Daily Times

The role of a telecom regulator in any country is that of an enabler, which ensures quality of service while serving users’ interests by ensuring a competitive environment for the operators to grow their operations through fair regulations. These in turn act as a catalyst to boost and positively synergise the industry. A slight imbalance by the regulator in this regard can become a recipe for disaster leading towards a total collapse, the signs of which are already beginning to appear, particularly in our mobile phone industry.

While the world is moving towards Fourth Generation Mobile Communications (4G), the regulator’s tilt is towards 3G solutions, some of them already in place in the market with limited demand as future bandwidth-hungry applications have already rendered the 3G solutions obsolete. A proof of this is the current broadband market in Pakistan that has shown slow progress owing to its hanging on to the dying trends. Resultantly, the broadband ARPU (average revenue per user) in Pakistan is quite low as compared to the regional ARPUs because of the delays in migrating to new platforms. Logically, if an operator has to invest billions of dollars for 3G at this stage when the technology is on its dying path (fading out based on a 15-year technology life cycle; 3G was launched in 2001), why not go for 4G instead, which makes technological and business sense.

This mindset has finally resulted in decrease of direct foreign investment, revenue losses and falling cellular average ARPU. What is being witnessed is a crumbling cellular industry trying desperately to hang on by pumping in more money towards marketing and sales campaigns instead of investing the resources towards modernising the technological infrastructure, which needs a major change to keep up with the emerging international technological trends. The discriminatory tax regime, infrastructure damage because of the security situation in the country, non-provisioning of industrial power tariffs, rising fuel and power prices have just added fuel to the fire.

In addition to the above, a sound Spectrum Policy is a must to give breathing space to the cellular industry for frequencies are a limited resource that needs to be utilised efficiently. However, there exists no clear roadmap/policy on spectrum allocation. The operators require a well-defined roadmap in order to effectively plan for Long Term Evolution (LTE) of a 4G wireless broadband technology, which requires sufficient spectrum allocations. What in essence is required is a clean, sufficient spectrum on a nationwide basis with no restrictive regulations such as location-based limitations. 4G requires at least 20 MHz of spectrum to have a viable business case, thus requiring the regulatory authority to guarantee its availability/resource.

Talking about future technologies in Pakistan such as 4G/LTE and their successful implementation/roll out by operators, there exist a number of issues in terms of network roll outs. The delays and financial overheads relating to getting cell site approvals from different authorities will severely impact the roll out obligations, which will end up in the form of financial penalties by the regulator on the operators for not fulfilling the roll out obligations in the prescribed time frame.

It is also interesting to note that the prerequisite for broadening the next generation broadband setups is the availability of the allied applications, which in the case of Pakistan are very limited or almost non-existent. User applications are a driving force that push the operators to move towards adopting new technologies. Deployment of infrastructure cannot make business sense if not aided by application and content provisioning, for which not much has been done.

These issues are just a few of the major obstacles being faced by operators despite the fact that it is the largest sector attracting direct foreign investment in the country and is a major contributor towards creating new job opportunities for thousands of individuals and allied businesses associated with it. What the regulator needs to understand and foresee is the danger of eminent fallout, which can swallow this industry in an economic environment that is exponentially going down with every passing day with almost no hope in sight.

The writer is a social activist. He can be reached at drirfanzafar@gmail.com