Cellulars Spends over $15m on Satellite Capacities

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.

The AJK area has been served for telecommunication needs by an autonomous (but with a military background) organization called ‘Special Communication Organization - SCO’. The sector was opened up for other cellular and local loop operators under the current Telecommunication De-Regularization and Liberalization policies of the Government of Pakistan.

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.

Enjoying an absolute majority in terms of number of subscribers, Mobilink is eager to catch up with Telenor by going the satellite route for its network expansion in these areas.

Volumes that are expected on these two routes warrants multiple transponder capacities on Satellite. Capital expenditures are high by the local industry standards and in some cases warrant establishment of dedicated service organization out of the requirements.

Until fiber makes it way into these far flanged areas, a good two to five years of Satellite operations are expected. Utilization should then start dwindling down to the role of backup and critical applications. Space segment sellers and Satellite Service industry in Pakistan can play happy till then.