CMPak Selects Alcatel-Lucent for Life After Paktel

Alcatel-Lucent is announcing that China Mobile Pakistan (CMPak) has selected the company for provisioning of GSM/GPRS/EDGE equipment for the expansion of the CMPak services in the populous north of the country (Pakistan).

Summary: According to the details, Alcatel-Lucent (through its Chinese presence of Alcatel Shanghai Bell) will provide its high density GSM solution which is needed for higher density urban cities of Pakistan. Alcatel-Lucent is also providing PDH and SDH equipment for the transmission requirements of the new expansion project. Apart from hardware, the  company is also providing network optimization, support and general project management.

Competition in Domestic Capacity Sector

In an effort to enter other segments of telecommunication services beyond cellular voice services, Mobilink is now actively marketing capacity on its national optical fiber network to potential customers. The company has established  a separate business division to cater to this vision. Primary targets are alternate careers and long distance voice operators that are currently subject to the monopoly of PTCL in this segment.  Blue chip customers that might have sizable requirements for domestic data traffic are also being targeted to some extent.  Typical discount rates that are being offered to existing PTCL customers are in the bracket of 20% to 40% depending on the business size and the customer(s) market standing.

Last mile issues – the network segment from the potential customer to the service provider – is also being handled very aggressively. For bigger customers where ROIs are shorter and reasonable, the company is reportedly willing to build microwave links to shift the customer from its current provider (PTCL) to itself.

Customers have shown a mixed response to the sudden availability of competition in this expensive segment of telecommunication services. Last mile issues mentioned above are not always sorted out for smaller customers who are required to build their own network up till the new providers point of presence. Unavailability of dedicated service organization within the new alternative long distance capacity providers is also a major turn-off point for the potential customers majority of whom are not ready to buy the argument of these company which revolves around the myth that the service will be error-free because we (the providers themselves) are running out network on it.

A major driver toward these new service providers could be the need of businesses to diversify their long-haul communication infrastructure by going to two different service providers’ networks. However, in the absence of services packaged specially for backup purposes, the high costs will keep a good number of customers away from the new providers.

PTCL Broadband – All Set, Except Bandwidth

PTCL is set to launch its new broadband services off its new OFAN platform starting 23rd June 2007 in Karachi according to a source in the company. However, just like their launch of the service in Islamabad and Rawalpindi a few weeks ago, the Karachi launch is facing a bizarre issue – everything is set except that transit Internet bandwidth is not available for the platform to the needed extent. The same issue, according to the insider, is being faced in Karachi and unless this is fixed by some drastic measures, the Karachi launch will be marred by the same problem.

In other unrelated PTCL news, a new Voluntary Separation Scheme aims at cutting down as many as 12,000 regular employees of PTCL in the first go. The new management at PTCL  plans to drop a total of 38,000 regular employees from the 52,000 populous team of PTCL in the coming days. (Staff working at non-management positions of riders, peons, drivers etc are paid daily and are not part of this count. Most of these belong to sister concerns of PTCL such as Telecom Foundation etc).

Telecard Joins Stake Sellers’ Group

The News has this story on Telecard considering selling some of its stake to a foreign group:

The country’s pioneer and the largest payphone companies are in talks with foreign groups to sell off its share, what the industry believes is an attempt to attract investment for expansion.

TeleCard – one of few payphone companies in the country has planned to sell out its minority shares to one of the foreign business groups, it is in talks to and is expected to reach deal in the days to come.

“Actually the company has initiated talks with a UAE group and there are several other intentional players, which it eyes to engage in,” said a source privy to the company officials.“Though the company has not reached any conclusion with any group, it is expected to review offer of the different groups it has received.”

He said the company had almost decided total percentage of the company shares to be sold off but it had not yet disclosed the details. However, he said, the company officials believe it took more than anticipated time to strike deal for the desired sell off.

The country has witnessed a series of foreign takeovers in recent months as two foreign groups have already acquired majority stakes in local companies. First Qatar Telecom stretched its wings to Pakistan, entering into final talks to acquire Burraq Telecom with nationwide and intentional telephony networks at $30 million.

Then it was Egyptian Orascom Telecom – parent company of the largest cellular operator Mobilink – that finalised deal with DVCOM, a licensed LDI (long distance and international) and limited mobility telecom operator.

However, source said the TeleCard was more interested in selling out minority shares keeping management control in hand with majority stakes.“It’s a little early to suggest percentage planned to sell out but it would obviously be minority shares as the company wants to keep management control intact,” added the source.

