Recently held Mobile World Congress event in Spain provided a collective perspective on the industry’s maturity around the world, especially the Middle East and South Asian regions. Operators from various countries seemed to share a consensus over the changing trends in the industry and accepted a growing realization; data services had become the need of the moment and remained primed for growth similar to voice services several years ago.
For most operators, the influx of Smartphones has meant the need to incorporate new technologies at a rapid pace in order to sustain market share. While data service users in the region remain a relative minority compared to the overall cellular subscriber numbers, there has been rapid uptake of GPRS/EDGE and 3G usage as more consumers become Apple peeps, or Droid geeks or even part of the Berry brigade. And a large driver for this is the multi-billion dollar app development industry that has blossomed from the desktop computers of homes around the world.
Analysts have assessed cellular operators in Pakistan to be reaching a saturation point with voice and SMS usage. It is unlikely that the average minutes used by a subscriber will be show a significant positive trajectory or cause any excitement for the companies in terms of ARPU. However, the new stream of data usage revenue is continuing to be worked on as the next big thing for the local market.
Current estimates place around 4 to 5% of all cellular subscribers in Pakistan to be using GPRS/EDGE services. So, taking into account the latest figures released by the PTA that would make around 4 to 5 million subscribers having access to Mobile data. This would be inclusive of the approximately 60 thousand or so Blackberry service users, who since last year have been provided a low-fat version of the popular RIM service, while paying for the complete buffet.
A key deterrent to the large scale adoption of data services is the speed on offer; in the current age of downloads and online applications, GPRS and EDGE are the CNG of the mobile fuel world. Many Smartphone users incorporate Wi-Fi as the second source for a faster online connection, but this is limited to their homes and offices. So, while 3G remains a contested debate, cellular operators have to come up with strategic avenues to drive up revenue and become more than a one-trick pony.
One answer to this dilemma is Internet Service Providers (ISPs). A roadmap successfully implemented by many cellcos around the world is now taking shape in Pakistan, with operators seeking to offer people a uniform platform for all their communication needs. And the needs of the present day include landline, Cable TV and internet. By partnering with ISPs, cellular operators are seeking to shift the business model from purely ARPU-focused to RGU-focused. The latter, in simple words, identifies a single user as the revenue contributor for several services.
For most cellcos, the push towards this model is a simple integration with internal units. Mobilink has sister concerns of Infinity and Link DOT Net to count on, Ufone continues to court PTCL and its expansive network, and Warid and Wateen remain a couple through the tough times. That brings us to the two players who are devoid of any family ties with an ISP: Zong and Telenor.
While uncertainty exists if Zong would be interested in looking at internet as an alternative stream of business, Telenor in the recent period has begun the process to form a strategic partnership with some ISP player in the local market. Wi-Tribe appears top of the list at this stage, due to a larger presence. The Wi-Max operator has been making in-roads into a hotly contested market, but service issues have lost it much of the flavor it had once promised.
For the consumer, the continued competition in the market makes for better offerings to be made to it by the cellcos. Additionally, the value of having only one company to deal with for all purposes, especially when one needs to call a helpline, should make the choice shift from being purely about price, and something about service.
And while the country is far away from being a completely connected society, the hope that cellcos have sought an interest in the wider scope of communication than thousands of minutes and SMSs, should prove a boon for the customer in the coming years.