Why Can’t We Afford to Delay 3G/4G Auction?

Parvez IftikharThis is a Guest Post by Parvez Iftikhar, former CEO of USF (Universal Service Fund) Pakistan, a globally recognized institute as a success-story in it’s domain.

He built the organization from scratch and successfully started executing projects, worth billions of rupees, to bridge the digital divide in the country through private sector telecom service providers.

As a concerned citizen, I would like to urge all those who have anything to do with the ICT sector to do whatever they can, to push and expedite introduction of mobile broadband (3G or whatever). I say this because yet another delay (albeit short and for good reasons) has appeared.

Irrespective of the on-going, completely unnecessary, “controversy” surrounding auction of 3G in Pakistan, allotting 3G frequencies to telecom operators is extremely urgent and essential for Pakistan.

We have already been left behind by others who used to be our followers in 2G. Mobile broadband – or 3G – should have been introduced here already four years ago. The delay has made us lose huge opportunities relating to job creation, international trade, economic growth and Foreign Direct Investment (Telecom FDI 2007: US$1,824 mil and 2011: US$ 79 mil).

Not to mention letting the technology gap between the advanced countries and us widen even more, despite the fact that more than 70% of our population is below 35 – normally considered early adopters of modern technology.

According to ITU’s World Telecommunication/ICT Indicators Database, a total of 159 economies worldwide have launched 3G services commercially and the number of active mobile-broadband subscriptions has surpassed one billion. Countries from New Zealand to USA are allocating huge amounts of national resources to deploy infrastructure, like Optic Fiber Cables, to facilitate delivery of broadband to the citizens. Whereas we are taking ages even to allocate the God-given resource of frequency-spectrum which will facilitate provision of broadband.

Some skeptics ask what we will do with 3G? Mostly they are only thinking in terms of mobile phones – and not mobile broadband. Although a lot could be done with 3G smart phones too (present estimate 15 mil smart phones in Pakistan, expected to increase to 50 mil by 2016), it is 3G mobile broadband, mainly using USB dongles, complementing fixed broadband, that is of bigger value and main attraction for countries like ours. While people in developed countries usually use mobile-broadband in addition to the fixed, mobile-broadband is often the only access method available to people in developing countries.

Broadband has tremendous commercial usages but one of its main benefits lies in it’s capability as a deliverer of basic services to hundreds of millions of citizens, especially those living in the hinterlands of the country.

Education, Health, Governance, Commerce, Agriculture, Women Empowerment,… all can find their way. Greater access to broadband services has been found to help accelerate achievement of development targets like the internationally-agreed Millennium Development Goals. It is only using broadband that we can serve our exploding population (CAGR: 2.5%) at their doorsteps, not only to bring prosperity to them but also prevent mass migration to urban centers and save our bursting mega-cities from crumbling under their own weight.

Right now in Pakistan broadband is available in less than 300, small and big, towns and cities. All the present two million connections being of fixed broadband category (50% wireless). But then there is only so much fixed technologies can do.

Fortunately, thanks to the ubiquitous 2G GSM network, 3G can take broadband to every nook and corner of the country, becoming accessible to more than 90% population, with relatively small effort. I have deliberately used the word “effort” and not investment because investment will come from private sector telecom operators. Here is a sector where the government doesn’t need to bother about development budget allocations and resource constraints. Just like 2G was such an effective engine of growth for our economy, 3G too could contribute significantly. Admittedly the private sector operators would like to invest and deploy 3G mainly in large cities, but for the rest there is USF!

As for the controversy, firstly, on a per-megahertz-per-year basis, the announced base price is equal to the peak price achieved last time around. Secondly it is likely to go higher during bidding, despite worse political/economic/security situation than in 2004. And thirdly the licenses are going to be technology-neutral, therefore it is the operators who would decide whether they deploy 3G or something else (incidentally 4G – the so-called LTE Advanced — is not even there yet).

Yes, the only thing that all of us need to be vigilant about and jealously guard is the process being followed. The process must be fair and transparent. Period.

  • agreed… world is enjoying LTE now.. ahead of 4G and our culprits are still trying to fill there bags as much as they can for 3g… pitty

    • Sad to know really, do agree with you Tiku, All the companies including Mobilink, Warid & Telenor are very passionate to get the licence while the customers also are expecting the same but the way things are moving i am not sure what will happen.

    • @ Tiku, agree with you. You know everyone is waiting for this 3G and specially Warid, Telenor & Mobilink are really passionate to get this but sad it is, the way things are moving on.

  • I am glad that telecom industry of Pakistan is in hands of people like Dr. Yaseen & Mr. Parvez Iftikhar. No matter people agree with me or not but giving due worth to these people is one of the best stops by President

  • The opportunity is there…however the expectations on price are quite ridiculous. Why would a mobile operator pay $ 300 million (for a license) to enable broadband, when PTCL is providing broadband without a license fee?
    Mobile broadband on smartphones will not get more an $ 1 per month in ARPU. If there are a million users, the return is 300 months, if there are 2 million the return is 150 months. And will an operator really spend $ 500 million + based on a free speculation about number of smartphones? What about currency devaluation, endless load shedding, a stagnant economy, most expensive tax regime for cellular operators in the country. Lets be more realistic about price and be less emotional about broadband

  • It’s been too long for Pakistan to stay on EDGE, we need to move forward. Though not a lot of people who use it. In any case, our neighbouring countries all have 3G and are moving towards 4G.

    Warid seems to be one of the leading contenders for the licence. Story goes that the licence is going to be issued this summer! Imagine that, having 3G by the end of the year.

  • just because of stupid politicians it is still on delay state.

    thankyou again for highlighting it as it is must now to launch 3G/4G

  • What a nice post it is. I agree with each and every word of this post. 3G is very much need of present time. We can’t stick to Wires and Lines because it ties us always…Mobile Broadband will literally open new doors of employment and investment for the country. Just imagine, how many millions of people are now earning from Telecom 2G…same ripple effect with be generated by rolling out of 3G/LTE technology. Adoption of latest and new technologies is in favor of country because it always generate new employments and increases standard of living of people.

    I again need to mention that we had Good time in Musharraf tenure, at least he added a real value in Telecom, Banking, Higher Education, and Information Tech (Media included). Since then, things are stagnant…rather day be day our technologies are getting obsolete.

    Dumb & Duffs can never think for the people of Pakistan, but for their own pockets.

  • Sir! we live in a country that is run by selfish and incompetent people.
    Where executive positions are on sale or deals are made.

  • 3G is imerpative no doubt. But its not a choice based on a few people out of the population. The returns of making such a big investment need to be thought of before operators jump in to get the lic, which is why not ALL operators are willing to bid for 3g lic.

    And the price is definitely not ridiculous. If 2g can go for 291 million $, then 300 or 400 million$ is in my opinion a fraction of the actual cost that needs to be charged. India, Iran and Srilanka have sold 3G for over 500 million $( or close to it).

    As for FDI and job openings, yes that’s one reason 3G should be auctioned soon by the government, but do you really think that withthis govt., the money will stay with Pakistan? You have no idea how much money is being planned to be minted on 3g, and numerous under the table deals between senators and God knows who! I sincerely hope, 3G gets auctioned after this govt is changed, because yes, the country is suffering from job cuts and recession, but the country also needs the money we get from auction to be spent on people of Pakistan, not in the pockets of the government that has less than a year left of its tenure!

  • Hi,

    Do you ppl really think that Warid will go for it.I dont think so.The company is in debt and has not done anything for network upgrades.How can they get the license?????

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