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.

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28 Responses to “Pa(c)k(up)tel?”

  1. Syed Umar Says:

    Although personally its sad to see the company I started my career from finally pack its bags. But in the long run, maybe it is good for the industry and will bring some sanity in an otherwise hyper-competitive market.

    I’m wondering who would acquire all the Paktel sites nationwide -Instaphone?

  2. Farukh Says:

    ohhhh shit, so mnz i do not have to recharge my Talkfree package ,,,, Hey Paktel Plz !!! dont do this with us ,,,,you are the best ,,no one offers free talk on mobile tht was frst time in the history of cellular communicatin tht any company offered such a fantastic package,, Heyyy you cant go like this in the hands of Cheaters like Mobilink nd telenor Uff i hate telenore alwayz advertise thier rate for half minut and when you make it double its not a worthy package on per minut rate anyways Paktel i will always remember you ,,, 😦

  3. Syed Fahad Zeeshan Says:

    its a bad news not only to the ppl who are currently employed in Paktel but will be a greater impact on the teleco industry. the most hurt ppl will be the fresh grads as they will be facing the great impact form the experience ppl( if the Paktel closes). I pray that Allah may make it win-win for all of us.And the slient authorities like PTA should also revise their policies and strategies related to the interefereance issues and licensing.

  4. Abbas Raza Says:

    Dear Paktelian,

    It is a very bad news for paktel guys.its not a way to getrid of their employees and packup the company.also the subscriber shall not be rely on any operator.

    I thinks a new operator should buy this network or the existing companies have to control the network

  5. Umer Says:

    It is really a shocking new for all the operators of Pakistan.

    At least MIC should think for his:
    1. Customers (1.5 Million)
    2. Employers (About 1000 head counts)
    3. Coworkers (About 1000 ppl)

    What will happen to them?
    It will indeed bring a bad effect on investors and gradually on economy.

    I think someone specially the other operators should come up and take over it.

  6. Mohib Says:

    It was a very strange and astonishing news as far as i am concern that i telecom company which was pioneer in pakistan couldnot match the competition with the other companies ,but it will be great challenge for some new firm to accept this by taking charge of this from the start nad i wuld like to see again a foreign firm taking interest in it.
    Especially Vodafone

  7. Inspirex Says:

    Actually its highly likely that Paktel will be acquired by another company…..there are entities out there that want to take advantage of the 15 year licence renewal fee breakdown….warid and telenor had to pay up front….

    and the area is wide open who has pockets deep enough…its not over yet….

    Sounds really weird I know, but Ive heard the same about Insta too.

  8. Blogbuster Says:

    Well! It should not come as a surprise. PTA has always provided unnecessary advantage to Mobilink. They never paid the spectrum license fee, have 35% of the 900 MHz spectrum (highest than any other GSM operator),carry most of their traffic on 900 MHz, have the best Microwave spots & get the best srategic places in Cantonment & Government areas at minimalist rates to install BTS sites.

    Contrary, Paktel, Warid, Telenor & Ufone have to beg for even simple benefits that are bestowed upon them like “lavish donations from Government of Pakistan”. Just to mention, three parties are paying US$ 290 million to GoP & running massive advertisement campaigns.

    The Paktel exit is a clarion call for PTA & Government of Pakistan to note that Businesses also need governance cover like citizens do. They do not just work on the orders of some retired General Sahib / Col Sahib. Businesses need solid assurances & constant help from the governement.

    Cantonment authorities have charged Rs.60000 – 90000/month for a single radio site in their areas in metrocities like LHR, KHI & ISB/RWP from the new operators. Civil Aviation Authority is reaping Rs. 100000/month from TeleNor for BTS installation at Lahore airport.

    Excuse Me! Are these enterprises some cash cows that, the military bureaucracy believes, can be milked infinitely.

    The pop-corn economics era of Musharraf non-democratic regime is coming to an end.

    Get ready for another age of “nervous 90s”.

  9. Junaid Javaid Says:

    I know just one thing!Its going to give some serious challenge n competition to the telecom newcomers!

  10. AD Says:

    Paktel’s packup is sure & not so sure, according to people having various ‘inside’ sources.

    One view is that they are surely gonna close down with MIC’s high-ups flying off. PTA is concerned about that too. That’s why they’ve clearly said that they don’t care if Paktel closes down but Paktel has to pay the $29m before they exit. So much so, that it is believed that PTA has put X (Paktel’s CEO) on the ECL – Exit control List – so that they don’t just run away with PTA’s money. If Paktel somehow fails (read declines) to pay then the legal suit will follow with the liquidification of Paktel’s assets to come next. PTA will then allocate all the 0303/0304 users to Mobilink as it makes sense – it’ll complete Mobi’s dialcode series – a good & a bad news for users who like or dislike Mobilink.

