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3G Can Trigger Pakistan's Economy by Over Rs. 1,000 Billion in 5 Years

By  | 22, Jan 2014 | 37 Comments



Pakistan Flag Lahore 3G Can Trigger Pakistans Economy by Over Rs. 1,000 Billion in 5 Years

It is a widely established fact that broadband infrastructure contributes towards economic growth of a country and notable amount of job creation.

Pakistan – without 3G – was left with PTCL’s aging copper media to cope with broadband needs of the country. WiMAX operators couldn’t fill the gap while EvDO technology isn’t smooth enough to entirely replace the fixed broadband technology.

This whole proposition resulted into mere 2.9 million broadband connections in last one decade against 125 million cellular subscriptions during the same duration.

Growth in Broadband Penetration

With upcoming 3G spectrum auction a large population will be able to transition towards broadband services through high-speed wireless data networks. This is a trend that is followed in various markets, have a look at below table:

Pakistan

Indonesia

Thailand

Philippines

India

Egypt

Nigeria

3G BB Penetration 0.0 % 11.5% 3.5% 16% 1% 0.7% 1.1%
Fixed BB Penetration 0.4% 1.1% 5.4% 1.9% 1% 2.2% 0.1%
3G Services Start Year Future Date 2006 2012 2005 2010 2006 2007

Source: ITU, Informa Telecoms, via Plum Consulting Report

Above table makes it apparent that 3G broadband penetration has exceeded fixed line broadband in almost every market, except Thailand where 3G licenses were auctioned just a year and half ago. Even in Thailand the broadband penetration on 3G is fast catching the fixed line mark.

A recent report by Plum Consulting anticipates that Pakistan is set to achieve at least 10 percent broadband penetration (or 20 million broadband connection) by 2018 if 3G is auction in 2014.

These estimates are based on low-demand forecast. While with high demand forecast, broadband penetration in Pakistan can go up to as high as 16 percent or 30 million broadband connections by 2018 if 3G is auctioned in 2014.

Positive Impact on GDP

Economic studies have proven the fact that there is a positive relationship between broadband penetration and GDP growth. This is true for both developed and developing markets.

Researches have established that impact of a ten percentage point increase in broadband penetration on GDP growth rates range from 0.1-1.5 percentage points, with higher impacts found in lower income countries like Pakistan.

If we carry a conservative estimate of 0.5% impact on GDP and assume that impact will last for 3 years then Pakistan’s current GDP will increase by Rs. 40 billion in one year after 3G auction, while another Rs. 105 billion increment after second year of 3G auction and Rs. 210 billion during the third year of 3G auction.

Estimates suggest next generation networks are expected to add Rs. 380 billion to Rs. 1,180 billion to national GDP during next few years till 2020.

Not to mention, these figures exclude the auction money that Pakistan is going to generate through 3G.

Increased Employment:

Same report, and experts’ opinion, indicate that over 900,000 new jobs will be created if 3G is auctioned right away. These jobs will span around various sectors including telecoms, services, advertising, outsourcing and others.

Increased Taxes

The increased taxes arise as a result of the general stimulus to economic activity i.e. they derive from taxes paid by all sectors of the economy, especially the data services.

Plum Consulting estimates suggest that government will be able to generate addition taxes of at least Rs. 29 billion and at most Rs. 71 billion from various sectors after 3G auction.

Socio-Economic Benefits

Broadband is an enabler. It will enhance the provision of education, health and government services in Pakistan by reducing delivery costs and improving service availability.

With access to broadband will entirely change the way we do our business, financial and private transactions. The way we interact with each other or the way we find our addresses, everything will be reshaped.

Smartphones with increased computing abilities are going to lessen the efforts and hardships we come across in our daily routines.

From the way we pay our bills to the way we register our complaints with utility companies will all go digital.

