3G in 2011: Cellular Operators Already Backing Off?

As the regulator and Government seem pumped up for 3G license auction (latter in 2011), it looks that cellular companies in Pakistan are now looking for ways to escape the expedition.

Reasons are apparent,

  • Cellular companies are in no mood of further investment (that too in huge size)
  • Industry has its reservations for high licensee fee. (Industry segments predict that 3G license fee would be over or around 105 million US dollars)
  • And if we talk about target audience, it seems not very potential to them. As we recently mentioned, Only 4% or so are GPRS/EDGE users; that means approximate 4 to 5 million mobile users have access to internet over their devices.

Now, the cellular companies are lobbying through media to make sure that government/PTA’s campaign for 3G gets hampered. In a story produced today in ‘The News’ has plenty of evidences of what I just said.

Here is how the news item starts:

Telecom operators in Pakistan may choose not to introduce 3G, the third generation mobile services, at least for now because of a limited subscribers’ base, high cost of investment involved and an unfavorable investment climate in the country, cellular operators said.

Just to mention here, this is not the first time cellular operators have opposed the idea of 3G in media. But the thing is that they go unnamed or via sources in the papers. None of the cellular companies have dared so far to publicly mention their reservations, probably due to their respective corporate profile.

“For the cellular industry of Pakistan, the time is not ripe to venture into the high-cost technology,” Chief Financial Officer (CFO) of a cellular company said, on the condition of anonymity. “The actual active subscribers are not more than 70 million against Pakistan Telecommunication Authority’s (PTA) claim of 100 million.”

Here comes another problem, the claim of 100 million subscriber mark, which is used as main tactical weapon for 3G transition is not approved by the industry.

The News further writes on PTA’s claim of 100 million subscriber as following:

Another top official of a cellular company rejected the PTA’s claim of over 56 percent mobile penetration in a population of 177 million. He said the actual number of active customers was far less than the figures quoted by the regulator.

“The actual subscribers’ base is not above 65 million. You can’t gauge the number of users through connections for many Pakistanis have multiple connections which they seldom use,” he added.

The official claimed that up to 40 percent users keep more than one connection, which is why the mobile penetration in Pakistan is highly inflated. People having three connections at a time are also huge in number, he said.

He further explains the ARPU levels due to multiple SIMs and how they are hindering investment coming into the country as following:

He said average revenue per user has decreased just because of many people bearing multiple connections and the same revenue is being divided amongst a larger customer base.

Current average revenue per user of the industry, he said, looks just over Rs200, however this number is actually more than Rs360. “This sends a very negative message to the investors who see a low return on their investments,” he added.

According to the official, this situation directly impacts PTA’s own efforts to attract further investment in 3G services.

“When investors see high mobile penetration and low average revenue per user, low return on investment pissed them off.”

Tech reporter with over 10 years of experience, founder of ProPakistani.PK


  • Faizan

    I agree with the telco’s decision to not take part in this auction.Not financially sound decision,as its stated only 5% of the mobile users use internet on the mobile phones.As keeping in touch is rather cheaper using sms.

    • aysha

      yes guys its true that 5% people use gprs, its because of slow speed, mostly people use ptcl evo, wateen wimax, worldcall, qubee etc because they give high speed broadband, ok just tell me one thing why people are using ptcl dsl broadband instead of gprs? because of speed if mobile operators provide 3G then definatly their users will increase, just see UAE, SINGAPORE which have small population than karachi city but they are providing 3G, if 3G has no scope in pakistan than why they launch ptcl evo/nitro and why people are buying it? SO just listen brothers these politicians are just ignorent and just looking ways to make our country as a less technological and a faild state and no doubt that currently pakistan is a faild state…

      • Ahmed

        Please define failed state and how many more countries come under this definition? So why are you suggesting 3G for a “failed state” by the way ?

      • Ch. Qamar

        your comments are absolutely true. actually mobile operators are trying to earn more from this old technology.

