Telecom sector: Credit due for spectrum auction but more needed

Govt needs to finalise ICT policy, update regulatory framework .

KARACHI: As it enters 2015, the government certainly deserves credit for equipping the country with high-speed mobile internet. They, however, missed out on several other opportunities that could have made the year a resounding success for the Information and Communication Technology (ICT) sector.

Embracing mobile broadband was a huge achievement for the incumbent government, but delaying the national ICT policy was an equally big failure on its part. Despite challenges, the ICT sector increased its contribution to the exchequer by more than three-fourths and added millions of new telecom and broadband subscribers. On the other hand, the government could not restore access to the social video sharing website, Youtube.



To review the government’s 2014 performance in the sector and the priorities it should focus on in 2015, The Express Tribune spoke to ICT expert Parvez Iftikhar.

The analysis

The PML-N government achieved a major milestone through the April-23 auction of licences for third-generation (3G) and 4G spectrums, fulfilling the promise made in its election manifesto – the auction will bring over $1.1 billion to the national kitty after full payments are made.

The government’s efforts towards promoting the local software industry are commendable as well – most of this progress was restricted to Punjab though. The success stories coming out of Plan 9 – a technology incubator of the Punjab Information Technology Board – certainly reflects the output of the government’s efforts.

Besides conducting a successful auction, the Pakistan Telecommunication Authority revamped itself to rebuild the industry’s confidence in the regulator. However, there were many other areas where the government underperformed, if not failed.

For example, the party – in its election manifesto – expressed strong commitment to freedom of information and right to access information but Youtube remained blocked in the country. The site was banned in September 2012.

Developing an active ICT policy and a new regulatory framework is another area where the PML-N leadership underperformed. Despite setting a deadline for early December, Ministry of IT and Telecom, headed by Anusha Rahman, failed to finalise its ICT policy.

Moreover, the government hardly made any progress in programs run under the Universal Service Fund (USF) and the National ICT R&D Fund, the two independent bodies meant to promote ICT research and infrastructure development across the country.

According to industry sources, the USF has about Rs70 billion in its account while ICT R&D has about Rs8 billion – the amount can be utilised for laying ICT infrastructure in remote areas to help boast rural economy through the use of mobile technology. Private sector on the other hand continued to show steady growth. In fiscal year 2013-14, the telecom sector’s revenue increased by 6% to Rs465 billion, while it contributed Rs234.5 billion to the national exchequer, up 88% from Rs124.7 billion in FY13.

The industry, which commenced 3G services five months ago, partially covered main cities, adding 5 million connections to its 3G network till November. The growth in mobile internet helped the country more than double its broadband subscriptions to 8 million at the end of November, up from 3.7 million at the end of June, 2014.

The CMOs switched to the Biometric Verification System for registering new connections and blocked millions of inactive or illegal SIMs, bringing the overall subscribers down to 137 million at the end of November from its highest ever 140 million as of June.

Going into 2015

The National ICT policy should be the first priority in 2015, says Iftikhar. “Unless we have an ICT policy, investors won’t take interest in this market,” he said. Formed in 2004-2005, the old policy is outdated. It defines broadband as a connection of 256 kilobits per second (Kbps) – the norm in most countries is 2 Mbps.

Next, the government should sell the leftover spectrum – the 850 megahertz of defunct Instaphone and 10MHz spectrum in 4G that remained unsold in the auction. It should also think about bringing a new spectrum, even in the 2G band that is suffering from congestion.

The government should expedite programs of USF and ICT R&D and appoint a permanent head for the latter. “How can an organisation perform without a permanent head?” said Iftikhar. 

Published in The Express Tribune, January 1^st,  2015.

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