Pakistan-India Fiber Linkup

There are more news about the Pakistan-India fiber linkup via the Wagah border (Lahore/Amritsar). Essentially, the project is inching, not leaping, further. As we discussed back in early 2006, India is said to be reluctant about the equality of the utility of the optical fiber. From the The News story:

It’s not a big issue, but it has to be resolved first before it gets operational,’ said a source close to the development. ‘There are more bottlenecks on the Indian side compared with Pakistan, as India believes the project would benefit Pakistan more.’

An optical fiber link is also being established between Pakistan and Iran.

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Schools Need Networking, Not IP Transit

When it comes to providing modern digital communication facilities to the public Universities (‘schools’ in US), we have come a long way. This scribe used a 14.4 kbps dialup modem along with a very early version of Linux Slackware back in 1996 to connect a UUCP server set up at NED University of Engineering & Technology which was in turn connected to internal network of the university. Users could telnet to the UUCP server and use PINE to read and write emails. A single nodal account from the UNDP’s sponsored SDNPK initiative allowed the students of the university to own an email address (quite a novelty at that time in Pakistan) and interact with others on the Internet.

Fast forward to 2007 and things have changed remarkably. Most of the public Universities now have a high-speed (2 MB to 8 MB and even higher in some cases) Internet connection coming to their IT center which in turn feeds the campus network. Initially, this was delivered as distinct circuits by (the then) public PTT (PTCL) carrying Internet transit bandwidth. In late 1990s, the government used to ask commercial ISPs to provide free of cost Internet circuits in lieu of certain tariff cuts or overall sector responsibility.

Under Dr Atta ur Rahman’s various initiatives at HEC (Higher Education Commission) were taken and Pakistan Education & Research Network (PERN) was envisaged to allow greater interaction between the schools in Pakistan on patterns similar to the North American schools. The details about PERN are interesting. From PERN’s official website:

Pakistan Education and Research Network (PERN) is part of the overall vision and objectives of IT Action Plan that was launched by Prof. Dr. Atta-ur-Rahman as Minister of Science and Technology. The project is financed by the Government of Pakistan in cooperation with PTCL (Pakistan Telecommunication Company Limited) Research and Development funds. The network is designed, operated, and maintained by NTC (National Telecommunication Corporation). The project is aimed to be an integral part of the overall Education System of the country and is designed to interlink all Public / Private Sector Chartered Universities / Degree awarding Institutes registered with Higher Education Commission, Government of Pakistan.

and the network details:

Existing Optical Fiber System of PTCL/NTC and IP/ATM backbone of NTC is utilized for the CORE network of PERN. The network design of PERN consists of three nodal points at Islamabad, Lahore and Karachi. The educational institutions are connected to their respective nodal point by a 256 Kb/s to 6Mbps link from the nearest exchange of NTC/PTCL using OFS, DXX (or better system), DRS or VSAT, whichever is technically feasible. Routers are installed at University premises by the Universities to provide connectivity with the access routers from the nearest node. The three nodal locations are interconnected on existing optical fiber system and terminate the Internet facility in the pool. Currently, the interconnection of three main nodes is on 34×34 Mbps and Internet connectivity is 65 Mbps for Islamabad, 33 Mbps for Lahore and 57 Mbps for Karachi. The bandwidth will be increased as per requirement. This architecture allows institutions to pool resources with each other through national fiber network and to access Internet from the respective nodal points.

APP has a report on PERN participating Public universities now getting four-times the amount of Internet bandwidth from PTCL at the same cost and the private cousins getting double the amount of Internet bandwidth at the same cost – all this for the sake of furthering the education cause in Pakistan.

The problem with this scheme of things is that we do not need transit Internet capacity in the university beyond a certain limit that would allow easy access to most of the resources on the Internet. If the whole point behind PERN and other such initiatives is the growth of network centric intra-school academic activitie, transit Internet bandwidth doesn’t stand as the first goal that needs to be pursued. Enabling high speed, optical fiber based circuits between the schools and equipping the back end hardware and humanware needs to be set as the target. Once the students studying and doing research at these public school get addicted to the digital facilities such an all-optical-fiber-network can provide, the results will start coming in the shape of increase collaboration (without the need of any connection beyond Pakistan), digital document storage, recovery and exchange, and increased upgrade of the humanware that run and use this network. Doubling and quad rippling the transit Internet capacities stands the risk of allowing better downloads of Youtube, easier song swapping and fun with bittorrent!

Ufone Follows Mobilink – Launches Voice Portal

Following Mobilink’s recent launch of a voice portal (covered here) titled ‘Mobilink World’, by-lined ‘Sab Batata Hai’, Ufone has also launched a voice portal. This one is titled ‘Utalk’ and by-lined as ‘bool kay suno’ is accessed by dialing 777. The IVR assisted voice portal has songs, jokes, recipes etc but as noted earlier, voice portals in Pakistan, like most of the other places, are still short of being a real voice-driven search platform which could be of immense relevance to the local population.

Telecom Sector Estimates

Pakistan Uncut has a review of the latest installment of PTA Quarterly Report on Telecommunication Sector in Pakistan here.

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.

Various Strategies for Infrastructure Issues

Pakistan has a considerable geographic spread and a populous rural footprint. If cellular services are to be taken forward, better, practically working coverage is required. Pakistani cellular operators understand this and are trying different strategies to cope with the challenge.

Back in 2002, Paktel and Instaphone entered into an infrastructure sharing agreement that allowed both the operators to use single civil facilities for putting up their cell sites. Ufone was a government owned concern so they had little incentive to move in any such direction. Mobilink was a GSM entity and was (at that time), the odd-man out from this alliance.

