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.

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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>