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Fatal Assault on Telecom Sector of Pakistan

By  | 18, Sep 2013 | 22 Comments

original Fatal Assault on Telecom Sector of Pakistan

By Asher Minhas

Pakistan Cellular Market has emerged as one of the most competitive sectors of the economy. Today we have more than 125 Million Subscribers and the cellular mobile Teledensity has crossed 70% mark. The industry is largest contributor of foreign direct investment, 2nd largest contributor of GST, 5% contribution of annual GDP of Pakistan and provides approximately 1.5 Million direct and indirect jobs.

It is an irony that despite all these positive indicators most of the cellular mobile operators today are incurring loss. The growth in cellular mobile sector which mostly started during the Musharraf regime has slowed down since 2008. Cellular Mobile services which are globally considered as a driver and economic growth are projected as the main facilitators behind all the terrorist activities in Pakistan.

An environment has been created wherein it has been portrayed that all terrorist activities have been planned and co-ordinated through cellular mobile phones. It has been portrayed that today there is no check and balance on the issuance of SIMs and anybody can get SIM on anybody’s name.

The law enforcement agencies have also quoted that today more than 4.5 Million unverified SIMs are available in the market which are mostly used in the terrorist activities, however despite repeated requests no source of this information has been shared.

It is very important to set the records straight that it is the responsibility of Pakistan Telecommunication Authority and the Government of Pakistan to share the Standard Operating Procedure (SOP) for issuance of SIMs. Historically pre-activated SIMs were sold in the market. However in 2007 as per the directions of Pakistan Telecommunication Authority the transition was made from activated to inactive SIMs which were activated subsequent to NADRA verification. The process was changed once again in 2009 as per the directions of Pakistan Telecommunication Authority when 789 system was deployed. As part of this system all the SIMs were activated after NADRA verification based on the details available at the CNIC of the subscriber and additional secret questions including mother maiden name and the place of birth.

This was assumed to be a fool proof system and cellular mobile companies invested billions of Rs. in this system. However during the meeting with the CEO’s of cellular mobile companies held on 6th September 2013 under the chairmanship of Secretary Interior, the interior ministry officers informed the participants that the NADRA data including the secret questions is available in the market by paying mere Rs.200 thus rendering the 789 based verification ineffective.

Thus the billions of rupees spent by the cellular mobile companies on the deployment of 789 system have gone down the drain only due to security breach at the NADRA end. Now the Government of Pakistan has proposed biometric based system for the verification of subscriber identity and expects cellular mobile companies to again invest billions of rupees in this verification system.

However the biometric based verification system has not been used anywhere in the world for SIM issuance purpose. The biggest nightmare for the cellular mobile companies which the Government of Pakistan has failed to realize and foresee is that while previously NADRA database was selling, now it is apprehended  that biometrics will also be available in the market which can be used for all sorts of criminal activities and property transfers.

It is high time for the government to review the worsening situation of the telecom sector. The profitability of the cellular mobile business has evaporated during the last few years. The ARPUs have shrunk while the operating costs have increased due to high impact of inflation in fuel, HR, government NOC’s and operations and maintenance costs.

Although the Cellular Mobile Policy recognizes the Right of Way for cellular mobile network deployment, however today there is no unified policy for Right of Way and different Municipal, Cantonment and Defence Housing Authorities are charging NOC fees as per their will in complete disregard of the approved laws of the land. Even in these tough times when most of the operators are incurring serious losses, instead of get any subsidy from Government of Pakistan, the licensees are subject to hefty license and regulatory fees.

The situation demands intervention by nothing less than the Honorable Prime Minister of Pakistan. The Honorable Prime Minister is holding series of meetings on the power issues, it is very critical that he must spare some time and invite the CEO’s of all cellular mobile companies to listen to their point of view.

These are all multinational companies who have invested billions of rupees in their telecom infrastructure and deserve some respect from the government authorities. Unfortunately we have left these strategic investors at discretion of the baboossitting at the helm of affairs.

Apparently the companies have also started to lose their patience which was first witnessed when CEO Telenor publically informed that it would be very difficult to commit investment in the upcoming 3G auction given the adverse regulatory and tax regime.  The Government needs to take immediate measures to improve the confidence of the strategic investors in telecom sector, otherwise any negative sentiment in this sector will have long lasting and far reaching consequences on the overall economy of Pakistan.

Author is a Telecom expert and works with a mobile phone company.

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  • Aamir Saeed Shah

    aik nazar idher bhi

    • Faisal Basra

      Interesting…

    • Ammar Haider

      thanks for share with us

    • Ta’amil Miskeen

      If NADRA ‘s system is open for everyone for a small amount of money, you blame it on the cellular companies. The NADRA e-sahulat network should be either terminated or reformed so that nothing of this sort is possible.
      The author has already discussed the above point so its a lame post.

    • m,yasir

      thanks for sharing

  • http://GraphicNeed.com/ M.Aswad Mehtab

    Actually this is the hole these telco companies dig for themselves … They are selling sims like bananas… 1 free with 2 and no record what so ever … and YES most of the sims are used in fraudulent , terrorist , and other criminal activities . no doubt about it at all …

  • http://www.emagine-group.com/ Khalid Muhammad

    Aamir bhai – There are a couple of things that I want to point out in reference to the article.