      • Waqar

        Aysha is absolutely right.
        I agree with u

  • Munnu

    Shuker hai.

  • Usman Butt

    Ya right many ppl are having more then 1 sim. So the launch of 3G service at present is not good idea.
    Cellular companies should introduce some handsome packges like SMS packages for GPRS/EDGE users…to enhance revenue and as well as increase mobile internet users.

    • M.ASAD

      Look guys… the point to be noticed is the excuse of people using multiple sims… it just doesn’t happen only in our COOLEST PAKISTAN but it’s also happening in those other countries… so the point ”5% people” is such a lame excuse… so, PAKISTAN’S GOVERNMENT ROCKS!!! A big hand of aplause for’em… ;-)

  • Android Game Review

    He said average revenue per user has decreased just because of many people bearing multiple connections and the same revenue is being divided amongst a larger customer base.

  • If you go back in past when only Mobilink was the only GSM co. running the operation call per minute was so costly so only may be less than 1% of population using the cell phones.

    So by bringing 3 more competitors call per min down to paisa’s.

    So why they cant invest and allow cheap service, so the % rate would go higher.

    • Faizan

      Rates go down when more people use service/feature not the other way round. :)

      • First they reduced the rates then peoples start getting in automatically!

        These co. making money after evey minute mate!

  • Rameez Kakakhel

    Tragic…

  • mahar

    3G par aitraz sirf 3 networks ko hai aur un ki 2G service ki halat yeh hai ke mulk ka sab se bara data network honay ka dawa karne wale TP ki speed hamare town main ab 2KB/s se upar nahien jati aur mobilink wo pehle apne low signal aur call drop par qabo nahien pa sake warid maine kabhi use nahien kiya aur U wale GPRS par 5-7KB/s ki speed de rahe hain lekin no EDGE.ZONG akela network hai jo EDGE pe 20-25KB/s de raha hai aur zong 3G lane ke liye bhi tayar hai kiyon

  • rafay

    Companies are to blame themselves for for GPRS penetration as they are not providing any GPRS offers i.e except for zong for 2Gb for rs:200
    e.g.
    warid zahi postpaid they are giving 2gb for rs:500
    it is expensive as compared to zong but i as a user is willing to pay but cant avail cz of a condition to opt for grps or sms bundle wtf is this… if warid removes this condition more then 30% of users will avail it.

    And on the other the quality of the grps/edge is not upto the standard sometimes it works flawlessly sometimes not service is not uniform as u move through out the city.

    • sleepless

      rqqafay, the restricton has been removed

  • ProPK

    I am sure this article is part of Telcos campaign to build public opinion against 3G
    Just few years ago few companies tried to use the same logic against the high speed internet in Pakistan as well… guess what? they failed and God willing they will fail again…

  • ahsan

    this is just plain bs . the fact that few people use edge is because its rates are just plain bs ufone offering 1.5 gb for 500 + tax you get 1mbps for around 900 these days if they introduce 3g and price it well it will be a big hit as people wont need seperate connections for there phone and home :P majority of the broadband users especially wateen/witribe/evo etc users will shift to 3g as it would be far more convenient for them

  • aysha

    yes guys its true that 5% people use gprs, its because of slow speed, mostly people use ptcl evo, wateen wimax, worldcall, qubee etc because they give high speed broadband, ok just tell me one thing why people are using ptcl dsl broadband instead of gprs? because of speed if mobile operators provide 3G then definatly their users will increase, just see UAE, SINGAPORE which have small population than karachi city but they are providing 3G, if 3G has no scope in pakistan than why they launch ptcl evo/nitro and why people are buying it? SO just listen brothers these politicians are just ignorent and just looking ways to make our country as a less technological and a faild state and no doubt that currently pakistan is a faild state…

    • Yasir Latif

      I do agree with you…. 3G service is req’d for Pakistan.

