One year later: Warid Telecom comes back with a bang
After LTE rollout, it emerges as a strong contender for high-end market of data services.
After LTE rollout, it emerges as a strong contender for high-end market of data services. DESIGN: FAREEHA MUFTI
KARACHI:
In an apparent turnaround, Warid Telecom – Pakistan’s smallest cellular mobile operator (CMO) by subscribers that was trying to exit the market and declared ‘almost dead’ by experts as recently as January 2014 – seems to be making a striking comeback.
The Pakistani subsidiary of Abu Dhabi Group, which had been bleeding customers and money until early 2013, closed fiscal year 2014 with positive earnings before interest, taxes, depreciation and amortisation (EBITDA), a key measure of a company’s net earnings, according to sources.
The Lahore-based cellular service provider, which even refrained from participating in last year’s spectrum auction for third-generation (3G) and 4G technologies, has recently emerged as a strong contender for the high-end market of data services.
The company is running an aggressive campaign for the rollout of its Long Term Evolution (LTE) service, as a result of the recent financial injection from the parent company.
Warid has vowed to invest $500 million in its LTE rollout, more than double the amount Zong, its direct competitor in mobile broadband, paid last year to acquire a 4G licence. It has already invested $100 million in the import and deployment of LTE equipment since launch (October 2014), according to sources.
The company is going through an internal restructuring; it has recently hired dozens of experienced telecom officials, including some from the country’s top CMOs, for LTE rollout and mobile financial services.
Only three months into the launch, the company is already boosting its internet speed in the areas covered and receiving positive feedback. “My mobile internet experience has dramatically changed since the move from Edge to LTE. The internet speed is much faster, even more than the WiFi,” a subscriber from DHA Karachi said.
Though experts say Warid’s LTE service has its limitation because they did not buy additional spectrum, the company believes otherwise.
“The traffic on our network remains under continuous monitoring and that, too, on an hourly basis. There is no need for an additional spectrum at the moment,” the company’s technical chief for southern region, Ashar Siddiqui, said as he ran a speed test on his cellphone showing 19 megabits per second (MBPS) as download speed.
Siddiqui, however, said the company would consider buying additional spectrum when required. “Our speeds in the coverage areas are well over 2Mbps, the minimum limit for the LTE service set by the PTA.”
However, one might wonder what led to the turnaround of Warid and the change of decision at the group level.
Why did the company, which was desperate to exit a year ago, would invest heavily in the country.
Warid Telecom enjoys the industry’s largest post-paid user base and boosts the highest average revenue per user (ARPU). Its ARPU stands around Rs260 per month, well over the industry average (Rs199 as of June 2014) due to its loyal corporate clientele that alone boosts an ARPU of Rs1,400 per month, according to official sources.
Besides, the company promoted itself well, claiming to possess the best infrastructure. Warid’s network is on Ericsson, a leading hardware provider for telecom services based out of Sweden.
Being an urban-centric network, Warid enjoys a strong foothold in Karachi, Lahore and Islamabad, the main markets for LTE services. Based on its GSMA strength and competitive advantage, the company was able to convince the group to invest heavily in this market, which they say will develop over the next two to three years.
“The number of LTE or 4G users have crossed one hundred thousand and Warid accounts for nearly a third of it, which is above our expectations,” the official said.
Warid’s turnaround
Launched in 2005, Warid expanded its network to almost 18 million by financial year 2009. Though it built a strong foothold in the urban centres, the company failed to expand into the rural areas and as a result lost over five million users by the end of FY2013 – since people working in cities needed to connect with their families in rural areas but the company failed to provide that connection.
Declining revenues led to more problems as Singapore Telecommunication – 30% partner, offloaded its entire stake in January 2013 over administrative issues.
Though Warid sustained its user base to above 12 million, the group still wanted to exit the country. VimpelCom, Etisalat and China Mobile showed interest in Warid’s acquisition but the transaction never took place.
The next blow came when Warid distanced itself from the 2014 spectrum auction – though expected, the decision led to speculations that it would be dead post-auction.
On the contrary, Warid took everyone by surprise and jumped from its GSMA network to LTE network, after convincing the parent company about its strength that could turn it back on a track of profitability – the rest was done by a technology neutral licence, which helped enable this transition.
