Turning mobile growth into broadband success: Case Turning mobile growth into broadband success: Case

Study of Pakistan

Syed Ismail Shah, PhD

Chairman, Pakistan Telecommunication AuthorityE-mail: ismail@pta.gov.pk

Evolution of Cellular Mobile Communication in Pakistan

2

3

• Total Spectrum offered was 2 lots with the following

configuration:

• Total Spectrum 2X13.6MHz

• 2X4.8MHz in 900MHz band and 2X 8.8MHz in 1800MHz

Evolution of Cellular Mobile Communication in Pakistan

• 2X4.8MHz in 900MHz band and 2X 8.8MHz in 1800MHz

band

• Existing Operators were to pay the same amount upon

expiry of license with spectrum normalization except for

Instaphone, who were only offered 2x7.38MHz in the 850

MHz band

Total Teledensity (Millions)

4

GSM Coverage

Data revenues

50.3

64.772.2

90

12.40%

13.70%

15.80%

16.40%

19.30%

10.00%

15.00%

20.00%

25.00%

30

40

50

60

70

80

90

100

Data Revenues in the Telecoms Sector

15.0

16.7

21.4

23.5

24.1

5.0

10.0

15.0

20.0

25.0

Percentage

Quarterly Shares of Data Revenue in Total Cellular Reve

42.650.3

0.00%

5.00%

0

10

20

2009-10 2010-11 2011-12 2012-13 2013-14

Rs. Billion Percentage

• Revenue from data is now more than double what it was five years ago

• For cellular mobile segment, share of data revenue has crossed 24%

-

5.0

Oct-Dec-13

Jan -Mar-14

Apr -Jun 14

Jul - Sep 14

Oct-Dec-14

LDN Network Diagram

Fiber Backbone

LDN-T has developed its backbone Network covering 78 cities.Ring, Enhanced Ring, Mesh & Spur network topologies have been used to create backbone.

Entity LDN-T

Fibre

StandardMixture of G.655 & G.652

Cable

Standard

Direct Buried & Mixture of

24F & 48F

Length 6900 Km approx.

Cities

Covered78(4 Planned)

Topology Mesh, Rings & Spurs

O&M Internal (PMCL)

PTCL Fiber Footprint & Cross Border Links

PTCL(10,400KM) covering all major cities of Pakistan

D I Khan

Karak

Bannu

Ahmedbanda

Kohat

PeshawarAbbotabad

Mardan

Nowshera

Taxila

Islamabad

Gujar KhanJhelum

KharianMandiBahauddin

Layyah

Bhakkar

Sargodha

Chiniot

Faisalabad

Khushab

Mianwali

Kasur

Wagah

Pattoki

Raiwind

Lahore

GujratSialkot

Gujranwala

Sahiwal

GojraJhang

Wateen Long Haul Optical Fiber Cable Network providing connectivity from Karachi to Torkham

� 6000 + km, Nine Rings Redundancy going to 11 Rings

� 4649 Km Expansion under USF Projects

� 24 and 96 Core Fiber (Hybrid G652D and G655C)

� 163+ Sites for Add/Drop

� 4500 + Km Metro OFC in 50+ cities

Afghanistan via Torkham

Afghanistan via Chaman

China via Khunjrab

India via Wagha

Murree

Muslim Bagh Qila Saif Ullah

Zoib

Major Metro Fiber Cities

KarachiLahoreQuetta

Islamabad

Wateen Fiber Footprint

Nooriabad

Kalri

Dadu

Larkana

Jamshoro

Shikarpur

MailsiVehariBurewala

Arifwala

PakpattanOkara

Kot Addu

Dera Murad Jamali

Sibbi

Dasht

Quetta

Jacobabad

Khanewal

Chichawatni

SahiwalT T Singh

� 4500 + Km Metro OFC in 50+ cities

KarachiThatta Hyderabad

Nawabshah

Amirabad

Sukkur

Dharki

Mastung

Dringer

Nushki

Ahmanwal

Chaghi

Dalbadin

NokundiTaftan

Mashkhel

GharoMirpur Sakro

Ghora Bari

Kati Bandar

Sujawal

ChuharJamali

Shah Bandar

Jati

Thano Bula KhanMirpur KhasUmer Kot

ChachroIslamkot

Nagar Parkar

Judho

Tando Bhago

Badin

Td.AdamBerani

Jam Nawaz Ali

Johi

Daulatpur

NawanWali Muhammad

Khanpur

Ranipur Sobhodero

Washuk

Surab

Basima

Nag

Panjgoor

Hoshab

Nal

Salimabad

Kharan

Khandkot Rahim Yar Khan

Liaquatpur

Bahawalpur

Lodhran

Rojhan

Fazilpur

D G Khan

Qureshi ChowkMuzaffargarh

Multan

Sadiqabad

Muslim Bagh Qila Saif Ullah

Lora Lai

Duki

Harnai

IslamabadFaisalabadSialkot

GujranwalaGujratSahiwalSargodhaMultanJhelum

D. I. KhanPeshawarSukkur

HyderabadAbbotabadRawalpindiBahawalpurR.Y.Khan

Multinet - 5000 KM

Broadband Subscribers Status

1,500,000

2,000,000

2,500,000

3,000,000

900,648

1,491,491

2101315

2,721,659

Broadband Technology Penetration in Pakistan before 3G/4G

-

500,000

1,000,000

45,153 168,082

413,809

12

Broadband Technology Penetration in Pakistan before 3G/4G

The era of New Generation Mobile Services (3G & 4G Mobile Broadband

Government

Auction took Place on 23rd

April 2014 NGMS Licenses 4 Mobile

13

Government issued a Policy Directive for

3G/4G auction on 7th October

2013

Consultant was contracted on 19th December

2013

April 2014 through

Simultaneous

Multiple Round Ascending (SMRA)

