3G Appears to be the Only Concern

confused-quotes-12Having remained a topic of discussion for a few years now, 3G continues to provide enough fodder for many in-depth debates within Pakistan’s telecommunication industry.

Briefings to the President and Prime Minister to showcase the dependence of growth within the industry, and possibly the country, with the licensing of extra bandwidth to cellular service providers have fueled the prediction workshop.

Many are wondering when and who will get us the 3G, but the key question is how.

There is no shortage of complaints against the 5 mobile service providers in the country, as is the case in the rest of the world. Quality of service has remained a bone of contention, with very little effort made by the regulatory authority or the providers to address concerns. Reprimands and fines have yielded some change, but nothing to give a 99% approval to any service provider on its customer service and network optimization.

If the expectation is that 3G would bring radical improvement to the industry, then it is a wonderful vision. But certain factors undermine this vision. With a stated 65% penetration of mobile services, quality of 2/2.5G is abysmal in many areas. Furthermore, with only an estimated 5% of subscribers being mobile data users, the GPRS/EDGE provision maintained by the providers raises questions on their actual adherence to value addition. If this is the buffet currently on offer, will higher speed of service really change the taste?

Over time, consumers have asked for access to faster data services. And with the influx of a vast array of smartphones in the market, most want to make full use of the devices on par with consumers of many other nations. But there are huge differences in the consumer segment of other nations and Pakistan.

With a larger prepaid block, average revenue per subscriber is around US$3. This does not hold much promise for service providers to invest further within their network.

One needs to understand the costs and time involved. Apart from the millions and possibly, a billion that the government dreams of making through the licensing process there will be the need for investment in infrastructure and technology.

This is further cost of hundreds of millions of dollars. On a time scale, it is unlikely that 3G can be implemented before the end of 2012 and that too in the urban centers. For such heavy investment, can any provider expect return at complementary levels?

Moreover, how long will it be able to keep the consumer happy as the world moves to 4G and LTE? Will there be another cry after a few years for upgrade?

Innovation is no doubt a key factor in the technology sector. It is what keeps the industry running on full steam and ensures attractiveness for the end-user. However, the dimensions of the Pakistani market do not resonate any other 3G-enabled nation. Could the technology be used to bring a change to the entire market?

While time will tell what eventuates in the coming months, one hopes that irrespective of 3G entering the fray or not, mobile service providers can take some time to leave the strategy tables and hammer their current network into shape for the 105 million paying consumers of today.