  • Sumair

    They should target 3G just for data only. I m sure it will be a huge hit. Look at PTCL, they introduced 3G (EV-DO) just for data and they succeeded. So why cant these telcos apply the same strategy. Low data using population doesent mean that 3G is not favorable. Then why countries like Kuwait and bahrain have introduced 3G even when their population is low than Pakistan?? Give us 3G for data only (UMTS, HSDPA, HSPA+).

  • Fakhrealam

    Agree with aysha and rafay.

  • Adnan Khalid

    :(

  • This post is a lie. Or a rumour.

  • bilal

    ayesha is rite.3G would result in more advencement such as use of video conversation skype etc beside giving good speed.its naturel that change is always resisted and no one wants to loose his domain but we need to proceed,need to look ahead.
    so no logic of suspension of 3G plan

  • amir

    3G NETWORK REQUIRES HUGE INVESTMENT AGAINST WHICH THEY REQUIRE RETURN AND CURRENT MARKET CONDITIONS ARE NOT SO THAT THEY WILL GET HANDSOME RETURN,ITS NOT DAT K 2 KHAMBAY LAGA DO AUR CHALO G 3G ON KRO IT HAS GOT A LOT TO DO AT BACKEND R AUR PPL CURRENTLY EVEN DUN KNW HOW TO USE INTERNET ON MOBILE HOW CAN OPERATORS TAKE THE RISK OF SO HUGE INVESTMENT AS IT WILL TAKE AT LEAST 2 MORE YEARS SO PPL GET AWARE OF THESE THINGS…

    • Yasir Latif

      @amir, Yaar you are thinking in a -ve approach. If we see others countries, they have very less number of users for 3G, but this service is availalbe in that countries. So, 3G service/operator is req’d for the Pakistan…. Positively!

  • rafay

    @Sleepless

    Thanks alot for the tip just activated mine.
    This restriction has been lifted a month back askd the csr.

  • Ahmed

    Stupid logic that only 5% Pakistanis use GPRS/EDGE so 3G shouldn’t come. why 3G is not choice of current operators is simple that they operators don’t want to invest more. If less internet usage is an excuse then we should see if we find a debate where people opposed moving from AMPS to GSM.

    No one uses so damn expensive internet on 3G in middle east (mostly UAE, Kuwait, Bahrain, Qatar) but still 3G is there and they are not even 1/10th of Pakistan in population.

  • v

    amir ppl also were nt aware to use computer and other new technology, till now most of internet users didnt knw wat r blogs? Than y mbilink nd ufone are introducing it.its Pakistan bro, every body runs behind gold,as he get he comes to knw how to save. :p

  • I’m totaly Agreed with Aeysha’s comments….

  • Rafay

    Aray yaar 3Gko filhaal side pe rakho pehle apne 2.5g ko to sahi chala lo.

    On the lighter note take the example of evo it has become a hit or not, yes it is more and more people are buying cz they need internet on the go. When u ll have 3g people will rather prefer 3G over Cdma or wimax devices.
    I think ptcl is a big hurdle in 3G then mobile operators cz they will lose their minopoly.

    Sent from iphone.

  • Ali Asghar Saifuddin

    You know what, i am sick of it, now my mind is set that we Pakistani’s will never ever see 3G, these sick operators always complain about short internet subscribers, in a country where people find it difficult to earn for meals, and they will use such an expensive internet packages, i myself using zong only for downloading without any fear of credit and with real freedom, all others useless realy, they dont deserve to complain for the minimum internet users at all, in these days of 21mbps internet bandwich, our operators giving foolish and expensive internet packages for gprs/edge with speed of max 236kbps, only zong is providing packages in rates edge should be, who the hell will use 30mb, 90mb, 5mb or 3mb bundles in these days? Believe me, those prepaid users who uses mobile internet regularly like me, will use zong, or rich people will use indigo or ufone postpaid, telenor and warid are completely out of this race, 2gb limit even for postpaid, so poor prepaid users will never hope for freedom of mobile internet. So if anyone using telenor, warid or ufone, mobilink prepaid, forget about affordable mobile internet. These operators dont deserve to complain realy.

