Juniper mulling Backoffice in Pakistan

Update: I have been grossly mistaken in putting up this blog post. The company in this report is NOT Juniper networks but a start up called ‘Paxterra’. Paxterra has been formed by a senior Juniper Networks staff who recently left the networking giant to form the new company. The company, among other things, will be getting contractual work from Juniper Networks and intends to get it done locally in Pakistan. So while the headline of this post has proven to be grossly wrong, there is still some original excitement in the news. The confusion was caused because my contact at Juniper Network broke this news to me and the way the dialog progressed, I mistook Paxterra for Juniper. I am sorry. 

p.s: The openings are still there and local Pakistani resources are welcome in this new venture.

Juniper Networks Some senior Juniper Networks’  staff might end up opening a technology back-office in Pakistan. The project, very small right now, can prove to be a great news for the nascent but budding IT and Telecommunication industry of Pakistan.

It is interesting to note that despite considerable sales that Juniper Networks has recently made in the otherwise invisible-on-the-sales-map Pakistan, this is NOT a sales office. Some patriotic and situation-aware Juniper guys have managed to convince the company to have a back end technology office in Pakistan. This is reportedly for the stress testing and other iterative testing jobs for which good engineers are readily available in Pakistan.

If this goes through and continues to grow, from a strategic view point, Pakistan will move upwards the value chain of the BPO business. Let us hope for the best!

SK Telecom buying Majority Stakes in Instaphone?

According to unconfirmed but reliable news, South Korea’s SK Telecom and the Arfeens Telecommunication Group of Pakistan have finalized a deal in which the South Korean player will acquire 70% stakes of the Instaphone (& Telecard?) along with management control. SK Telecom’s website states is global aspirations as:

SK Telecom revealed three key business areas to be concentrated on. These are the furtherance of our global reach by expanding internationally, developing the convergence of telecommunications and broadcasting, and searching for new business opportunities. With an aim toward becoming a major player in information communication under an economic umbrella that will be over all of East Asia, we are actively seeking multifaceted business opportunities in overseas markets.

Established in 1984, SK Telecom has a number of interesting networks under its belt including CDMA 2000, HSDPA etc. True to the uniqueness of South Korean market, the company offers a number of wired/wireless and application services. From Wikipedia:

The company’s current services include NATE, a wired and wireless integrated multi-Internet service, June, a multimedia service, MONETA, a financial service, Telematic service such as NATE Drive and even Digital Home service. In 2004, SK Telecom launched “Hanbyul,” the world’s first DMB satellite. The carrier currently provides satellite DMB to its subscribers through its subsidiary TU Media Corp. SK Telecom also offers a variety of internet services, many through its subsidiary SK Communications. Cyworld is one of the most popular blogging services in South Korea and NateOn is one of the most popular instant messengers.

The news further puts the number of new planned base stations to be erected by the revived company at 1500 ~ 1800.

In anticipation of a possible cash injection and to reduce time-to-service, Instaphone’s management had already finalized a hardware supply deal with Huawei for an all IP CDMA EvDO Rev.A  earlier this year.

Arfeen Group manages three major voice and data brands in Pakistan (Instaphone, Telecard and Supernet) with Telecard’s being listed at the Karachi Stock Exchange. The group has been reportedly trying to strike expansion focused international telecommunication players but considered the management control to be most effective if it remained in the hands of the local minority stake holders. With a regulatory environment that has earned kudos in recent months for its consistency and neutrality and success stories of foreign managements (of Warid, Telenor etc), the demand of management control to the local minority partner was the major factor in not getting the previous deals closed.

The last un-taken group of Arfeens Telecom represent a power-house of telecommunication with all licenses tied to a single ownership flag - from the super-duper cellular to the mundane dialup ISP license.

The group has recently inducted new senior management that include Aamir Niazi as Vice Chairman. Aamir Niazi was associated with BOC Group for the past 18 years. A new CFO and a new CEO are being expected to be planted by the Koreans to give effect to the new ownership.

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).

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.

MTC Interested in Warid?

