Telecom sector: Reformed PTA moves closer to spectrum auction

Positive developments in the industry set the stage for progress next year.

KARACHI:

With the exception of a few milestones in the second half, year 2013 remained almost flat with no major development in the telecom sector. However, experts say that it set the stage for the next year.

“I am seeing 2014 with a lot of optimism, it will be better than the previous five years,” Information and Communication Technology (ICT) expert Parvez Iftikhar said. The upcoming spectrum auction for next-generation mobile services will spur economic activity, he added.

The consolidation of Warid Telecom will be another significant development in 2014, leaving only four cellular mobile operators (CMOs) in the market, said Iftikhar, who has also served as chief of the Universal Service Fund. Five mobile operators are just too many for a market like Pakistan, he remarked.



Responding to a question about the regulatory environment, the ICT expert said the new leadership of Pakistan Telecommunication Authority (PTA) has had a positive impact on the industry so far. They can do a lot if given full autonomy, he said.

The first half of the outgoing year was not very different from the previous year as no major developments took place. Things, however, changed in the second half after the change of government following May 11 general elections.

After the new government took charge at the centre, the telecom regulator too appointed new leadership. With a new chairman, member technical and member finance, PTA showed significant progress on all pending issues.

Hiring of international consultants for the spectrum auction and the rollout of biometric devices at customer support centres and franchises of mobile operators were the major developments in 2013.

A joint effort of both Cellular Mobile Operators (CMO) and PTA, the launch of biometric devices at sales channels was the first practical step towards addressing the menace of unverified SIMs. Other notable developments include campaigning and legal action taken by PTA to curb grey telephony traffic.



Telecom operators, on the other hand, achieved another milestone as the number of cellular connections sold by the industry reached almost 130 million.

Total cellular mobile subscribers reached 129.6 million at the end of September – the latest month for which data was available − up from 121.9 million in December 2012. Cellular mobile teledensity increased to 72.2% as of September, up from 68.8% at the end of 2012.

The new leadership both at the centre and the telecom regulator injected positive sentiments into the industry. However, the new government continued some of the policies of the previous one.

The video sharing website Youtube, which was banned by the government in September 2012 to block access to the anti-Islamic content on the site, remains banned. The website brings in considerable traffic and data usage. Similarly, the practice of suspending cellular services for security reasons, though less frequent, also continued.

“Changes in the regulatory policy are expected next year,” a government official said while requesting anonymity. PTA will get a big boost from the spectrum auction and push for a better mechanism to regulate the industry, he said.

It will take up all outstanding issues, such as recoveries and pending cases. However, the regulator will first work to create a positive environment, he added.

The spectrum auction will boost the economy, the official said. From app development to the launch of new services, there will be a lot of activity in the telecom sector, which will create direct and indirect jobs, the source explained. Additionally, there will be an increase in infrastructure investment.

Responding to a question, the official said the spectrum auction would be completed in the first quarter of 2014. Almost every operator is ready to launch the services, he said, as permission for the test launch has been given already.



Published in The Express Tribune, December 29^th, 2013.

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