Telecom Activity Roundup in AJK & NA

This report from Daily Times provides a good activity roundup relating to new Telecommunication initiatives in Azad Jammu Kashmir and Northern Areas. From the report:

In the wake of October 8 earthquake, the PTA granted temporary permission to mobile phone companies operating in Pakistan for provision of services in quake-hit areas. Later on, they were invited to obtain permanent licenses for AJK and NAs against the ILF of $10 million each.

Subsequently four mobile companies Mobilink, Ufone, Warid and Telenor acquired licenses by paying 50 percent of the license fee ($5 million) each upfront as per the terms of the payment. The $20 million (Rs 1.2 billion) collected by PTA from four operators has been deposited with the AJK Council Secretariat and Chief Secretary, NAs in the ratio of 77:23 based on the population of the two areas. Their share was Rs 927.696 million and Rs 277.104 million respectively. In view of special circumstances, PTA has not deducted any fee from the amount.

The fifth mobile license for AJ&K and NAs has recently been issued to CMPak (Paktel) for which the fees would be deposited under the same arrangements. All five mobile companies will pay remaining 50 percent (i.e. $5 million each) in 10 equal annual installments.

It may be mentioned that, with the introduction of mobile phone services people of these areas are getting enhanced communication facilities. So far, cellular operators in AJK and NAs have provided one million mobile connections. Mobile service is available in the following areas of AJK including Bagh, Bhimber, Bharhing, Kotli, Muzzafferabad, Palandri, Rawalakot, Mirpur, Dhirkot, Ghari Duppatta, Hattian Bala, Dhudyal, Barnala, Kakra, Islam Gargh, Dirkot, Chamankot, Baloch, Sehnsa, KhuiRatta, Hajira, Tarar Khel, Abbas Pur, Jaraee, Rajdhani. Thraowchi, Puna, Sumani, Charoi, Fatepur, Barnala, Paniola, etc. In Northern Areas Gilgit, Hunza, Chilas, Skardu, Shigar, Danyor have been provided mobile services.

Moreover, Special Communication Organisation (SCO) which was the major provider of telecom services in the region till very recent is working on its several developmental activities including Rural Telecom Uplift Project Phase-II for provision of 80,000 telephone lines (along with 266 km Optic Fibre), enhancement of GSM capacity by 65,000 lines, laying of 570 km optic fibre, 26 digital exchanges with VSAT connectivity and laying of outside plant (OSP) in NAs.

SCO is also planning to lay optical fibre cable link for international connectivity between China and Pakistan.

SCO has also taken initiatives to provide Internet services to these areas in the form of Dialup, DSL and CDMA 1X services by entering into O&M agreements with existing providers in Pakistan.

VSAT Hubs Mushroom

Pak Datacom is announcing that they are installing an iDirect VSAT hub.

Insufficient fiber and other wired infrastructure, limited range of existing terrestrial wireless technologies and a boom in ICT industry in Pakistan is causing an upsurge in the satellite services.

Banks and other financial institutions are one of the major drivers for remote area data connectivity market. New initiatives by the Government to introduce electronic management in its working is the often considered as the second largest factor driving the satellite services consumption in Pakistan.

Modern VSAT hubs are intelligent entities that make better use of the expensive and scarce satellite bandwidth resources by intelligently distributing the same to a large number of customers that are equipped with smart satellite terminals – costs of which is coming down as third-party CPEs made to a number of standards are getting cheaper. Installation cost and complexity for the remote sites is also coming down allowing better confidence towards the service by the end customer.

Lately, a number of network service providers have installed VSAT Hubs to service the growing data services sector. Supernet (iDirect), Comstar, Pak Datacom (wing of PTCL) and Multinet all have either installed or are in the process of installing VSAT hubs to complement their existing wired and wireless services.

The explosive growth of cellular services in Pakistan has resulted in the companies’ new quest to reach the untapped rural markets and in the absence of optical fiber backhaul, VSAT backhaul have picked up big times. Mobilink, Ufone and Telenor all have placed huge orders of VSAT backhuals for their base stations in far flung areas such as FATA and Azad Jammu Kashmir. The volume of the business has taken the otherwise go-slow network service providers by surprise and in certain cases, single orders placed by the cellular giants have been comparable with the annual volume of business done by the network service provider.

Cellulars Spends over $15m on Satellite Capacities

Telenor & Mobilink will collectively spend over 15 million dollars on satellite based capacities to reach the juiciest of the cellular markets in Pakistan. These markets are FATA (Federally Administered Tribal Areas) and AJK (Azad Jammu Kashmir)

There are many factors that make these markets irresistible for the cellular business. These places have remained under-served for various reasons. Political reasons, difficult terrain, extreme weather. The market remains a popular telecommunication service destination because of the people from these areas have been ‘going out for work’ to every part of the country and every country of of the world. This special nature of ‘half-migration’ which is particular to the population of FATA and AJK people paints a unique equation in term of calling patterns.

Calls are made from all over Pakistan to FATA areas by the hard-working Pathan population. AJK receives majority of its call from United Kingdom where a huge number of people with Kashmiri origins reside.

The AJK area has been served for telecommunication needs by an autonomous (but with a military background) organization called ‘Special Communication Organization – SCO’. The sector was opened up for other cellular and local loop operators under the current Telecommunication De-Regularization and Liberalization policies of the Government of Pakistan.

Telenor has been the first one to penetrate in these markets. With no traces of fiber going out from any of the major cities of Pakistan to these areas, the only option available to the cellular operators is to use satellite capacities to connect their networks in FATA and AJK back to their national network in the rest of Pakistan. Telenor is reported to have obtained satellite capacity and services from Wateen Telecom.

Enjoying an absolute majority in terms of number of subscribers, Mobilink is eager to catch up with Telenor by going the satellite route for its network expansion in these areas.

Volumes that are expected on these two routes warrants multiple transponder capacities on Satellite. Capital expenditures are high by the local industry standards and in some cases warrant establishment of dedicated service organization out of the requirements.

Until fiber makes it way into these far flanged areas, a good two to five years of Satellite operations are expected. Utilization should then start dwindling down to the role of backup and critical applications. Space segment sellers and Satellite Service industry in Pakistan can play happy till then.