A news appearing in Urdu, attributed to Associated Press of Pakistan says (translated for the primarily English readership here):

Islamabad (APP): Telecom service group of Kuwait, MTC has offered to buy Warid Telecom cellular services in Pakistan for $805 million. There have been two rounds of talks for the deal between the two groups in Dubai during the last two weeks. Warid sources have said that the MTC group is very actively looking to get engaged in the cellular business in Pakistan and is talking to Warid for such a possible acquisition. Sources have said that the two managements met in Dubai recently and MTC offered $805 million for acquiring Warid. Warid Telecom has not yet conveyed acceptance or otherwise of the offer back to MTC.

No other sources of the news could be tracked so the readers can take the newsbite with a pinch of salt.

Shhh..`The Minnows Are Expecting’

The News is saying that at least two groups, one of which is from UAE, wants to take up the smaller ISPs in the country in an effort to capture the left-over Internet part of the telecommunication sector in Pakistan which so far has been overshadowed by the bigger numbers and higher attention bandwidth casted on the voice business by the international investors.

The ISP sector which once saw great amount of local investments, job bonanza, high-profile marketing and a lot of attention bandwidth from the general public has gone through its bad times. Safely, 60% of all the ISPs licensed by PTA have disappeared in thin air. Those that are left intact are operating with tight budgets, leaner teams and lower advertising spendings.

So when we are told that investment might be coming the way of these telecommunication minnows, there is a ray of hope among the ranks. But given the fact that the current investment friendly environment allows for new investment to come in and start their businesses effortlessly, is this optimism real? Why would someone want to acquire existing ISPs some of whom might already be carrying legacies and complexities that are not worth the trouble?

Customer loyalty is low (so you wont by any ISP for its customers), ISP licenses are cheap and easy (Rs 500,000 / 1 week processing time), and the infrastructure gear (fiber, remote access servers, routers, transit bandwidth etc) are cheap for Internet service providers solutions. Human resource that understands the local needs and norms can always be attracted by a bigger name that enters the market, so problem at that front too.

There is one reason why someone would acquire existing smaller ISPs instead of starting out from a clean slate - possible resistance by PTCL towards any new setup. The new PTCL management has not yet shown any considerable activity in Paknet - the nationwide ISP owned by PTCL. The sector is too small revenue wise when compared to voice. If the current speculations are correct, we all might be in for some interesting mini-battles between PTCL’s Paknet and the mopped-up bigger ISPs.

P.S: The part where the news item quotes the source is interesting:

Potential areas in Pakistan are Internet broadband, data communication services and managed IT and telecom services,” said the source. “But the groups would solely rely on the feedbacks and studies carried out by their consultant. It may take a month or more before a clear picture could emerge.

Why re-emphasize a standing fact? Investors always give weight to their consultants who are paid for the job. Somehow I find the wordings carrying some additional payload between the lines.

Death by CLI!

The hoax took the nation by storm. And it actually became a social virus much to the delight of whoever must have released it in the first place. And true to the traditions of the ‘Jinn in London Mosque‘ and ‘Bomb Blast at Grumander’ news, this was aired on the TVs only to be later declared as a hoax in the slides.

We saw a number of interesting things happening out there. As if the constant calls from friends and knocks at the office room from colleagues was not enough, my doctor wife wore the most serious and somber of the faces I have seen on her in the past seven years when she asked me: ‘What will happen now?’ - taking the troublesome news item as a ground reality in the first place. And every tech savvy person in my circle had similar stories to tell about from their respective surroundings.

On the face of it, it seems a bad situation that we had the hoax getting so successful in the public. However, this very event once again proved the fact that the nation has truly gone cellular in the past few years with everyone - okay ‘almost’ everyone - having a piece of this convenience. We cannot blame the masses for the lack of technical acumen to separate a hoax from a real trouble - this is how the general public behaves the world over. The other silver lining very much visible was the voluntary squad of techies that stood up and fought the hoax in a distributed manner. This again is a sign of the youngsters getting a hang on the technology and its possibility brackets.