He said the company had plans to expand its fixed line network across the country for which it looked for investment against shares sell off.“Currently TeleCard operates payphone and WLL (wireless local loop) services with also an ISP (Internet service provider in place,” he added.

He said TeleCard was ready to evolve as the most technological advanced integrated telecom solution provider of the country. “The company has successfully launched WLL service (GO CDMA) based on CDMA2000 1 X technology that provides the unique combination of voice and data/internet for the first time in Pakistan,” he added.

The country telecom sector has fast attracted foreign during last three years with main focus on cellular service. However, industry players believe it’s a high time for reputed intentional telecom operators to capitalise on opportunity in Pakistan, which offers one of the best business opportunities in its rural areas.

The country’s telecom sector has attracted $1.41 billion foreign direct investment during the first nine months of 2006-07, retaining top position among all other sectors. Figures released by the Federal Bureau of Statistics suggest foreign investment in the telecom jumped 34 per cent during July-March 2007.

Weird Stats

A news item in Daily Times says that Pakistan imported cellular phones worth around $728,000 in the last nine month which according to the news article is 28% more than what we imported last year during the same period.

Umm..sounds strange. The reported figures are not even close to a million dollars. Either the report used the figures of just one vendor or it really got confused with the facts. With an average cost of $100 (Rs 6,000), this figure means that we imported just around 7,280 mobiles? Quite unlikely.

With the average joe Teefa on the street buying a new cellular phone worth $60 ~ $100, no local production of cellular terminals, PTA complaining about insufficient record keeping of SIM issuance and millions of users being added to the networks month by month, even with tax and paperwork evasion, the figures must at least be in tens of millions of dollars.

More Details on PTCL IPTV Plans

More details are emerging on the new broadband infrastructure that PTCL has been working on.  Daily Times says in a report that the project cost for the Optical Fiber Access Network was $58 million (Rs 3.5 billion) and that PTCL plans to offer triple play services on the new infrastructure with as many as 250 IPTV channels, voice lines and faster Internet access all for Rs 1,500 ($25) per month. [Let us hope they put all this together before stuff like Joost takes away most of the juice out of regular TV and channels!]

The network will continue to be build beyond the three key cities of Karachi, Lahore and Islambad:

PTCL plans to expand the service in phases across the country. During the first phase, the company will provide the service in Lahore, Karachi and Islamabad. The required network will be installed across the country within a year. Two Chinese companies have installed more than 350 ONUs from exchanges to telephone cabinets by replacing old copper cables with optic fibres. One optic network unit costs Rs 10 million.

PTCL’s new management apparently knows it is easy to put the nuts and bolts together but difficult to build up customers’ confidence in their service attitude that is very badly tarnished due to the people in its ranks that are used to of decades of monopolistic environment. Let’s hope they put together a better support team they are currently seeking people for.

Provided the network is properly rolled out in time (with adequate customer support backing the higher speeds it promises), it will open up opportunities of more BPO businesses by existing or new SMB outfits and other virtual transactions.

A key challenge that PTCL will face in the roll out of this network would be provisioning of real IPv4 addresses to its envisaged 100,000 always-on customers. Since this would require close to the equivalent of 400 class C blocks and given the shortage of IPv4 addresses worldwide, it is most probable that PTCL will resort to network address translation (NAT) and put its customers behind fewer real IPv4 addresses. While browsing and download speeds will increase with the new network, a lot of fun would go away because of the absence of real IPv4 addresses. It would be logical to expect that there would be an exception to this for the ‘gold plan’ customers on the network. It would also be good to see PTCL experimenting with IPv6 deployment along side this network roll out though shortage of applications for IPv6 will remain a tough challenge to surpass.

CCIE Ignite Program #2

Cisco Systems Pakistan is arranging a second CCIE Ignite Initiative in Karachi on 22nd June 2007 at 10 AM at Pearl Continental, Karachi. The program will be conducted by Yusuf Bhaiji, CCIE Proctor, Cisco Systems. YB is based in Dubai and Sydney.

For Registrations: Areej Qureshi <arquresh[at]cisco.com>

The Last Train

Most of the articles that appear about Pakistan’s Telecommunications market are sketchy in nature and leave a lot to be desired in terms of details and perspective. Comnews recent article aptly titled ‘ The Last Train‘ is an exception to this generalization. The 5,000 words article nicely covers all aspects of Pakistan’s Telecoms from Cellular to WLL to Wimax.

