Yawning need for reprioritisation
April 9th, 2012 | No Comments
The reservations of stakeholders over the planned auction of 3G spectrum are still haunting the whole process, a new debate – should the said technology come first to the country or the local contents are developed – has rocked the bottom of the whole process. Majority of the investors – local as well as international – are closely monitoring the shaky situation emerging out in Pakistan. Vodaphone and Orange Mobile have already confirmed that they are not interested to participate in the 3G licence auction. Qatar Telecom (Qtel) has also hinted the same indication. This lack of interest has given strength to the doubts about the transparency of this process. The question, is it even viable to run 3G networks in Pakistan, is haunting the policy makers, who are still roaming with no concrete and solid solutions meant to drag this investment-hungry sector out of the crisis. There are strong arguments that the government must first develop local contents as well as introduce services before the launch of the 3G technologies. Advocates of these arguments say that introduction of technologies before developing local contents would absolutely spoil the whole purpose of the technology introduction as has been witnessed in the case of internet rollout in the country before the enactment of cyber laws or contents control rules. While on the other hand, the telecom authorities advocate otherwise. In fact, 3G – high speed data service – is needed to run rich applications, streaming videos and TV services. Available data reveals that some 65 per cent of Pakistans population lives in rural areas and cant speak English. In that case the introduction of 3G would turn out to be a futile and expensive exercise. The country needs to first develop local content that can be consumed using 3G service. PTA strongly argues that demand for data is increasing and the availability of infrastructure (3G) will enhance usage of data services and improve the content development, which will make business case for a new player. It also rejects the notion that the average revenue per user (ARPU) is low in the country arguing that the 3G would further enhance ARPU in any case. At the same time, the base price for 3G licence – $210 million – is quite high which is still keeping the investors away from this whole process. The worst examples of UK and Germany are there where the base price for 3G licence was quite high that subsequently led to the reduced return of profit to cellular companies. The relevant authorities in Pakistan need to conduct case studies to assess the return of rate before coming out with any bidding process in addition to reprioritizing their initiatives by offering a conducive, transparent and investment-friendly environment.
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