Since the majority of the hoax message talked about ‘an unknown or weird’ number being the culprit, I am tempted to ponder on the possibility of this being an attempt to curb illegal voice termination where it is given that the origination number would be hidden behind a dummy number which generally is also weird and distinct from regular numbers that we receive during the day. Of course, such an measure to counter illegal call termination would be silly for it will have a production cycle of days if not hours but it seems probable that for as long as the hoax caused the greatest panic, illegal calls were probably not terminated into Pakistan

Another thought that quickly hit after we saw the panic waves around the network was whether the industry has now reached a state of stability and harmony to do a structured search from the SMS records of the six cellular operators and make an attempt to track where the stuff started from in the first place. Even if we are too late, or the records are too many or the stuff originated out of Pakistan, an effort in this direction will sure teach us a thing or two. Internet is even more complex and multi-partied and yet virus and malware writers do get identified when efforts are put in. This would be more productive than the pacifying announcement by PTA on the same topic.

And finally, since a lot of friends were debating whether there is a possibility of this being crafted by the cellular operators in the first place for increased SMS traffic between their users, I can only confirm that this is a long established practice in the operators to ’seed’ interesting and most-likely-to-be-forwarded messages to small number of customers every now and then only to see a ripple effect of the messages moving around the network, brining in revenue.

Pa(c)k(up)tel?

Millicom International Cellular (MIC) - the parent company of Paktel GSM has annonced that it plans an exit from the Pakistan cellular market. The shock was delivered in a press release dated 13th November 2006 (pdf available here) on its corporate website the international cellular group that specializes in operating in virgin cellular markets.

This news is definitely high-impact. First, its bad for the so-far positive image of the Pakistan Telecom market which has shown good growth over the past few years with tele-density reportedly reaching 30% from a dismal 2.7% at the beginning of the sector opening.

The news has also been a shock not in that it was not expected but the urgency that has been conveyed in the press release for this to happen. Earlier, when Millicom and Arfeen split apart, exchanging their respective shares of both Paktel and Instaphone, the common wisdom was that Millicom, taking away the Paktel GSM brand with them and loading Arfeen International with the older TDMA leg of the joint Paktel-Instaphone operations will come out strong both as a brand as well as a service. However, less than a month after the official closure of 0303 Paktel TDMA services, this news of total Paktel closure has shocked all.

Insiders are reporting that the management of the Paktel has advised the employees to look for alternate jobs and that they shall facilitate the same. For a nationwide telecomm operator of the size of Paktel, that is a lot of telecom employees suddenly on the job search for the Pakistani market size.

The shake-out/consolidation phase that typically occurs in all liberalized markets initially is now appearing up. If Paktel decides to abruptly close down its services - something that seems unthinkable given over a million users using or having subscribed to the service - there would be lots of legal implications - floating liabilities being just one of them. On the other hand, if a graceful exit is being planned (which insiders insist is not the case given the signals that the management is not ready to bear even the opex) some probabilities could be plausible. Mobilink or Warid both could acquire the million odd customers of Paktel in a commercial contract. Whether or not these parties would be interested in acquiring the physical infrastructure of the outgoing brand is anybody’s guess. How does such an abrupt closure of the service is taken by PTA - the supposed lapdog watchdog of the telecommunication sector will also be an interesting watch.

Ramadan Rumours

Day-times during Ramadan are generally lunch-free with faithfuls fasting. But this does not keeps from interesting rumours from being crafted and moving around.

One such news rumour is that GSM giant Mobilink is/will/might acquire dominant stakes in Cybernet - one of the leading local Internet service providers. While insiders are generally confirming the rumour various details are being provided depending on whom you are talking to.

Cybernet has been a chief provider of Internet services to Mobilink. The dramatic exit of three or four top seat employees of Cybernet last month has created quite a stir in the local market. From employees to customers, there had been wide ranging speculations as well as a general anticipation of more-upsets-to-come. At that time, the sudden changes were attributed to some rift between the higher employed-management and the group financiers.

