It & Telecom Industry

• Telecommunication can be defined as “Communicating information, including data, text, pictures, voice and video over a long distance.” • Pakistan is an ideal country to play a vital role in providing goods and services to the world community because of its location. • Arguably, no area is as promising in its potential as IT & Telecom Industry.

• Information is a key to success and future growth. • Access to right information gives decisive competitive advantage. • The IT & Telecom Industry is revolutionizing the way, in which we live and work. It is changing all aspects of our life and life style. • Computers and Communications are becoming integral parts of our lives.

After Separation of India-Pakistan • No base of information technology at the time of independence. • Office work was carried out by manually type writers. • At that time fastest communication link was telephone and telex. • In 1957, Ali group, set up a company called “packages limited”.

Era of 1960’s • 1960’s was an era of main frame computers. • In 1964, water & power development authority (WAPDA) established its computer center in WAPDA house by installing IBM-360 mainframe computer. • At that time, IBM was the biggest computer manufacturing company in Pakistan.

Era of 1970’s • ICL ( international computers limited) also started selling main frame computers in Lahore, Islamabad & Karachi. • NCR (national cash register) was the third biggest IT company in Pakistan. • In 1977,the first private software company “systems private limited” was formed by “packages limited” in Lahore.

Era of 80’s & 90’s • In 1985, the custom duties on electronic goods were reduced. • In 1991-92, heavy custom duties on computers were completely removed. • 1n 1995, internet service providers started providing internet facility to internet users & there were 40 ISPs in all over the country.

Era of 2000 • IT introduced in school and colleges. • Cyber cafe were opened to create awareness in peoples. • In rural areas, telecommunication facilities were provided through small PCOs and exchanges. • Educational institutes.

• There are more than 300 software houses based in Pakistan which are busy in developing and exporting software to the developed world. • The cost of Internet was reduced which has led to improvement in quality of service for the Internet users. • Free Internet connections are being extended to public sector Universities under an agreement with the private sector ISPs and PTCL.

• License applications in the deregulated sector by the PTA has been reduced to 7 days from several months. • In order to deliver efficient IT infrastructure, PTCL would now provide Internet connectivity to the ISPs within 4 to 8 weeks. Previously this connectivity used to take 4 to 12 months. • The size of Pakistan IT industry is estimated at US $ 1.5 billion per year with average growth of 35% per year.

Cities connected on Internet

Public Call Offices

Mobile Phone Subscribers

Mobile Phones vs. Landlines

• Government should maximize the opportunities to private sector. • Develop extensive pool of IT trained professionals to meet local and export requirements. • Encourage local and foreign investors to ensure development of IT sector of Pakistan. • Setup national databases that are reliable, secure, up to-date and easily accessible.

• Promote extensive use of IT applications in trade, industry, homes, agriculture, education, health, and other sectors with widespread use of Internet. • Encourage and promote the development of quality software that can capture export markets. • Develop a tradition of electronic commerce for both national and international transactions.

• The Deregulation process started in early 90s. • The process strengthened with the promulgation of the Pakistan Telecommunication (Re-Organization) Act 1996, under which Pakistan Telecommunication Authority (PTA) was established to regulate the telecommunication sector. • Telecommunication services such as cellular mobile telephony, Internet, Data Communication, Trunked Radio service, Radio Paging and value added services are already deregulated.

• In 2nd phase to open the sector with full competition by Jan 2003, a De-Regulation policy was framed and approved by the Government.

The salient features of De-regulation policy • Opening of licenses for long distance local fixed telephony. • Opening of local and long distance telephony. • Transparent procedure for award of licenses. • Low fee structure. • Incentives for investors.

The Government has adopted a two-tiered approach for IT industry development: (a) Domestic Initiative A developed local software industry will not only meet Pakistan’s own needs, but will also serve as a training ground for capturing export markets.

(b) Export Initiative Rising costs in developed countries have significantly increased software development outsourcing. This has enabled other countries, especially those in Asia (such as India and China), to tap-offshore software development business. So far, Pakistan has not been able to secure any significant share of the global software market.