  • Ali Asghar Saifuddin

    I said all this because its been years since gprs enabled handsets launched in the country, so if by miracle 3G launch in Pakistan, we will get Rs.300/mb rates, and then telenor will bring 3g “UNLIMITED” internet package as: telenor internet more @Rs.100/3mb. Telenor internet more se mobile hai internet!! Great Going. lolz

  • No_mercy

    Our networks should learn some lesson from our neighbor India whose telecom companies have sucessfuly launched 3g and have introduced it to the public in a very attractive manner but our dumbass networks dont have any creativity you know except ufone as their commercials contain a bit of humour…i feel so sad to see my iPhone been wasted like that…come on you damn networks get a life..the world is moving towards 4g and we are still stuck at 2.5G.

    • farrukh

      the thing is that the population on india is 5 times more then here , hence more ratio of people using 3g then here , way cant people understand this that not even 5% of the total cellular users use 3G so way companies invest 150 million $$ when they cant get sufficient profit out of it . i dont care weather 3g or not i dont even use gprs . i found it very funny way people say pakistan i a failed state just becoz of 3g is not avaliable here LOL.
      control ur emotions . And chill , JAB ANA HOGA AJAYE GA

      • No_mercy

        What do you mean by JAB ANA HOGA AJAYE GA..ahahaha..you seriously amused me by your statement..dude are we gonna get 3g when the world would be at 6G..lmao..i think it is the time when JAB ANA HOGA AJAYE GA will happen

  • Make Money

    yes offcourse i agree with you, Pakistani Young Generation need it this time, but should be cheap rate

  • zoya

    i agree with you

  • khan umer

    guys.. i think that to some extent telcos are right. there is a huge ivestment required for going to 3g, imagine yourself putting your buck in something that you feel will not pay you back and you might end up throwing away your bucks and getting nothing and ending up paying more to survive. Interent penetration in pakistan has been quite poor vs other developing nations in our region. for example PTA claims that broadband penetration is apx 800K users in total population of apx 180million. for mobile internet the claimed number by telco is only 4-5 million which is nothing compared to 10 million subs claimed by pts. secondly we should all consider the worth of a 3g enabled handset in the market. the question is that is it affordable for the masses now. all of us cannot afford iphone, black berrys, andriods etc etc. we all must look at what masses want right now. i 100% agree that telcos should focus on data packages and make them cheap as dirt so that mobile internet penetration increases and investors see our coutnry viable for 3g or 4g networks. telcos should also introduce handset deals with yearly contracts like europes and americas so that its easy for all to afford expensive handsets with 2,3 or 4g features. with increased mobile internet penetration handset manufacutres will be interested to bring affordable 3g handsets to Pakistan thus making our market more feasible for telco investors. Other factors are the availability of local internet content, gps systems, education to icrease the accpetance of internet on mobile or pc etc such efforts will make 3g more attractive for all of us offering more value for money. In the end i feel thats its a bit early to bring 3g to pakistan without having a potentinal demand in the masses however as mentioned telcos and goverment need to ensure that we have a market for it and need to work accordingly side by side so that our nation keeps prospering :)

  • I think 4% users are still many..because only telenor has edge service but thiere internet charges are too expensive,,.zong has good packages for internet but thiere speed is shamefull.so why people will waste thier time and money to use internet on mobile where there is nothing special for the users at the present time,.

  • Adal

    I think, the operators should be given chance to operate their Networks. As far as investment is concerned, the operator who ll purchase the spectrum ll definitely will hv some business plan, budget estimations n all that financial n technical predictions. Operators knows better how to invest n to get revenue. So let the Operators decide to opt for 3G. And as far as GPRS usage is concernd, I think the figure quoted 5% r very good, n there r many people who want to use but avoid due to its less speed n much charges. I believe 3G ll definitely capture the mobile internet users.

