Chairman PTA – Dr. Mohammad Yaseen – whose four year tenure is about to expire in next few months is losing the moral support of his team on account of weakening state of telecommunication sector in Pakistan.
Dr. Yaseen, who also enjoys an Australian nationality is expected to face heavy criticism over an unsuccessful tenure being a custodian of telecommunication in Pakistan.
According to reports, despite having 22 years of extensive experience of various fields in telecommunication (as the profile suggests), Dr. Yaseen silently witnessed a sharp decline in the telecommunication sector of Pakistan – worst in the last ten years.
Once far ahead of India, the cellular industry in Pakistan witnessed a bumpy ride such as average Revenue Per User (ARPU) that was nearly $ 6 per month back in 2006 has dropped down to mere $ 2 per month in 2012. Foreign Direct Investments (FDI) have dried up terribly. Telecom investments were highest during 2005 – 2008, the investment figure peaked in 2006-07 with a total amount invested in Pakistan telecommunication sector as $ US 3.97 billion having FDI up to $ US 1.84 billion.
Telecom investments fell down to $ US 495 million in 2010-11 and recorded a de-investment in the telecom sector up to $ 253.3 million as several telecom operator decided to pull out the investment due to unfavorable investment conditions in Pakistan.
The only hope of attracting FDI in Pakistan died with the inability of PTA to conduct 3G licensing in the country. Mobile Cellular Policy of 2004 had highlighted the importance of 3G services in Pakistan, as per policy guidelines, 3G licensing was to be conducted in 2006. Even after 6 years of delay, the telecom authority has remained unsuccessful in implementing the rules of the business.
An official of the PTA on the condition of anonymity told MORE that, the entire team of PTA is depressed with a lowest morale ever. No one at the authority is happy over its performance as the watch dog has lost its charm and strength.
Unlike past, PTA has failed miserably to enforce very basic rules that are mentioned in the books. Recent examples show that authority could not handle the menace of unregistered SIMs despite of heavy media campaigns and tall claims. The fact is evident from latest hearing of Supreme Court with reference to illegal usage of mobile phones SIMs in Baluchistan. Despite of clear directions from the apex court in May 2012, PTA hasn’t been able to convince the cellular operator on this sensitive issue. Supreme Court had directed PTA to implement 5 SIMs against single CNIC mechanism.
Similarly, Supreme Court had ordered last month to immediately stop the Inaami Schemes as they are un-Islamic act and promoting gambling. PTA passed on the direction to telecom companies through an interim-order which was turned down by the cellular operators as they found it more appropriate to seek a stay in their favor from Islamabad High Court.
On the issue of 3G, although, Chairman PTA participated in several conferences and seminars, visited number of international destinations on government’s expense supposedly to lure the foreign investors but all his presentations have remained unimpressive bringing no results in the end.
The seriousness of the authority is very much evident from the “Investment Opportunities” section of its website which still offers statistics of 2007 as the latest data for the investors.
Whereas, on the website PTA’s vision can be found as;
Industry analysts say, all big players including Vodafone and Orange refused to participate on account of weak performance on the part of PTA and ministry of information and technology (MoITT) with the following being the prominent issue;
- Dispute with Etisalat over the issue of US $ 800 million installment
- Cancellation of Instaphone license
- Undue favors to significant market player(s) (SMP)
- Unbalanced price war among operators
An official of the PTA revealed that “authority did not handle the 3G licensing issue professionally. The Chairman, being an Australian national, has always pushed us to follow Australian telecom model. Whereas, ground realities in Pakistan are different and require its own strategy. It is highly expected that 3G may not come into Pakistan even in 2013″.
Statistics show, when Dr. Yaseen took charge of the authority in 2008, the cellular subscriber base in Pakistan was 90.5 million with a teledensity of 60.4%. Today, the subscriber base stands at 118 million. If 5 SIMs against one CNIC formula is implemented, the subscriber base will come down to under 100 million raising question on the performance of Dr. Yaseen. It all depends upon the next hearing of the Supreme Court.
And if it does happen, what accomplishment chairman PTA will record at the end of his 4 year tenure.
It is interesting to note that Chairman runs his own blog that displays number of achievement awards that he has received due to his visionary leadership. A screen shot is mentioned below.
Few of the issues mishandled under the chairmanship of Dr. Mohammad Yaseen;
- Unable to convince foreign investor for 3G licensing in Pakistan
- Authority could not start MVNO (Mobile Virtual Network Operator) due to heavy license fee and biased attitude
- Unable to recover installment from PTCL
- Vague definition of Active SIM causing an artificial bubble of cellular subscriber base
- Unable to stop/regulate Chinese mobile phones despite of availability of type approval guidelines
- Poor Quality of service (GSM, Broadband)
Inability to control SPAM on mobile phones (SMSes) despite of existing draft. Thus, depriving industry of much needed mobile ad revenue
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Dr. Yasin’s performance was truly dismal. Foremost, I believe that he had no vision at all on to how to run the organization, it’s prime objectivity and where to take the industry in the coming years. He always looked to be hostaged by the larger multinational groups operating in the country who literally dictated their way of doing things in Pakistan. Perhaps he was caring more about his post retirement time!!!!