When Warid and Telenor entered Pakistani market, each had deep pockets filled with forex and lack of local industry trends and social domain information. They went ahead with building their own infrastructure initially.

Fast forward to mid 2007 and everyone now knows about Pakistan, its territory, politics and social landscape. Mobilink has emerged as a giant and the rest of the players are desperate enough to forge infrastructure level friendship!

First, Telenor and Ufone sign an MoU (and incorrectly call it ‘the first of its kind’, forgetting the Instaphone/Paktel deal on same lines way back in 2001~2002) to share their infrastructures.

Now Warid is reportedly joining the duo to form a troika which is very obviously set against Mobilink’s impressive coverage of 5,000 towns/locations across Pakistan. From the Daily Times’ report:

Currently Mobilink is covering over 5,000 cities and towns with over 6,000 sites, Ufone is working in over 750 cities and towns with 1,108 sites, Telenor is operating in over 1,100 cities and towns with 2,900 sites, Warid is active in over 210 cities with 1,200 sites and Paktel working in 218 cities with 893 sites. These all operators cover 70 percent of the population with 35 percent geographically. The MoU is the first of its kind between the two leading mobile phone operators in Pakistan. This is a welcome initiative for the industry, as it will help reduce costs of companies in developing separate sites for their networks.

Paktel has a different strategy for itself. With supposedly cash flow issues resolved, thanks to its China Mobile acquisition, the Paktel management is asking its employees to be part of the network in more than once sense. An email circulated to the employees to this effect states:

Dear All,

You are all aware that with a view of Network expansion, CMPak has awarded contracts to various vendors for establishing ‘Base Stations’.  Consequently, we would be establishing sites throughout the country.  To make the employees as partners, the Management encourages their participation in site acquisition process.  If any of the friends / acquaintances is willing ‘To Let’ property (on rental basis to CMPak) for establishing the sites, employees are encouraged to forward details of such property.

Management is pleased to announce that if any of the sites (referred by the employees) is judged as ‘Prime Site’, the referring employee will be offered ‘Special Reward’ by the vendor.  However employees are strictly forbidden to contact technical staff i.e O & M and Roll out Teams.

The MoUs might be a sad news for aspiring three-storied house owners each of whom had been wishing to generate an additional income of around Rs 40,000 ~ 50,000 per month by renting out her rooftop for the cell site (and, in some cases, enjoying free generator-based electricity during the frequent power outages in some cases!) . However, this should bring a sigh of relief to concerned citizens about the deteriorating cities’ landscapes which, now across Pakistan, are littered with such towers with zero efforts made toward any possible camouflaging of the same.

Its The Network, Stupid!

PTCL has recently updated its tariffs for Internet bandwidth that most of the Internet Service Providers in Pakistan subscribe to. The new rates reflect a 37% reduction. A transit Internet capacity of and E1  now costs $1,000 per month ($500/mb). The new rate table is:

S. No.

Speed

Charges (US$)
Per Month
At Karachi

Charges US$)
Per Month
other than Karachi

1

2 Mbps

1,000

1,200

2

45 Mbps

15,000

18,000

3

155 Mbps

30,000

36,000

Due to obvious reasons, this blog had been following bandwidth’s price reduction in Pakistan. We have seen the price of 1 E1 coming down from  $6,000 per E1 to the current $1,000 in around four years.

Transit bandwidth costs getting lower means better business costs for ICT enterprises. However, for ISPs whose business in Pakistan was thriving on the ‘scarcity and preciousness of bandwidth’ will get effected fundamentally. Until now, ‘building’ out the access network had not be a top concern of most of the Internet service providers in Pakistan. Selling any precious commodity – be it bandwidth or saffron, typically becomes a business where needy customers will come to you and you can make your margins on the the transaction.

With bandwidth prices getting more aligned with rates of the same elsewhere,the question of ‘owning your users’ (or, in other words, building your network) would gain importances. Typical ISPs today have a number of wireless or optical fiber links from their prime customers coming from various location (in each big city) to (typically just one) their facility which has bulk bandwidth  provisioned. The higher costs of bandwidth in Pakistan had traditionally allowed ISPs to hide the high costs of such isolated last miles within the total price of the deal and get away with this inefficiency of (not building an access network of) their own.

Lower bandwidth rates, widely advertised and discussed, will now prompt the customers to question the selling cost of the bandwidth. This will quickly point to the fact that in a poorly provisioned general telecom environment (bad copper, lack of fiber etc.) the absence of ISPs own access network is contributing to the total cost of the link.

ISPs will now be forced more than ever to build their networks in major cities to make sure that transit bandwidth still remains the only major element in their offered prices to their customers. Current practice of high price wireless and fiber links (all being pulled to a central location) must go away.

It is also important to note that PTCL has now, for the first time, started making the price differentials between Karachi and upcountry obvious.  The cost of carrying the bandwidth from Karachi (where it typically enters Pakistan via the submarine cables) to up country has always been there but has always been absorbed in the model and the industry has been presented with a uniform rate across Pakistan. The new private ownership of PTCL cannot afford such political luxuries and is making the costs obvious in its tariffs.

This should also send a ‘think-again wave’ to TWA and other operators who were planning to offer transit Internet bandwidth on uniform rates  across Pakistan. TWA was reportedly banking on the transit capacities across Pakistan that it is taking from Mobilink’s under-construction long haul optical fiber network. Unless the capacity comes free of costs, the price has to be paid either by the customers or subsidized by TWA which appears to be unlikely.

Summarizing, booming bandwidth consumption and lower bulk bandwidth costs are pushing up the pipe sizes for Internet across Pakistan which makes networks costs considerable. Considerable network costs mean that they do not get subsidized anymore and for end ISPs, owning their network will start making more and more business sense. Is the lot ready?