Published in The Express Tribune, January 23rd, 2015.
In an apparent turnaround, Warid Telecom – Pakistan’s smallest cellular mobile operator (CMO) by subscribers that was trying to exit the market and declared ‘almost dead’ by experts as recently as January 2014 – seems to be making a striking comeback.
The Pakistani subsidiary of Abu Dhabi Group, which had been bleeding customers and money until early 2013, closed fiscal year 2014 with positive earnings before interest, taxes, depreciation and amortisation (EBITDA), a key measure of a company’s net earnings, according to sources.
The Lahore-based cellular service provider, which even refrained from participating in last year’s spectrum auction for third-generation (3G) and 4G technologies, has recently emerged as a strong contender for the high-end market of data services.
The company is running an aggressive campaign for the rollout of its Long Term Evolution (LTE) service, as a result of the recent financial injection from the parent company.
Warid has vowed to invest $500 million in its LTE rollout, more than double the amount Zong, its direct competitor in mobile broadband, paid last year to acquire a 4G licence. It has already invested $100 million in the import and deployment of LTE equipment since launch (October 2014), according to sources.
The company is going through an internal restructuring; it has recently hired dozens of experienced telecom officials, including some from the country’s top CMOs, for LTE rollout and mobile financial services.
Only three months into the launch, the company is already boosting its internet speed in the areas covered and receiving positive feedback. “My mobile internet experience has dramatically changed since the move from Edge to LTE. The internet speed is much faster, even more than the WiFi,” a subscriber from DHA Karachi said.
Though experts say Warid’s LTE service has its limitation because they did not buy additional spectrum, the company believes otherwise.
“The traffic on our network remains under continuous monitoring and that, too, on an hourly basis. There is no need for an additional spectrum at the moment,” the company’s technical chief for southern region, Ashar Siddiqui, said as he ran a speed test on his cellphone showing 19 megabits per second (MBPS) as download speed.
Siddiqui, however, said the company would consider buying additional spectrum when required. “Our speeds in the coverage areas are well over 2Mbps, the minimum limit for the LTE service set by the PTA.”
However, one might wonder what led to the turnaround of Warid and the change of decision at the group level.
Why did the company, which was desperate to exit a year ago, would invest heavily in the country.
Warid Telecom enjoys the industry’s largest post-paid user base and boosts the highest average revenue per user (ARPU). Its ARPU stands around Rs260 per month, well over the industry average (Rs199 as of June 2014) due to its loyal corporate clientele that alone boosts an ARPU of Rs1,400 per month, according to official sources.
Besides, the company promoted itself well, claiming to possess the best infrastructure. Warid’s network is on Ericsson, a leading hardware provider for telecom services based out of Sweden.
Being an urban-centric network, Warid enjoys a strong foothold in Karachi, Lahore and Islamabad, the main markets for LTE services. Based on its GSMA strength and competitive advantage, the company was able to convince the group to invest heavily in this market, which they say will develop over the next two to three years.
“The number of LTE or 4G users have crossed one hundred thousand and Warid accounts for nearly a third of it, which is above our expectations,” the official said.
Warid’s turnaround
Launched in 2005, Warid expanded its network to almost 18 million by financial year 2009. Though it built a strong foothold in the urban centres, the company failed to expand into the rural areas and as a result lost over five million users by the end of FY2013 – since people working in cities needed to connect with their families in rural areas but the company failed to provide that connection.
Declining revenues led to more problems as Singapore Telecommunication – 30% partner, offloaded its entire stake in January 2013 over administrative issues.
Though Warid sustained its user base to above 12 million, the group still wanted to exit the country. VimpelCom, Etisalat and China Mobile showed interest in Warid’s acquisition but the transaction never took place.
The next blow came when Warid distanced itself from the 2014 spectrum auction – though expected, the decision led to speculations that it would be dead post-auction.
On the contrary, Warid took everyone by surprise and jumped from its GSMA network to LTE network, after convincing the parent company about its strength that could turn it back on a track of profitability – the rest was done by a technology neutral licence, which helped enable this transition.
Published in The Express Tribune, January 23rd, 2015.