NGMS Licenses were awarded to

4 Mobile Operators on 22nd May 2014

4 Mobile operations

launched their 3G/4G services

during September 2014

3 Mobile operators launched 3G & 1 operator launched 3G & 4G services

The Auction generated USD 1.2 Billion for the Government

3G & 4G- Progress so far

14

Exponential growth of 3G & 4G subscribers- 12 Million subscribers ( as of March 2014)

Sudden surge in usage of Mobile Applications- Opening up a new immense opportunity in the county

Exponential Monthly Growth in 3G/4G subscribers

Subscribers in millions

15

Outstanding growth in Mobile Broadband after spectrum auction

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Extensive Data Usage on 3G Networks

6,840

6,000

7,000

8,000

Bytes (TBs) 2G 3G Total

3G shares %

2G shares %

Voice 3% 87%

Data 97% 13%

17

1,243 1,219 1,322 1,449 1,639 1,601 1,693 1,857 1,887

2,155 2,188 2,392

211 363 461 440 691

1,376

2,794

4,448

1,243 1,219 1,322 1,449 1,850 1,964

2,154 2,297 2,578

3,531

4,982

-

1,000

2,000

3,000

4,000

5,000

Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

In TeraBytes (TBs) 2G 3G Total

3G Launch

MBB comparison with other countries (December 2014)

18

3G and 4G Coverage

Projected Broadband Growth in Pakistan

40.0

50.0

60.0

70.0

Broadband Subscribers in Million

Forecast based on 3G/4G uptake Plum High Demand Forecast

Broadband subscribers to cross 50 million by 2018

20

-

10.0

20.0

30.0

40.0

2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Broadband Subscribers in Million

3G /4G Spectrum Auction

Year ending on June

Market (Revenue)

Market (Socio-Economic Development)

INTERPERSONALCOMMUNICATION

Communicate, play and share content

M-COMMERCEDoing business and make payment from mobile 3G/4G

3G and 4G – an enabler for accelerated socio-economic development through mobile broadband

CONNECTED COMMUNITIES

INTERNET OF

person

INTERNET OF THINGS

Increasing number of connected devices per

person

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Communicate, play and share content with friends from mobile

M-HEALTHMedical advice in remote areas

PERSONAL ECOSYSTEM

Access and control of connected devices remotely from mobile

payment from mobile

ENTERTAINMENTUse of mobile as a portable TV

DIGITAL MEMobile carries digital access for

payment, transport etc

3G/4GNext Generation Mobile Services

M-EDUCATIONEducation for all

M-AGRICULTURE

dependent on agriculture

M-AGRICULTUREMore than 60% of our population

live in rural areas, mainly dependent on agriculture

WOMEN EMPOWERMENT

Economic Impact of Mobile Broadband

Direct Effect

• Economic activities and new jobs directly associated with the deployment of infrastructure, and other associated

Indirect Effect

• Improvements in productivity and efficiency through faster and more optimisedprocesses in agri, education, health,

Induced Effect

• Innovations and new ideas diffuse throughout society, creating a favourableenvironment for new services and associated

economic activities

• i.e. jobs created for construction works, telecom engineers; Retail and consumer services paid for the newly generated income

education, health, SMEs and other sectors of the economy.

• e.g. Optimization ofsupply chain

new services and business models

• e.g. Advanced online services, new utility services

Short term Short to mid term Mid to long term

Additional GDP due to 3G and 4G services

The World Bank estimates show that a

10 percent increase in mobile

broadband penetration drives a 1.4

percent increase in GDP for low-to-

middle income countries.

(The World Bank and ITU)

A 10 percent point increase in

International evidence / estimatesInternational evidence / estimatesInternational evidence / estimatesInternational evidence / estimates

Additional GDP during 2014-2020

� Estimated Rs. 1,200 Billion

addition expected in GDP due to 3G and 4G services in

Source: PTA , World Bank, GSMA, Plum Report 2013

A 10 percent point increase in

broadband connections penetration

leads to 0.92% increase in GDP in

developing countries.

(GSMA)

Direct, indirect and induced economic

effects

Short-term and medium to long-run

effects

to 3G and 4G services in Pakistan during 2014-20.

GDP growth translates into Job Creation

Addition of 1,000 new broadband

connections results in the creation of 33

new jobs (Direct, Indirect and Induced

jobs in industries that make use of

broadband networks)

GSMA

The recent GSMA Report on Digital

Inclusion and Mobile Sector Taxation in

International estimatesInternational estimatesInternational estimatesInternational estimates

Additional Job Creation:

� Expected 1 to 1.5 million 1 to 1.5 million 1 to 1.5 million 1 to 1.5 million

employment generation

Source: PTA , GSMA, World Bank, Planning Commission and Plum Report 2013

Inclusion and Mobile Sector Taxation in

Pakistan shows that for every new job

created in Pakistan’s Mobile sector, 11

are generated in the wider economy

GSMA Deloitte

For every percentage point increase in

broadband penetration, employment

would increase by 0.2 to 0.3

percentage points per year.

Planning Commission and GSMA

employment generation

during 2014-2020.

Thank You!

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Thank You!