In the ‘Manna for Investors’ section, the report describes the current appetite for more fundings by the existing operators:

 For investors there are some opportunities to enter the Pakistan telecom market. Apart from buying shares of DIALLOG Company, which is looking for financing sources for expansion throughout the country, other companies like Worldcall and Instaphone also are looking for partnerships.

“Worldcall needs about USD 16 million just for implementation of its WiMax project. And for implementation of all its development plans, including WLL network expansion, HFC and Metro Fiber network construction, we need around USD 50 million,” says Sardar Ali Wattoo.

“We are capable of borrowing this amount, but if Worldcall is of interest to some well-known partner, then the majority shareholders of the company, Lahore businessman Salman Tassir and Sheikh Suleiman Hokani from Oman, are ready to share its shares in the charter capital.”

Instaphone is looking for partners for construction of its digital mobile network. “We are in the process of searching for an investor, as the first phase requires USD 300 million in investment capital. However, we are not taking a passive stance, and already have prepared 700 fields for installation of new base stations,” says head of the company Javaid Firoz.

The Pakistan telecom market is on the radar screen of major industry players. A source in Warid Telecom said that its shareholders, led by Sheikh Mubarak Al Nahaiyan, are in the process of negotiations with Vodafone for selling their share in Warid.

The gradual process of change in ownership of Pakistan telecom assets began last year, and no one is ready to evaluate the effectiveness of these investments.

Recommended reading for outsiders who want to get a good summary of local market as of 2007.

Omantel: Me too!

Omantel is reportedly also interested in buying stakes in a yet unnamed telecoms company in Pakistan.

‘The company is currently studying plans to enter into competition to purchase a share in a Pakistani telecom company,’ Omantel said in a statement. ‘The deal … would give Omantel an opportunity to expand its investments’. Gulf Arab telecom operators have been hunting for foreign assets as competition increases at home, and Asia has been a priority.

Qtel to Invest $80m in Pakistan

Arabian Business is reporting that Qtel will invest $80 million in the next few years via Burraq Telecom that it acquired (75% stakes) in April for $12.3 million. The fundings is expected to bring wimax based Internet to the major cities of Pakistan.

Warid Intends To Sell Part of Equity

Reuters is reporting that Warid is talking to a number parties to sell a minority stakes. The company, it says, is not ready to give up control or change the brand. Along with MTC (which we reported earlier here and here), the report cites the names of Singtel and Vodafone of UK as the parties that are talking to Warid on the issue.

PTA issues MVNO Framework

PTA has issued a terse (three page) MVNO Framework. While the provisioning of MVNO operations was provided in the Cellular Mobile Policy 2004, the brevity of the subject matter left a lot of guessing work for those who wanted to offer the service.

The framework calls for, among other things, separate number series for MVNO operators and the QoS liability has been tied with the MVNO and not the parent MNO.  The framework also offers some pro-MVNO clauses such as the one that does not allow a parent MNO to discontinue the services of an MVNO without the permission of PTA. This clause can open doors to conflicts between the MVNO and MNOs.

Telecard was probably the first operator to offer MVNO-type services on its limited mobility Wireless Local Loop operations in Pakistan. A number of such (wll)-MVNOs had been operating in Telecard’s network in the PCO business where the business is driven by the command of a commercial entity on the customers of a given region.

With constant capacity buildup by  Mobilink, Ufone and now Paktel, excess infrastructure capacity will soon become a reality and selling out that capacity will soon become a big business challenge. The MVNO framework 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.

Pakistan-Iran Fiber Link

Pakistan and Iran started talks on a possible terrestrial optical fiber connectivity between the two countries back in December 2005 have now signed a Memorandum of Understanding for the same. The deal between Iran’s Telecommunication Infrastructure Company and Pakistan’s state-owned NTC. Capacity of the fiber would initially be 64 STM1 links.

Once realized (at a reported cost of 1 million dollars), the link will be the forth major optical  fiber connection of the country to the outside world. Currently, SMW3, SMW4 and Transworld’s TW1 are the only three physical optical fiber cable systems (beside some satellite based connectivities in Karachi and Islamabad) that connects Pakistan to the rest of the globe. Talks for a link via India are on since since December 2004 but the deal has not yet materialized and no circuits have yet been fired up.

Warid Going Places

Warid’s Bangladesh operations is going good – as reported here and here, they are said to have registered 150,000 users in first five days of their service launch. This is going for Warid like it went in Pakistan – 1 million users in the first 80 days and 4 million uses at the first anniversary.