<rumour-dissection>Mobilink (read Orascom) is certainly focused on diversifying its portfolio. Not only did they create multiple companies to support the core voice operations of Mobilink, the diversification has gone into real-estate purchases, cement industries and even GSM Terminal Support services such as the one offered under brand name of Ring. A deal to acquire top-placed Internet service provider is quite in-line with their strategy. The Intel Capital’s fund aimed towards spreading of the Wimax adoption worldwide (and reportedly sized around $100 million) has gone into various Telecom holding companies including Orascom. Mobilink is one of the darlings of Orascom as compared to its other regional ventures and that significant portion of this fund will go into Mobilink is quite likely. Once Mobilink has a Wimax offering, it will definetly need a platform (license, brand, users, channel sales network etc) to toy with its beyond-the-voice ideas. There couldn’t have been a better choice than Cybernet.</rumour-dissection>

One of the interesting twist that is being associated with the current Ramadan rumour is that the very team that was quit Cybernet in a hurry is coming back now sporting Mobilink’s badges to run the company. Well, if this is true, this is what we can call Dramas in Life!

Daily Times on Wateen

Pakistan’s Daily Times agains come up with a FUD aimed right at Wateen. As I mentioned in one of my previous posts on this topic, news-analysis is one thing, direct personal on-slaught is another. From the article published today, September 19, 2006 (read full text here - registration required to read Daily Times [smarties can use bugmenot {firefox ext here} to bypass such absurd restrictions on news portals])

From the article:

Experts say that the management of Wateen is ominously reminiscent of the collapsed BCCI. “Huge salaries, perks and freewheeling executives are the common link,” claimed an insecure insider. Chief Executive Officer Tariq Malik claims to be a UK qualified Chartered Accountant but an examination of the list of members of the institute does not carry his name. The industry has been told that he is “a director on the main board of British Telecom” but this is not true because he was only an analyst on a Malaysian Telecom transaction by BT. Further enquiries reveal that he left the UK in a hurry without much explanation, giving rise to rumours that he might have been involved in some improper financial dealings. His last employer in Pakistan has alleged that when he left “he stole highly valued technical information including a request for a proposal issued by Warid Telecom in which the entire inside of the proposal inadvertently still carried our name!”

This is getting too direct even for news commentary I would say.

Warid Expands with Ericsson

Warid has announced that it is expanding its GSM network with the help of gear from Ericsson.

Ericsson has signed a US$274 million contract with Pakistan’s Warid Telecom that will see Ericsson undertake a major evolution and expansion of Warid’s GSM network, including its Mobile Softswitch solution, radio, transmission and packet core network equipment, as well as multimedia services.

Under the agreement, Ericsson will provide capacity for an additional 10 million subscribers through its mobile softswitch solution and the expansion of the radio access network in existing and new cities.

Warid and Wateen are two of the several company that the Abu Dhabi Group has opened up in the fast emerging telecom market of Pakistan. Wateen is the Transmission and Data Communication wing of the group while Warid was focused on cellular (GSM) operations. However, hallway-talks are pointing towards a brand merger of Warid and Wateen as the group is realizing the importance of branding as well as the fact that in the era of fast convergence, a single entity might serve the purpose best.

Wateen has already signed a contract with Motorola for the biggest wireless data network in Pakistan. Mobilink, the largest GSM operator in Pakistan with the SMP status, is also rumoured to be preparing for leap-frogging 3G and betting on Wimax deployment. The Wimax trials preparations are reported to have the roots in the Intel Capital’s funding to Orascom Telecom, the parent company of Mobilink.

Grown-up fights teething problems

‘Pakistan’s Favorite Cellular Service’ is once again reportedly having problems in its service for the past few days in Karachi (at least). Reaching a subscriber on the service from a landline is not possible. On-net calls (within same network) calls are as unpredictable as the weather of Karachi. Here is what is interesting about these ‘growing pains’ as the company would most probably call such problems:

• The service has already reached a subscription level that has earned it the label of SMP - Significant Market Power
• The service generates an awesome amount of revenue that is purely based on its internal network
• The network has grown up significantly enough to bear a fault-tolerant and re-routable traffic handling features
• The network (in terms of its size) is probably the closest approximation of an ideal network that a cellular operator could wish

Despite the cool milestones mentioned above (cool from the view point of any cellular operator operating in a dynamic growing market like Pakistan), it is really strange to find a reason for blanket outages that are currently being faced by the service users. Is it the core part? Is it the access part? May be the appetite for more users and under-dimensioning?

What disappoints an average user is the thought that if the most powerful, most resourceful and revenue-rich service like this could only offer an irksome service, what could be expected of the smaller guys. And oh yes, the magic-sim issue never got a clarification!