink will collectively spend over 15 million dollars on satellite based capacities to reach the juiciest of the cellular markets in Pakistan. These markets are FATA (Federally Administered Tribal Areas) and AJK (Azad Jammu Kashmir)
There are many factors that make these markets irresistible for the cellular business. These places have remained under-served for various reasons. Political reasons, difficult terrain, extreme weather. The market remains a popular telecommunication service destination because of the people from these areas have been ‘going out for work’ to every part of the country and every country of of the world. This special nature of ‘half-migration’ which is particular to the population of FATA and AJK people paints a unique equation in term of calling patterns.
Calls are made from all over Pakistan to FATA areas by the hard-working Pathan population. AJK receives majority of its call from United Kingdom where a huge number of people with Kashmiri origins reside.
Telenor has been the first one to penetrate in these markets. With no traces of fiber going out from any of the major cities of Pakistan to these areas, the only option available to the cellular operators is to use satellite capacities to connect their networks in FATA and AJK back to their national network in the rest of Pakistan. Telenor is reported to have obtained satellite capacity and services from Wateen Telecom.
Smart phones or PDAs cost between $300-500 (Rs 18,000-30,000). 
If you are going to spend that much money on a blackberry or Treo, it had better be a phone which works really well and is easy to use. What determines whether one phone will be more usable than the other? Keypad and battery life are two main top priorities. Also screen resolution of 240×240 pixels is recommended.
There are usability experts who are devoted to answering such questions. And as you will read, many of the smart phones in the market do not pass their tests. Computer World recently published this story here. There are other reviews as well such as the one by CNET and WIRED. The summary of the usability article from Computer World is presented below.
Here are the 5 criteria used in this story to rank a phone’s usability:
1. Ease of Navigation: It includes factors such as how simple it is to access and select various functions and finding your way to those functions.
2. Overall usability/information architecture. This relates to issues such as how clear and well-explained the icons are and the simplicity of the file structure.
3. Ergonomics. How does the device feel in your hands? What are the physical dimensions? Are the buttons and switches well-placed?
4. Look and feel. How pleasing is the interface, specifically its graphical design, colors and other design elements?
5. Functionality. This relates to how many applications are included with the device and how sophisticated and customizable those applications are.
Usability Score Results (out of 4.0):
* Nokia E62: 3.5
* Palm Treo 700wx: 3.5
* Motorola Q: 3.0
* RIM’s BlackBerry 8800: 3.0
However the WIRED review of Oct 2006 placed Motorola Q at the top because of its style, speed and QWERTY keypad. Palm Treo took the second spot. Nokia was not reviewed.
Note that Nokia uses the Symbian operating system, all other phones used Windows Mobile. Example of some issues found by usability experts: nonstandard elements to the interface, inconsistent behavior, wrong placement of buttons, slow performance, clunky. Read complete story at Computer World.
This is second in a series about mobile commerce. The first post was a case study about mobile wallets in Japan. In this post I review the efforts by US banks and financial institutions such as credit card companies to push mobile commerce as another channel for their clients. This post is based on a study and report by Information Week. As you go through this, compare this with the experiment in Japan, especially how applications are loaded on the phone … it will be interesting to revisit this after a few months.
Citibank has unveiled Citi Mobile, the first downloadable mobile banking application from a major financial services provider. After enrolling online and downloading the app to a cell phone or smartphone, customers can view balances, pay bills, transfer money, locate ATMs, and click to call customer service.
Citi Mobile can be downloaded to 100 cell phone and smartphone models. It’s initially available in California, but Citibank says it will be out in other states by midyear. The app has been more than a year in development, and Citibank execs think U.S. cell phone users are ready to do more than talk and text on their phones. “They can manage their accounts while sitting at a red light in their car,” says Steven Kietz, Citi’s business manager for enhancement services and e-commerce.
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Citi Mobile has the graphics |
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Information Week is not so sure. As they say: There will be a growing market for mobile banking when there’s a need for immediacy, like emergency fund transfers and balance checks, predicts James Van Dyke, president of payment consulting firm Javelin Strategy and Research. But his take on a mass market for mobile bill paying: “It’s ridiculous.” The banks beg to differ, though. Wachovia, which has a mobile offering, says mobile bill paying is one of the top customer requests.
Since the Citi Mobile app resides on the phone, it’s faster and offers a graphics-intensive interface that’s closer to online banking than text-heavy Web-based apps. Customers select the Citi icon on their phones to access accounts instead of navigating through multiple Web pages on a tiny screen. They’ll also receive new features automatically whenever Citibank makes an upgrade available.
Bank of America took a different approach, launching its WAP-enabled Web-based mobile banking service in February. Most mobile browsers can access the service, which lets Bank of America customers check account balances, pay bills, and transfer funds. “We chose to go with a WAP application, so that everyone can access it,” says Sanjay Gupta, an e-commerce executive for Bank of America. The downside: WAP displays information mostly in text form without rich graphics.
More from the report:
Wachovia also went with a Web-based app, launching its Wachovia Mobile service in December. It works only with Web browsers that come on smartphones running Microsoft’s Windows Mobile 5.0, Research In Motion’s BlackBerry, and the Palm OS. More than 50,000 people access Wachovia Mobile each week, says Ilieva Ageenko, the bank’s director of emerging applications.
But Wachovia has another option in the works. It has teamed with AT&T, which will offer later this year mobile devices preloaded with a mobile application for accessing Wachovia’s and other bank’s services. Preloading the app makes it easier to use on the phone. By getting together with AT&T, Wachovia has “enough footing to reach out to this huge base of customers,” says Ageenko.
But preloaded apps have their downside since the number of customers a bank can reach is limited to the number of phones its app is loaded on. But even with downloaded and Web-based apps, banks may have to work hard to convince customers to sign on. “Instead of banks giving away toasters, maybe they’ll give away phones,” says Richard Crone, of Crone Consulting. Also, putting an app on a mobile device could increase calls to the support center as people struggle to get an app to work on a particular device, thus increasing a bank’s costs, he says.
Besides usability and access issues, security looms as a potential problem. Mobile applications preloaded on cell phones mean personal information will be stored on phones, posing a huge risk. The good news is that the banks are putting a lot of effort into securing their mobile offerings. With Citibank’s Citi Mobile service, the phones don’t store any personal information and transactions are secured with 128-bit encryption, the same technology that’s used at Citibank.com.