    First, the whole unverified SIMs problem is a smoke screen for the inability of the Law Enforcement Agencies to curb terrorism. When the requirement of getting a SIM activated is having a CNIC card and NADRA officials are selling CNIC cards to anyone willing to pay for them, the whole point of “verified” SIMs is lost. We need a better system to confirm that the person getting the SIM is actually a real person. Maybe we could use something like NTNs instead :)

    Second, the profitability of the cellular companies is not controlled by the government, but by the cellular companies themselves. When their main interest is creating and launching packages that minimize revenue while giving maximum services/connectivity to the consumer, the profitability margins sink. It is not a hidden fact that the bulk of cellular customers in Pakistan are pre-paid users. Prepaid does not translate into loyalty, but price conscious.

    We all have to admit that the cell market in Pakistan is in its infancy still and there is still time before it grows up and acts like a proper industry. The cellular providers should be focusing on converting customers from prepaid to postpaid to create a true loyal customer base that is regularly paying a bill, rather than buying a scratch card for the free benefits of not using their SIM for the past 3/6 months.

    And before you start saying that they can’t afford it, please look at the phone that you are carrying right now. Is it a Samsung or iPhone? If you can afford a phone that retails over Rs. 50K, you can afford a post-paid package, which will give you more benefit and security than the prepaid one. The only difference is that you would have to pay a security deposit and a monthly bill, which is most likely going to be lower than what you pay for your prepaid service in a month.

  • Rao

    “Unfortunately we have left these strategic investors at discretion of the baboossitting at the helm of affairs.” thats it! the babooons rule this country.

  • Asim

    if the cellcos were in loss don’t you think they’d have close their businesses by now? Who runs their business if they’re in loss.

    • LossMaker

      Easy, the answer to your question is…
      The Government of Pakistan…
      Steel Mills, PIA, WAPDA, HESCO, LESCO, the list goes on and on…

    • Ta’amil Miskeen

      Some have already decided to get out of this business and are for sale due to losses. Don’t worry they will merge into others. This will reduce the competition developing a monopoly. The prices will go high and all of those who have been enjoying cheapest call rates will have to pay from their noses.

      • LossMaker

        I prefer the security and safety for my family rather than enjoying mobile facility knowing some terrorists may Heaven forbid be using it to put my family in danger.

        The SIM verification with finger printing is the right thing for government to do. The excess taxes on telecom sector are not justified however.

        I feel they should remove WHT and and reduce GST to make it viable for operators to operator their business profitably but also provide strict measures that no jaali SIMS are given out.

  • Yasir Mahmood

    Thats Truly Alarming Situation For Security Agencies and by issuing illegal Sims ,Telcos are Fully Involved

  • Sleepless

    The telcos cannot forsake responsibility for the mess which has also been created due to their unfair and unethical practices. As a telecom insider, I know how sales targets are set for sales staff/franchise. The targets are so steep that it is impossible to meet them without fraudulent sales. This is where the mess began… impossible targets. Heck, there came a point when people were distributing SIMs for free… without any documentation. One you let the genie out of the bottle, it is very difficult to get it back in.

  • Usama

    Nadra, Govt, and Telecos. Everyone was responsible for this situation.

  • adeel

    However the biometric based verification system has not been used anywhere in the world for SIM issuance purpose.

    This paragraph is as assumption or a factual statement???

    I have seen in person, biometrics being implemented for SIM activation and sales in Nawras – Oman. For more information please visit http://www.nawras.om.

  • Chodo

    Yeh (writer) telecos companies ka dalla hai

  • Zahid Warraich

    This is one die hardy lackey of some telecom lobbyist. You raped our country, and countless times, and you still have the audacity to whine? If you were operating in some other country, you would have gotten public spanking and beating by respective govt. An accomplice in a crime is a criminal himself – except in Pakistan. Cry babies, I am sure it will change soon. It has to. Take your investment, shove it up your management’s a$$es and run away if you dont like it here *&*%^*%ers.

  • Umair

    Both the Corrupted PM and his Baboons are responsible for this mess.
    Telecoms and ISP’s will go down the drain if they can’t take Revolutionary Steps to Enhance this Sector in Pakistan.3G was Launched in 2001 and we still don’t have 3G,we are still using 2G (Launched in 1992).
    Only a fraction of internet users in Pakistan have more than 1mb or 2mb of Crappy broadband internet speed.

    We are almost 25-30 Years behind in Telecommunication Sector in Pakistan.

    Everything in Pakistan has been made a PAIN Giver.

  • Fraz

    Telcos Business managers are bloody well aware that what tactics they have been using to achieve sales targets and promotions and bonuses.The telcos are not so innocent and cannot be absolved of every thing.The article is wrong when it says its being portrayed and environment is being created.These are facts that illegal SIMS are being used for criminal activities.

  • m.yasir

    I have myself experienced this hooliganism of teleco operators,15 SIMs have been issued on my ID Card without my consent and knowledge.I simply dont know for how long those SIMs have been active,I just came to know about this when someone from mobilinik customer services callled me and told me to block those SIMs that are not in my use.
    There must be some difference between running a telecom compnay and running a business to sell pets or vegetables.
    When I went to customer care centers of respective companies I asked them to show me my signature and thumb impressions on those SIMs issued on my ID Card without my consent,they were tongue tied and they rather felt ashmed upon my admonishing them.

    Pakistan is a Bana State where there is no rule of law.There must be some strict code of conduct and fool proof mechanism to issue a SIM to any person.I strongly support Biometric System.

    I think,like Daewoo Bus Service,Japanese automaker companies and scores of other companies Telecom companies are also exploiting people of Pakistan by buying top Govt officias and politicians of Pakistan.

    Engineer M.Yasir

  • m.yasir

    I think by proliferating illegally issued SIMs without any check and balance both PTA and Telecom Operator Companies in Pakistan are promoting and supporting terrorism.They are euqally resoposible for blasts controlled and operated by mobile phones and SIMs

    Engineer M.Yasir