    Another view, rather interesting one, is that this is all a tactic to pressurize the PTA & the Govt. But is PTA or our Govt going to care about the hundreds of people whose sole ‘bread n butter’ is Paktel let alone the millions of users. Some also say that MIC has earned their share of money from this part of the world & now they want themselves out asap. That is why many finers are pointing towards MIC instead of PTA.

    My point of concern is the (Insta’s) boat stuck in the (Paktel’s) pond !

  11. sheraz Says:

    Well….really shocking not only for customers but for persons seeking a telecomm career. Means fresh candidates will be screwed again by and ov erall image of telecomm market of Pakistan will be suffered as well……….

  12. Media Watch Says:

    The watch dog is more interested in the money.

    “Paktel had to pay $29 million on account of licence fee installment in the first week of November 2006,” said a senior official who asked not to be named.

    “But they failed to meet the deadline. Now we have learnt through media reports that their parent company (Millicom International) wants to close it (Paktel) down but they have to clear their dues before the final decision.”

    From http://www.thenews.com.pk/print1.asp?id=31943

  13. waqar Says:

    i think this was obvious with PTA being biased for Mobilink in many matters already indicated in these posts.
    something that the government needed to realise was that it doesn’t work one way. there are certain obilgations of PTA/governement to sort out issues with operators who have inversted more money in Pakistan than people whould have ever thought of a few years ago.
    the failure of Paktel/MIC to survive in this market is an eye opener for the Government/PTA and a reminder of their failure as a regulatory body.

  14. Farhan Says:

    Regulator should think on Millicom’s action. What benefit they are getting from it, by giving license to two new operators (Warid+Telenor) and by losing two licenses (Instaphone+Paktel). Losing the license means that new operators are getting profit and other two are losing money, its my personal opnion. Nine out of fourteen LDI’s are just couple of steps away from losing their investment. This is not how you make the stratgies.

  15. Inspirex Says:

    I personally feel that every sector, when opened up for investment, attaracts a lot of people, but only a few stick in each.

    Thats whats happend to ISP’s, thats what happened to LDIs and thats what happening in Mobile.

    You actually want a few strong players with worldclass services ( still far in pakistan) rather than many having small slices of the pie.

    Banking sector is an example in progress.

  16. Timeless Says:

    Sad, though I still believe that closure wont happen somehow but still this will have an impact on everybody, Industry will overall suffer including operators, vendors and above all resources. Can cause panic as telecom investors would now want to sit back and reassess their strategy in Pakistan. PTA needs to come up with something now or else should also pack and leave.
    Timeless

  17. Moosa Says:

    With all the comments above I feel that most of guys blame every thing on PTA and Mobilink. I believe that if u wanna survive than u fight and made strategies which help in urs survival and fight against competition. Remember that every thing is fair in WAR (competition) and LOVE (profit). During the past time mobilink made strategies either from marketing point of view or public / govt relation. They also use new emerging technologies. Don’t think that they have investment ….. at last they get what they want .

    Look a new comer WARID, it work on the same way as mobilink, may be they use pakistani politician or govt policy maker……. But they are surviving …… and may be after some time it will be a Giant.

    What I feel with MIC, they want less attention … less investment … and BIG profit.
    And in my view its not possible in current market scenario.

    And the other thing may be I am wrong … I feel as the future Politic of Pakistan is going to change may be PPPP get involved with INSTA (consider it deeply).

  18. Muhammad Hashim Says:

    AoA

    In fact, the Paktel is a fraudulent company. It cheat every body. Its main policy is Divide and Rule. I may quote many examples, by which this Paktel company betrayed the people from their money. Just to sava its a single penny, it may cause you loss of $1000.

    The Paktel unilaterily cancelled all its franchisees with any notice and alternatives. It forced us to bear lossess of millions of rupees, saying, we are just to enter an era of golden days.

    The role of PTA is also doubtful. One of our friend, who filed a suit on Paktel, when contacted to PTA for help, he was told that we (PTA) cannot do any thing, as the matter is in the court. When another friend contact the PTA, he was advised to file the case againt Paktel.

    This is correct, the Paktel provided packages like Talk Free to the customers, but the cost of these packages was borned by the franchisees, the lack of quality service and many other issues.

    Paktel used to sell to franchisee Paktel sim on the cost and the same sim was privided to DSO, free of cost. In this way, they caused millions of rupees loss to their own franchisees.

