Broadband Penetration – MoITT, USF @ Work

Universal Service Fund (USF) is the company formed to make use of the USF money that PTA has been generating out of the booming telecoms market of Pakistan. So far, USF has worked towards using its funds for the spread of voice services in the under-served markets of Pakistan. Of late, Ministry of Information Technology & Telecommunication has intended to guide USF to do the same towards increasing broadband penetration too.

USF, after some initial work, has concluded that there are no particular areas that could be defined as ‘under-served’ in terms of Pakistan and rather the entire Pakistan is under-served. USF has now asked MoITT to pass a ‘determination’ towards the same fact allowing USF to utilize the funds anywhere and everywhere in Pakistan.

MoITT has published a 39 page study document on the web which seeks to establish this fact (that the entire Pakistan is under-served in broadband services). A consultation session was held in Islamabad yesterday to discuss this matter with the industry. The proceedings and details of the session are still to come out but here are my initial takes on the document and its contents:

The  major conclusion points of the documents are:

  • Pakistan’s broadband penetration is very low
  • Currently there are around 100K Broadband subscribers which need to be taken to 1.6 million by 2010 (1% of population)
  • This low penetration is earning bad scores for us under the WSIS measuring criteria & there is a strong need to improve the same
  • Three approaches have been suggested for the GoP’s intervention in this ‘dismal’ state of broadband affairs:
    • No intervention – leave it to market; slow broadband growth expected
    • Bundle with Basic Services – only rural areas will benefit; existing broadband provides will loose
    • Tackle issue with a new format – dedicated efforts are expected to yield better results; divided in various phases

The document assumes or maintains that fixed broadband is a dwindling trend and wireless broadband will finally prevail (page 23). While this is true for the last mile domain, the infrastructure is ALWAYS wired (read fiber). The guys at the MoITT need to be pointed to this omission in consideration. Pakistan need to have a good wired infrastructure before we can decide which of the two last miles options (wired or wireless) is good for us.

The study also repeatedly mentions the similarity between low tele-density and low broadband penetration. However, the applications/demand side difference between the two (voice and data) is repeatedly ignored. While it is true that the gap between 2.7% tele-density (from where our telecoms boom started off) and current 50% tele-density was one of the reasons for the boom, it was the application (voice) that was ready to exploit this gap. In the case of broadband, a similar gap exists and this gap is what the study is considering as an opportunity. However, as obvious, the difference between our last success (in cellular voice) and current challenge is that of application – do we have compelling applications that will drive the growth that can ride this gap?

The document also does not considers demand creation at all. While supply end enhancements (by way of USF subsidies towards network deployments etc) are more than welcome, a significant portion of the efforts must go towards demand creation activities. Mandatory use of electronic facilities in the business circles, tax cuts for ISPs interconnecting with each other, financial benefits to private TV channels to host streaming servers inside Pakistan, creation of public/open Internet Exchanges etc are all example of such efforts.

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6 Responses to “Broadband Penetration – MoITT, USF @ Work”

  1. Sohaib Athar Says:

    Just stumbled upon your blog after posting a long rant on this thing called moit 🙂

  2. Broadband Penetration in Pakistan - Is Pakistan underserved? at wiredpakistan Says:

    […] The  major conclusion points of the documents are: […]

  3. Jassim Says:

    PTCL should lower their rates…sell their bandwidth to ISPs at decent cost. Ain’t now way Pakistan will achieve 10% internet penetration rate by 2010 🙂

  4. Broadband Penetration - MoITT, USF @ Work | Tea Break Says:

    […] This cup of tea was served by: Tee Emm on Pakistan Next Gen Issues […]

  5. AA Says:

    There is talk of quantity and not quality of services. No matter how good things are they start to home in towards south.

    -PTCr*pL DSL User

  6. Obsessive Compulsive Symptoms Says:

    i am new in ptcl field so i read your blog this blog is very help for me thanks


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