In addition, low cost and flexible access to IT resources, such as file storage, software and databases, can be accessed using Cloud based services. Assume a system with centralized database and reporting of corruption or registration of complaints from general public (similar to what PITB did with Dengue reporting Android app) will make the lives easier, simpler, efficient and more productive.

Access to broadband technology and the internet can provide specific benefits to women enabling access to education and health resources and ways of generating income within their homes.

Many of the benefits from using broadband to deliver health and education services are not reflected in GDP estimates mention above as they occur over a long timescale (e.g. the benefits of better primary and secondary education can take 10 or more years to be realised in labour force productivity) and because they are about improving aspects of quality of life which are not captured by GDP measures.

More outsourcing opportunities will surface. With higher rate of access to broadband will mean more resources available for servicing the world. More services to export and more revenue inflows, just that everything will be reshaped.

Only if we Do 3G Rightly:

All of the above benefits will be reaped if one condition is met: We do the 3G rightly.

A deeper and proper planning is what we require at this point in place. Only setting the auction price rightly, taxing the services rationally and regulating the operators finely will yield all the benefits that we have mentioned above.

Governments naturally would want to make more money with the spectrum auction, which is fine and understandable. But there’s a very thin line between getting the maximum out of auction money and going over-priced.

Unrealistic auction targets, such as $ 2 billion urged by Mr. Ishaq Dar, will get this country nothing. Neither the services nor the benefits.

Our government will have to be very accurate in terms of determining the bread limit of telecom companies to make sure they are left with enough resources to enable the consumers will services too.

Same goes for taxing on telecom sector. Government has always shown deaf ears to the taxation concerns of telecom industry, but this sector is now going to get to the next level. It is getting beyond the basic voice and communication services.

Telecom sector is going to become the back-bone of national economy and hence a proper attention and rational taxing is what it requires.

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  • Tester

    Speeds will not be much high as being anticipated…! Mark my words.

    • ahmiq

      512 Kbps and 1mbps are fair enough.

      • MJ

        Guys dont be foolish this 512Kbps is already available on 2G in Pakistan i have tested it.

        • ahmiq

          Dear MJ,

          2G Technology:

          With GPRS (General Packet Radio Service), you have a theoretical transfer speed of max. 50 Kbps (40 Kbps in practice).

          With EDGE (Enhanced Data Rates for GSM Evolution), you have a theoretical transfer speed of max. 250 Kbps (150 Kbps in practice).

          • Bilal Iqbal

            272 basically with all 8 time slots… but it is much slower.

    • Osama

      Agreed with you…. because now those countries which use 3G they transfer on 4G LTE and there are optimum chances that speed will never go down.. so just wait and watch what happen…..

  • Omair Ahmed

    I do hope they (leeches- blood sucking M..) do not include term “Only 3G (CDMA/FDD/MIMO) shall be used. HSPA+ (LTE or other than as mentioned in 3G radios) shall not be used.”.. but I am just hoping against the hope :(

    • smarty

      you’re right, but in policy directive of MOIT it is mentioned that this license will include 4G/LTE.

      • Bilal Iqbal

        It is for next generation..

  • http://www.infopakistan.pk/ Khurram ShahzAd

    1000 billion is one trillion aamir :-) so heard it first time. I guess intention was to make the numeric portion of title more healthy or bulky. Other option was $10 billion.

  • ch irfan

    jo companies (ptcl evo, wi-tribe, qubee, wateen, ) already 3g services use kar rahe hain wo 4glte ka licence hasal kare gi. agar ki visiters ke pass koi news hai tu share kare please.

  • zain

    dear all. i have strong reasons to say that even 2G is in danger

    • Farzan

      care to explain?

    • Suhayb Taher

      You are right zain.. next 2 years… We will be in stone age again.. !!! Thanks to “Pak-Cheen Dosti” & “Chinese equipment” :D !!!

  • irfan

    yan palay kowi kam seedha hy jo ye ho ga 3g mege……

  • Fenn

    With the launching of 3G or any higher technology, cyber crime wing must get fully equipped and active because we have millions of evil geniuses.