Paktel’s Continued Transformation

Cellular News is reporting that Paktel’s stakes were acquired by China Mobile Communication Corporation which is the parent company of China Mobile. China Mobile is a listed company and the move is intended as the investors were cautious on the profitability of the venture in Pakistan due to fierce market competition.

Insiders are reporting that the new company, now renamed as CMPak has started a fresh wave of hiring employees.  The company is also engaged in talks with a long-haul optical network with Malaysian roots to acquire dark fiber pair on long term lease for its nationwide traffic requirement.

Sans Wateen, MTC-Warid Deal Nears Closure

The MTC-Warid deal we discussed earlier, is reported to ‘near closure’. A high ranking ex-employee of Warid with close insiders contacts confirmed the rumors floating in the market since the morning. The interesting twist is the fact that the would-be owners are only interested in Warid and have shown no interest in Wateen, the data and telecommunication infrastructure wing of the Abu Dhabi group.

Wateen is deploying Wimax services in major cities of Pakistan on a Motorola platform, has laid thousands of kilometers of optical fiber across Pakistan and is building a large number of carrier hotels to serve, besides Warid, other telecommunication entities in Pakistan that have traditionally suffered from the monopoly of PTCL for these services.

Local Antispam Efforts

Sajjad Zaidi is detailing that Dancom has started blocking port 25 on its network. Port 25 is used for operating email servers. This means that ordinary users of the service would not be able to operate mail servers on their own. Of course, Dancom provided SMTP server would be there to accept mails for onward sending.

Basically this is what every major ISP eventually concludes as the right thing to do.

By doing so, and doing so collectively, Pakistani ISPs can contribute to the global Internet community by ensuring that small sources of spam (that can collectively be a huge problem) are stopped from spitting the junk to the Internet at large. The ‘cost’ involved in taking this step is obviously the efforts such ISPs would have to put in to face the customers who would ask for this facility. The disputes, although not very likely, can also enter legal domain with questions being asked along the lines of Net Neutrality and consumer rights.

Applying the restrictions to the pre-paid card users seems to be most justified. These users have no identity-revealing-relationship with the providers other than the CLI information. For account-based customers and other SOHO/business customers, the step would be difficult to implement.

Acceptable Use Policies and Terms & Conditions of the ISPs taking this step will require updates to ensure that users are told about the fact that they cannot use the service for running their own email servers . Quality (uptime, queue holding capacities etc) of SMTP servers at the service provider end will also to be enhanced. Customer services staff that face the customers will require training and provisioning of background information on the subject matter to fully satisfy the customers who can mistake this netizen-friendly step as a draconian right-denial thing.

PTCL Launches Own DSL Operations

PTCL has launched the anticipated DSL services under a confused brand name today. Apparently branded as ‘Broadband Pakistan’, the service seems to be off to a hasty start.

DSL was one area PTCL has largely left to O&M operators (who use the copper infrastructure of PTCL for their DSL services) and to its practically estranged subsidiary of Paknet. The ‘tariff’ page of Paknet has gone 404 probably after PTCL itself took up the DSL business which it announced today.

The sign-up page for new subscribers is broke. The form asks for a city but does not give any option to provide one. The phone number provided on the ‘customer services’ (800-810-999666) does not work and calling it gives you a recording for an erroneous dialing from the very network of PTCL. The ‘online Help’ link is un-clickable.  Presumably a placeholder entry by the webmasters that carried out to the live website. PTCL is looking out for big guns but it seems that for now, they need some good web development team that can deliver a coherent and functional public interface for them.

Keeping the ‘teething problems’ aside, the plans are interesting and suggestive of the future trends the DSL market is going to follow. The base plan starts at 256 kbps so there is no 128 kbps option altogether. No security deposit, no start up fee, free CPE and unified billing.

Readers are requested to share their experience of the service as it becomes available for the rest of us.

PTCL Seeking GMs, Misses Change Artists

PTCL, on 13th May, 2007, has posted around 50 jobs on its website most of which are of higher management level. The company is seeking General Managers for Business Development (Consumer), Sales Planning & Forecasting, Consumer Sales (Zone), Corporate Sales (Zone), Business Development (Corporate), Distribution Sales, Direct Sales, SME’s Sales, Corporate Sales, Commercial Performance Control, Multi Media Management, Loyalty Management, Calling Cards, Fixed Network Services, Wireless Network Services, Market Communication, Skills Development, Country Training, Market Research & Planning.  A large number of Senior Managers and Managers in various disciplines are also being sought for what seems like a fresh start in a competitive market by PTCL.

