To study and explore the causes of insufficient infrastructure sharing/outsourcing by Telecom Operators in Pakistan, Pakistan Telecommunication Authority (PTA) organized a Discussion Forum at PTA headquarters in collaboration with an Islamabad based think tank, “ICT Forum Pakistan”.
Chairman PTA, Dr. Syed Ismail Shah, Member Compliance & Enforcement PTA Mr. Abdul Samad, Member (Finance) PTA, Mr. Tariq Sultan and CEO ICT Forum Pakistan, Mr. Parvez Iftikhar, were joined by leaders and experts of IT &Telecom including those belonging to Tower Companies.
Mr. Parvez Iftikhar CEO ICTFP introduced the Forum and highlighted the benefits of infrastructure sharing and outsourcing. He said that the pioneers of mobile telephony jealously guarded their towers to gain competitive advantage, but now Telecom Operators (telcos) are facing stiff competition while 3G/ 4G investments have increased the pressure on their profits manifold. That is how telecom tower sharing and outsourcing has become a global trend.
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During the session, speakers presented respective perspectives of telcos, tower cos, vendors, the Government (MoIT) and the Regulator (PTA). They were unanimous in stressing that telco-owned towers escalate the cost of doing business.
Tower infrastructure sharing, or outsourcing, provides a quick mechanism to address this issue. The concept has been discussed several times within and among the telcos in Pakistan. There are even trials underway.
PTA has so far issued nine “Tower Provider “ licenses, two of which were issued in the last nine months. Yet the present tenancy ratio in Pakistan is said to be only 1.3, whereas for a towerCo to succeed it should be higher than 2.5.
The experts shared their experiences to elaborate some of the major challenges faced by them, including those related to the anomalies in federal and provincial taxes, NOC fees charged by the local authorities, the different SOPs followed in different parts of the country, the laws governing leasing/selling the telecom infrastructure, the determination of PTA relating to the “non-telecom” nature of business of TowerCos, the resistance to change at some points within the telcos, and the massive amount of capital investment required by the towerCos to buy out all, or most, of the forty thousand existing towers in the country.
The experts opined that this investment could only come as Foreign Direct Investment (FDI), once the above mentioned obstacles are addressed.
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In his concluding remarks, Chairman PTA, Dr. Ismail Shah, said that to achieve cost efficiency in the operations, and offer improved services, particularly for broadband, telcos have no choice but to start outsourcing infrastructure.
While assuring all facilitation from PTA, he urged the stakeholders to make all-out efforts to overcome the challenges that were brought forward during the discussion forum. He thanked ICTFP for jointly organizing the forum and requested for a proper structured report of the session.
The solution is quite simple. All telcos should form a company jointly to manage towers. Then all telcos hand over their towers to the new company. Every telco should pay its share in operating costs of the joint company, depending on the number of towers that it handed over. Telcos may devise some other way to share the cost of operations of towers. Outsourcing will not work if some other party has to do it independently.
its a bad idea. Instead we can make the process easy. Reduce the cost of approval type and make it easy to get NOC etc.