The Government in Pakistan hit on a perfect way to attract foreign investment in 2003 when they issued a manifesto allowing deregulation of the telecommunication industry which enabled the PTA to issue licenses for mobile phones, together with LDI, FLI and WLL licenses – all of which generated Rs. 30 billion for the Pakistani Treasury. Prior to deregulation, in 2002, foreign investment was simply US$ 6.1 million: this investment figure escalated to US$ 207.1 million by the end of 2004, with as much as US$ 8 billion expected as the de-regulation strategy continues to be successful.
This foreign investment is not just coming from the USA: the successful Norwegian telecom firm, Telenor, was one of those foreign investors granted one of the initial new mobile phone licenses. This company alone has plans to invest US$ 1 billion by 2010. This influx of foreign interest is very good news for the local people of Pakistan seeking employment, with the expectation that as many as 370,000 new job opportunities are likely to arise as the result of this swiftly expanding and developing telecom industry. This industry continues to exceed all expectations, with just 2.32 teledensity being the norm in 2000, to more than 3% by September 2004. The PTA expected at least 8% teledensity being achieved by December 2005.
Even in their wildest imaginations, the PTA did not expect Pakistan to achieve a teledensity of 58% by May 2008 – one of the highest in South-East Asia! According to a Staff Report, the Prime Minister, Mr Yusuf Raza Gilani was reported as stating that the telecom sector grossed $3 billion in 2007. The mobile phone industry has been so successful in such a short space of time that network congestion often occurs during peak hours. The PTA are deeply committed to overseeing a free and fair deregulated industry and, as such, are aware of what they see as a major problem, to the extent that they have advised the mobile phone companies to improve their quality of service – and are monitoring any improvements by issuing a countrywide survey. Any service that is below par will have action taken again the providers.
As part of its commitment to free and fair access to telecommunications, the PTA is investigating the use of Wireless Local Loop services to reach deeply rural areas so that mobile phones are available to all who wish to use them. Part of this commitment is to reduce the urban/rural divide, not just in terms of the digital divide, but by smoothing out any potential differences, they should achieve a more seamless society that integrates more fully into the 21st century. Introducing Wireless Local Loop services would increase teledensity dramatically throughout the country, possibly even attracting a further potential 15 million subscribers within a five-year period.
One of the smaller mobile phone providers is the company marketed as Zong that belongs to China Mobile. Zong is known for its aggressive marketing techniques and, while its hold on the market is just 6%, it is growing which is no surprise when you consider that, in 2008, it was the first mobile phone provider in Pakistan to offer GPRS/EDGE on an hourly basis for Rs. 15 plus tax at a time when all the other service providers were offering GPRS on a per megabyte basis [an expensive way to logon to the internet via your mobile phone]. Zong even made activation of this service a simple matter of just phoning a single number to get connected. That’s certainly marketing with a zing!