The industry is in doldrums. Consumers are sick n tired of services. companies are going down, Regulations are no where existent. What’s gonna happen tomorrow, nobody knows. Perhaps that says it all! and this is exactly how Pakistani telecom industry is today.
At a broader look telecom is a tiny sector, the overall situation of the country is devastating.
we need to resolve the power crisis first! Root cause of many problems.
What about the new budget? Will it have any positives for the telecom?
What do you expect? Definitely a big NO
This article, I don’t why, promotes and shows a grudge against the PTA Chairman, especially showing that it is all because of him. I’m sorry, but I think some credit to the government policies and economic condition of the country should also be given. The citizens of this country are 24hrs on a threat to be killed for no reason, price hikes and security crisis are just a few devils in this society out of many more, so my friends why would a foreign invester invest his money in this market, he would rather prefer India and Bangladesh where he is supported in every way, I am again sorry and I must say it, it’s not Chairman PTA’s fault that the sector is going down. Ask the Government, why there is more tax on telecom services as compared to other non-telecom services/products, it’s just becuase they thought it’s a high revenue market (which it is not), so lets tax them higher… PTA is just a front-line office, but guys you have to view this broadly and think out of the box.
I think either Mr. Zia Imran is a friend of Dr. Yaseen or taking out his heat on MoIT for not renewing his contract and investigating him. The article is 100% true. Mr. Zia Imran does not belong to the Telco Industry thus has almost zero knowledge of this industry. Good atricle.
the story highlights valid points. I knew people who applied for MVNO and how they ran away just because PTA asked for too much license fee. Already there is a negative growth in the sector…what else do we have to see.
Since we are on Econ 101, has anybody analyzed that all this talk of FDI, where does this FDI go? Most of the FDI claimed by Telcos to have been made is taken out of this country immediately by buying expensive switches and equipment from the likes of Nokia Siemens networks, Alcatel and Huwevi’s of the world. Little is spend erecting towers and other infrastructure that is much cheaper. Probably (it is my guess) that more than 70% of FDI makes its way back out of the country in the firs 12 months of this money showing up in Pakistan. What is too good about this transaction I fail to understand. The telcos fly in an engineer from Dubai when their switches malfunction, they haven’t invested in building this capability in this country. Let’s call a spade a spade and dig deeper to answer complex questions (and ask complex questions) instead of a superficial analysis
This is an abysmal analysis of the facts. Obviously the writer need to brush up on Econ 101. The article says, “(ARPU) that was nearly $ 6 per month back in 2006 has dropped down to mere $ 2 per month in 201″ – why is that so bad. That means more consume surplus, right? That means lower prices for the masses who were previously gouged by sarkari telephone company (the joke on 50/50 used to be that apply and your son will get the connection). The industry in Pakistan has matured and mature industry see things like lower RPU etc. Take the example of telco industry in the US, it is all about data. The voice business has matured. The data business has not taken off in Pakistan because of lack of local content and locally relevant content that can be used by 70% of non English speaking population. Telcos didn’t help themselves by asking for up to 70% of revenue of value added services while Chairman PTA has been clamoring for them to lower it (note Apple with all its might takes 30% of the cut). Having worked in MoIT I can tell you that 3G license has been derailed by lack of leadership at MoIT and not by PTA. In the past few months, the latest approach would have appointed an international consultant to advise on the transaction. guess what the news is that all sorts of pressure was exerted to appoint a particular consultant. Oh Gosh, the article says, “The Chairman, being an Australian national, has always pushed us to follow Australian telecom model. Whereas, ground realities in Pakistan are different and require its own strategy”. Wow, that is a ground reality too – the govt can appoint a competent consultant because it wants to reward certain individual and get a certain type of recommendation. BTW I have worked at MoIT and the recent news about ICTRDF and USF is not good. All technocrats are being pushed out of MoIT. Member IT is about to resign (he is already sidelined in all important matters) and now it is Chairman PTA’s turn perhaps. God save this country from incompetent people.
Zia sb, the you are right the ARPU had to come down but do you find it acceptable that within 6 years, the sector starts losing the charm and glory that was shown to investors at the time of licensing. Who is responsible for maintaining level playing field.
I heard Shazada Alam so many times talking about the level playing field and same i heard from Mr. Yaseen. Do you believe level playing field was ever established in Pakistan? If you are unable to establish a level playing field, in 8 years, how long you need. What sort of independent authority you are when you can’t safeguard the rights of smaller players.
About the local content, is it the responsibility of the watch dog to just keep speaking on public and private forums about how well it can do for the survival of the local telecom and IT industry or rather should come forward and take desired steps.
You said in you comment that “Telcos didn’t help themselves by asking for up to 70% of revenue of value added services while Chairman PTA has been clamoring for them to lower it”
So far authority hasn’t been able to convince the operator to alter the revenue sharing formula with developers. Who will enforce it then???? Does Chairman PTA needs to send an applications to all the operators???
Today after so many years, when revenues got shrunk, cellular operator have just started paying attention to data plans. Is this timing right or it should have been there years before when our stalwart at PTA claimed their supremacy over India?
PTA is an independent authority, it is the responsibility of this authority to streamline things in the sector and advocate the point of view of industry in front of high-ups.