Apparent from the titles of these post is the fact that PTCL would now be focusing on selling services off the infrastructure it has been laying down in the past two years – Wireless Local Loop, Optical Fiber Access Network / DSL, and Wimax (currently in planning phase). The key challenge that the company now faces is to how to present its customers with solutions that are seamlessly stitched together. For a very long time now, PTCL’s customers are accustomed to weave their own solution from the available connectivity options provided by the company. In fact, a large amount of market business is carried out by third parties that generally perform this job in the fanciful name of ’system integration’.  With good talent onboard at PTCL, it might become possible for the company to offer integrated solution to its customers by picking up the services available across its portfolio.

While it seem simple to attract good human resource from local and International market by simply bringing the compensation packages at par with the market, most of the incumbents in the developing world forget that before they can attract (and subsequently benefit from) the talent available in the market, they need ‘change artists’. From organizational development to organizational behavior, the challenge for large incumbent organization like PTCL is far from one that is just technical and procedural.

Mobile Spam To Hit Pakistan?

Update: I later discovered that the issue of Mobile Spam got some good coverage in the press earlier. Both Warid and Mobilink have sensibly recognized mobile spam as a privacy violation issue. The report has some interesting account of local market happening in this segment.

While spam deserves least of the attention, a macro analysis of spam contents can give a good idea of the commercial activities and trends picking up. Lately, my spam samples have started showing up an increased count for ‘mobile spam business’. Here’s a (sanitized) sample:

Computerized SMS-Marketing Now in PAKISTN:
1. We Send 1000-SMS AD Only Rs.2000/AD with Complete SMS-Receiving Advance Log Report.
2. We Send 2000-SMS AD Only Rs.4000/AD with Complete SMS-Receiving Advance Log Report..
3. We Send 3000-SMS AD Only Rs.6000/AD with Complete SMS-Receiving Advance Log Report..
4. We Send 4000-SMS AD Only Rs.8000/AD with Complete SMS-Receiving Advance Log Report..
5. We Send 5000-SMS AD Only Rs.10,000/AD with Complete SMS-Receiving Advance Log Report..
*****
*****
*****
10. We Send 10,000-SMS AD Only Rs.20,000/AD with Complete SMS-Receiving Advance Log Report..

For ORDER Now PLS Call/SMS at <<contact details deleted>>

To be able to send messages across all the networks in Pakistan, you either need to be one of the cellular operator in Pakistan (that would be connected to each of the other operator), or you need to subscribe to bulk SMS services to third parties that might be on offer by any of the cellular operators (I am not aware of any such facility with any of the operator) or finally, you need to do an IP-interconnect with any of the bulk SMS operators on the Internet which will deliver the messages as international SMS to Pakistan. The third party mobile content processors and producers that are on the rise in Pakistan lately (more on this later this month) are generally well-behaved commercial entities but in the absence of any Mobile Content Policies in general and Mobile Spam in particular from PTA, these startups can quickly start providing services to irresponsible mobile spam.

Why is Mobile Spam Dangerous? Because is far more intrusive than its PC cousin which will nag you only when you are at your PC. Even road warriors spend time away from their hand-held’s screens.  But it is different with the cell phone. Every time it beeps, one is reminded of an important message from someone special at best or a good joke from a contact at worst. It is this intrusive nature of mobile spam that makes it so attractive for advertisement purposes. You get undivided attention of the recipient.

Why is Mobile Spam Not So Prevalent Yet? Because unlike conventional PC spam, it costs the sender per message to send out the spam message.  So this calls for a higher profile scrutiny of the targets (which is good for marketing effectiveness).  Also, unlike PC Spam, it is very hard to send bulk mobile spam using regular mobile terminals and one must have (direct or web) access to SMS gateways to be able to send out the spam. As SMS gateways and their services get more prevalent, the abuse will be likely to increase.

What about Operator Mobile Spam? Probably the worst thing operators can do to annoy their customers.  Just because its their network, it does not mean that their users do not have ‘do not disturb’ rights on their cell phone in the messaging domain. Pakistani cellular operators, under dropping ARPUs but increasing market size, are desperately turning to SMS and other value added services to boost their revenues. But instead of innovating the space with things like subscribers-opt-in-and-get-paid text advertisements ecosystems, they are simply spamming their users numerous times a day.  The wild and unstructured approach of the texting domain gives rises to secondary problems such as SMS mugging detailed here.

Let us hope that the segment get structured with responsible players, informed users and a vigilant regulator so that everyone in the ecosystem ends up a winner. Hopes are expected from all taxes!