SPECIAL REPORT ISLAMABAD: Though the Pakistan Telecommunication Authority (PTA) is planning to introduce the 3G technology in the country this year, it seems a distant cry as almost all the local telecom operators may not opt for this option mainly due to a limited subscribers' base, high cost of investment involved and an unfavourable investment climate in the country.
Earlier this month, Secretary Cabinet Division, Abdur Rauf Chaudhry, at a seminar had announced that the 3G services would be available to local mobile users this year.
However, some industry observers have claimed that despite strong uptake, the mobile market in its current 2G form is still a long way from saturation point, and the high cost of acquiring a 3G licence, rolling out a network and then offering 3G-capable handsets, means 3G services are likely to be prohibitively expensive for the majority of Pakistanis. Low literacy levels are also seen to be another barrier to adoption, they opined.
The 3G is a network technology which allows for high speed wireless data services.
Presently, all the operators in the country are fighting for a share of the country's mobile market, forcing down prices and subsequently ARPUs.
The current average revenue per user of the industry, the experts 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," they said.
According to the official, this situation directly impacts PTA's own efforts to attract further investment in 3G services.
After many years of investment and growth, the telecommunication industry is facing economic challenges, price war and flat revenues. Today, most of the telecom revenue comes from voice and to a small extent from value-added services such as SMS and ring tones. Other data services such as mobile financial services, mobile web browsing, mobile social networking etc have not become popular in Pakistan and in other developing countries.
Factors which impact the adoption of such services include availability of high speed wireless networks, monthly cost, and availability of compatible handsets at affordable prices, availability of useful and interesting applications and content (preferably in local languages), literacy and awareness.
In Pakistan, the situation is not conducive as the mobile companies contend that there are very few potential customers for this new technology and most of them are concentrated in a few large urban cities.
The mobile companies just don't see enough opportunity of payback on 3G.
Salman Wassay, Head of Marketing Zong, said the operators are reluctant to spend inordinately large amounts in acquiring new technology keeping in view the high customers’ acquisition cost and the low ARPU in the market. But it is high time for operators to launch a lucrative service for the local market as well.
“I see immense potential in the businesses of cellular phone sector particularly with the introduction of mobile banking, mobile advertising, social networking and other domains,” he said.
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