  • bluedotpk

    umm let’s see that’s why i bought PTCL share’s ;-)

    • faizy

      buying the shares at this time wasnt a good idea……
      ptcl gonna face severe competition with telcos, hence it would find hard time maintaining its broadband customer line……

  • Osama

    Pakistan – without 3G – was left with PTCL’s aging copper media to cope with broadband needs of the country. WiMAX operators couldn’t fill the gap while EvDO technology isn’t smooth enough to entirely replace the fixed broadband technology.

    Buttttt…….. NAYATEL is the BEST alternate in region because they provide what they promise…… PTCL Down down down

    • Shumaila

      Nayatel should also be launched in lahore and karachi region

  • pyari

    the only thing I’ve found interesting in whole this 3g thing is that when it’s finally launched and all-praised and worn out we can read some cheesy articles or probably write some all whining about the poor quality, what with comparing graphs and snide comments ^^

    • Nabeel

      pyari, mere bhi yehi khyalat hain. give me your number and we will discuss it fruther.

      • XYZ

        THARKEE

        • malick

          Hahahaha

  • Κ@§ђ!ƒ @ђм@đ ♐

    Well, first let it roll-out for public then we see how it will impact our country

  • Shumaila

    I hope telecos will make affordable 3G packages with really good volume, otherwise no will buy 3G services

  • Tam

    Anyhow “some thing is better than nothing”

  • Nabeel

    more networks in the country, more radiation in the atmosphere, more electric waves in the air, more chances of brain cancer

    • Shahid Saleem

      If that were the case, people would be dropping dead of brain cancer in europe (lots of 3g networks). But, they are not! So explain.

      • Nabeel

        bhai Science kahti he, main nahi. although it is not completely proven but research is going on in the field.
        3G is maximum 10 years old and cancer affects slowly i.e. like in 20-30 years. Lets wait some more years and see the increase in brain cancer and skin diseases in Europe.

        I am just curious k log 3G ko kese istemal karain ge? can you share your plans. Everyone please share their plans k 3G agr a gya to wo apne smartyphone se us ko kese use karain ge in a beter way except faster browsing.. kuch na kuch to socha ho ga interested logo’n ne?

        • Shahid Saleem

          Oh what a joke. WHAT A JOKE YOU ARE.

          Science does not “say” anything until it has proof. Until then, it is hypothesis. 3G is no different from GSM, just different frequencies. and GSM is over 20 years old now.

          Other networks (AMPS, CDMA) have been around for at least that long, maybe longer. AMPS I think almost 40 years.

          So where is your brain cancer???? Where is your skin diseases???

          And in my case, I will use it just for faster browsing on my phone when I do not have wifi access. I generally need it when I am in a store and I want to check if something I want to buy (reviews, things like that).

          • Nabeel

            Thanks for commenting/criticising, whatever. I will correct my information regarding that but by mentioning Science I said that “bhai Science kahti he, main nahi. although it is not completely proven but research is going on in the field.”.

            Anyways. I got at least one planned usage of 3G by public (faster browsing while buying things). Anyone else will share his/her views?

            • Shahid Saleem

              Regardless, there is no evidence to support your opinion.

            • Opinionated

              “faster browsing while buying things”. Yar I have had a long laungh. Well said.

    • Bilal Iqbal

      Same cell sites with advance machinery will be working.nothing more…

    • Asad

      Molvi saab, Khuda ka khoof karain.
      Ap already thousands of radiations mai saans lai rahai hain. Agar iska test karna hai tu apna radio open karo. Sari FM, AM, SW1 SW2 SW3 bands , TV bands, satellite footprints directly on earth and mobile reflected microwaves freq already hain. AND THIS 3G and 2G will be nearby already cellular bands.

  • Bilal

    a positive step for boosting the country economy and uplift in the field of science and technology….3G is giving many aspects