KARACHI: One wonders why the advent of 3G and 4G services took so long as Pakistan has seen a host of businesses either enter or expand their operations since 2014 when the government finally held the long-delayed spectrum auction.
In less than three years, the number of internet subscriptions has gone up at a rate of over 900%, according to data on the Pakistan Telecommunication Authority (PTA) website. From a little under 3.8 million subscriptions in 2013-14, the number shot past 38 million by the end of October 2016. Not surprisingly, almost all growth came on the back of mobile broadband services.
The market size for internet-based businesses just increased over nine times.
From online shopping portals and taxi-hailing apps to video streaming and downloading platforms, the digital space has since seen nothing short of a revolution.
The latest to enter the growing Pakistani market is Malaysia-based iflix, an Internet service for streaming TV shows and movies that feature on its database. It’s slated to formally announce its launch for the Pakistani market next week, but its services go live from today (Monday), with promises to feature more local content, and will be priced at Rs300 per month or Rs2,800 a year after a trial month.
Its industry competition, US-based Netflix that launched in Pakistan around the same time a year ago, is currently charging over Rs800 a month, depending on the subscription.
While Netflix may have the first-mover advantage, in a country like Pakistan, where average income is hovering around $1,560 or Rs165,000 a year, subscription rates could prove to be a vital statistic.
“Netflix is in the same category we are, but we see piracy as the main competition,” Farees Shah, the general manager for iflix Pakistan, told The Express Tribune. “People resort to piracy because it’s convenient and cost-effective. If one was to provide an alternative that is affordable and user-friendly, people would definitely use it.
But piracy, availability of torrents, cheap DVDs and Netflix aren’t the only concerns. The payments mechanism and sometimes annoyingly slow internet speeds are two other challenges iflix will face in the country. “There is a download and watch offline option for people to get around choppy internet.
“We are also working with cellular mobile operators to devise a system for people to pay through their mobile credit apart from the more traditional methods of using plastic cards. In a few weeks, the system should be in place.”
Pakistan will be iflix’s eighth destination and is part of the company’s aim to strengthen its presence in emerging markets and targeting a billion subscribers by 2020, according to Group Chief Operating Officer Azran Osman-Rani who is reported to have said this back in July 2016. The company has raised over $80 million in funding since the start.
In Pakistan, however, iflix’s targets are clear. “The total market size remains around 10 to 20 million, given that, for us, anyone with an internet connection is a potential customer,” said Shah.
“Startups don’t work in a structured way, given that we are doing something that has no history. So we can’t really base it on numbers.”
Iflix’s total subscriptions, as of June 2016, stood at around 3.5 million – an impressive number given the company started out only recently.
Shah did say that the Indonesian market – where iflix entered in June 2016 – could be somewhat used as a yardstick given it has roughly the same population size. Its GDP per capita, however, is more than twice as much as Pakistan’s.
Shah said the stress was on local content as well and iflix’s deal with Hum TV, a private television channel, should pave way for the move. “The composition of the content will change very fast. What I can tell you is that there will be hundreds of shows and hundreds of movies right now.”
Each iflix subscription would be available for five devices, but would only support simultaneous streams on two of those at any point in time.
The writer is business editor at The Express Tribune.
Published in The Express Tribune, January 9th, 2017.