    Technology cant b stopped, it has to grow. If we look back, when there were no mobile phones… I think, 3G opposers have said that time that GSM should nt b allowed in Pakistan, n those r using GSM rite now, n the same ll use 3G too…

  • farrukh

    i think TELENOR and ZONG r the only 2 companies that can bring 3g here

    • umair

      why do u think they are the only two companies ? bakki aam bechnay aayi houi ?

  • Cancel their licenses, Give new licenses for 3G. You can’t deprive any nation from such technology in 2011.

  • Reason for only 4% GPRS Users is obviously High Rates by Mobile operators.

    WiMax and EvDo 3G Networks are already operational in country with half a million subscribers. Who pay monthly fees in 1000s.

    With rise of Smart Phones need of Affordable 3G is more than ever. World is embracing 4G and Pk companies are milking old cash cows and luring people with pity unlimited SMS like services!

  • khan

    galat bat hai 3G pakistan main ana chaheye…..abi internet sab se zayda zong pey use ho rha hai 200mein 2GB….or han baqi sab compnay ko kya pta ko jo telenor use kr rha hai wo net keo nahi chala rha keo….telenor warid sb mehnga hai….phir wo wifi wala mob lay kr usay chala layta hai….internet chalany walay to boht hein ye darama kr rahay hein sab……..

  • Adeel Khan

    Hello,

    This stuff is same life who will use Colour TV then Flatron TV then LCD TV then Plasma TV then HD TV then 3D TV but we all using it isn’t it?

    or the other way round who will use VCR then VCD then DVD then Blue-ray but we all using it? isn’t it?

    Or you can say that who will ADSL or expensive internet but astonishingly we all using it? isn’t it?

    If cellular serice companies will provide internet services on bull shit 2G network then how can a customer be happy to use the slowest available network. We can complete the same task on ADSL in about 5 minutes which the 2G network will do in about 20-30 minutes.

  • Yar pakistani operator ke customer numayndo ko to ye pata nahe keh 2.5g kia hai.mene zong 310 pe cal kia apne elaqe mei 2.5g service start karne k lye.unho ne kaha aise koi technology available nahe.hahahaha

    • No_mercy

      roflmao…dude no offence but you should have said edge instead of 2.5g coz 2.5G is a very generalized term ;D

  • umair

    Cellular companies are actually backing off due to high licence fee which is mentioned above, as in current situation of our Country where most of the organizations are going towards Cost Cutting and freeing surplus staff , no investor is interested to come here and invest.

  • TAUQEER

    HI BRO IM TOTALY AGREE with u but PAKISTAN FAILS ONLY IN TERMS OF 3G LETS HOP FOR 3g to become soon

  • TAUQEER

    yeh kanjoos network pakistan me 3g lane wale nhi yeh Pakistanion ko unlimited sms offers me uljha ke rakhen ge lets seek VODAFONE TO BE COME IN PAKISTAN

  • Roshan Ali

    Friends..Ek tarh se compnies bhe theek hain e.g pak ki hardly 65% population mobile use krti hy.us main se bhe 5 se 10% logu k pas multimedia phones hain,aur 3G k liye jo mobile require hy wo Nokia sambian,Iphone ya Blackberry hain jo k 2% logu k pas bhe nhe q k esy mobile phone 15000pkr se oper e shru hoty hain jo lena har kisi k bas ki baat nhe cz we must always remember that we r frm UDC jahan ki 50% population middleclass se bhe nechy zindgi Guzar rhi hy…So 3G enable Gedgets,Aur 3G subscription cost and tarrifs 63% out of that 65% total mobile users k bas se bahr hy…pehly 3G enable phne lo 15000 ka phr subscription or monthly packges tarriffs whick ARE to be above pkr3000/ month!! Friends ap Generaly socho nt perticularly.yahan pe comment post krny waly frnds may be aford kr skty hain 3G bt not the most of our population z that much previlaged..

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