    They always kept giving bluffs, by saying, just wait for some time, the situation is about the improve. You will earn a lot. But proved to be illusion.

    The only and the only responsible for this current situation is Paktel himself. I think they are earning about Rs.5000 millions annually, from Pakistan. Out of this money, they are to pay Rs.1800 million for lience and and Rs.1300 on taxes. Now they have remaining Rs.1900 million. This amount is sufficient for any business. As the PTA is presssing hard for quality service and they do not spend money on network improvement. This is the real matter. This is also evident from the wording of press release dated 13.11.2006 of MCC.

    Any how, we all want departure of MCC from Pakistan in decent way. I see existance of Paktel in Pakistan, but without MCC. I totally endorse the statement of PTA to recover its licence fee from Millicom. Besides this, I also request you all to help and cooperate in paying lossess caused by Paktel to its business associate franchisees.

    But, as they do not want to invest on the Network,

  19. chudhary Says:

    Whoever is successful in striking a deal for Paktel, the first thing they should do is to come up with a new brand name; they may or may not have the Paktel brand running parallel in the future.

  20. What's In a Name? « Tee Emm on Pakistan Next Gen Issues Says:

    […] owing to the wordpress.com blog ban in Pakistan.  The last story before the disconnect was about Paktel which, at that time, threatened to stop its operations because of the losses it was making. In […]

  21. Zeeshan Says:

    I was v sad after listening these rumours of the closure of the paktel and instaphone company and now i am absolutely and completely shocked after listening that company is gonna b closed with two big names PAKTEL and INSTAPHONE will b no more there in da market, and we will have to face the poor company like Mobilink and Ufone +o( since they show something else and charge something else same as telenor Does. PLEASE INSTAPHOE DONT GO…its a matter where all companies sit together with paktel and assist them if they need cz closing these two big names and their coustomers may never b able to believe any other company. as who know when will they stop da service and run away??
    what will happen with their coustomers since m hearing that total telecom will take over instaphone? will da packages remain da same?? da talk free package will remain there?? i really wanna know abt it being a coustomer of Instaphone since 1993.
    ANXIOUSLY waiting

  22. Shah Says:

    Ooops INSTAPHONE & PAKTEL Save us from these big thieves Like Mobilink Ufone Telenor these all suck… Ur Packages were Sooperb and we never took away our hands from paying all ur monthly bills.. Please Dont Leave us alone. WE TRUSTED YOU, WE STILL TRUST YOU. we know that u wont Leave us all alone in da middle of no way… Mobilink Sucks +o( Liars and blah blah INSTAPHONE AND PAKTEL IS MY LAST HOPE AS OF MANY MANY MILLIONS OF OTHER COUSTOMERS..

    INSTAPHONE
    &
    PAKTEL
    ^^^^^^
    LOVER

    shah jee from Rawalpindi cantt lalazar 0320 4533330

    • zohaib Says:

      i really appreciate you warid are big thieves all ways over billing of 5000 Rs in my bill in every month and when i take the bill to there business center they say next time it will not happen and it happen again and again

  23. Nice1 Says:

    I was recharging my paktel talk free every month, they were always sending SMS before expiry of package, but this month in July Paktel didnt send me alert msg about expiry of package and they expired my package and said u cant subscribe this package again. I am using this package from 9 months from which time I buy Paktel & was spending 1000 to 1500 Rs monthly, It is not fair that Paktel didnt inform me and expired my package and now I am not able to re-subscribe. Atleast Paktel should care of old customers and of those Customers who are spending lot of money on Paknet usage.
    I really need Paktel talk free, cause I am talking only with one person through Paktel free and that person is my heart, my life, my love.

    If any one have Talk free package active Sim, please inform me on my email true_friend2200@yahoo.com I want to buy from you.I am in Peshawar, so Peshawar Paktel Customer should contact.

    I will always free for you.

  24. Muhammad Tahir Zia Says:

    Dear sir i have tomuch experience in telecom+GSM fields ,i want to join with you. thanks

  25. Telecom Industry in Pakistan - Waridtel Mobilink Ufone Telenor Paktel Instaphone With news information and reports » Blog Archive » Future of Paktel Says:

    […] topic in the industry. Many have commented and voiced their opinions and concerns as well – see TM’s post on this. There have been many rumours in the media about Paktel’s future but no official word […]

  26. zohaib Says:

    paktel change its name in zong nothing else u can see in Si menu paktel name

  27. zohaib Says:

    Paktel change its name in zong nothing else u can see in Sim menu paktel name


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