• Pakistan Telecom Sector has received Rs.550 billion investment and another Rs.300 billion have been pledged to be added in the next two to three years. • The arrival of world's biggest phone company China Mobile in Pakistan in recent days has further established the worth of country's telecom sector as an ideal place for investment for big players who are now converging on Pakistan to participate in the phenomenal growth being recorded on a constant basis.

Minister for Information Technology Awais Ahmad Khan Leghari marking the signing of separate contracts by Telenor Pakistan with Nokia and Siemens for the extension of ongoing frame agreements involving deployment of radio network equipment, core network elements and other services until 2009. The agreements with a potential to result in $750 million worth of orders from Telenor Pakistan are some of the largest of their kind in the industry.

• The information technology industry in Pakistan is witnessing a transformation of unbelievable magnitude, driven primarily by the country's excellent economic growth. • For a revolution that captured the world in the new millennium, the adoption of information technology in Pakistan started slow, but has propelled since the domestic companies have increased and started contributing to the global supply chain either as suppliers or contractors or customers.

Several factors and changes that the Pakistan economy has been through in the past decade: • • • • •

The telecom revolution Introduction of regulatory compliances Fierce competition by international giants IT commoditization Development of new products, technologies and services

• There is a greater demand for automated solutions in the country today, especially in the services sector like banks and telecommunications companies. • Add to this an impressive countrywide awareness about and demand for quality customer services. This is further strengthened by compliance requirements championed by regulators.

• Unrivalled demand is being witnessed in the manufacturing sector, driven largely by an urgent need to optimize supply chain and the necessity to adopt best practices in an increasingly competitive environment. • Technology has gained recognition as an enabler for growing profitable businesses and its progression can be directly linked to the need to facilitate talent development and increase the population of skilled IT professionals in the country.

• There is a greater demand for automated solutions in the country today, especially in the services sector like banks and telecommunications companies due to a burgeoning middle class community and a rural population with enhanced buying power. • Tele-density was growing at a rate of 35 per cent annually. • Tele-density has increased from 4.5 percent of the population two years ago to about 40 percent at present.

• The number of subscribers of fixed and mobile telephony has increased from 8 million in 2003 to over 50 million in 2006 and the market has the potential to reach 80 million mobile in 2 to 3 years. • The country has a large percentage of under-25 population that desires newer handsets and value-added services.

• The telecom sector has become a major employer of skilled jobs as its exponential growth has resulted in creation of 80,000 jobs directly and 600,000 jobs indirectly. • The major beneficiaries of the telecom sector's success story as 70 per cent of the country's population has access to improved Telecom services at substantially reduced tariffs. • Telecom sector constitutes 5% of the GDP and approximately 6% of the total taxes collected by the Central Board of Revenue.

• The current revenue of Telecom Industry is Rs.200 million and it is expected to increase at a rate of 20% per annum. • The government receipts from the Telecom sector in the shape of taxes, dividends and indirect revenues amount to Rs.80 billion per year. • Last year, mobile operators invested US$2 billion in Pakistan, 54% of the total foreign direct investment in the country.

A Malaysian telecommunication giant, Telekom Malaysia to invest in Pakistan • The company plans to spend a total of $100 million on a massive project to connect 107 cities in Pakistan with 4,100 km of nationwide optic fibre cable with a planned rollout over three phases. • The investment will be made through TM's Pakistani subsidiary, broadband operator Multinet Pvt. Ltd, whose mission is to improve the state of the country's communications solutions by leveraging TM's global network assets.

• Multinet will then be able to fulfill the needs of Pakistan's high-growth telecommunication sector, offering services to mobile phone operators, long-distance international operators and internet service providers. • Multinet is currently providing broadband internet access via wire and wireless media in 12 cities, including Karachi, Lahore, Islamabad, Rawalpindi, Lahore, Faisalabad, Gujrat, Multan, Sargodha, Sahiwal, Sialkot and Shaikhupura.

• Telenor has signed deals worth $750 Million with Nokia and Siemens. • Pakistan’s telecom sector had received about Rs.550 billion investment so far while Rs.300 billion is likely to be added to the sector in the coming two to three years.

Foreign Direct Investment in Telecom Sector (US $ million)

Telecom share in GDP

Market Share of Mobile Companies As of September 2006

• Power Generation Plants • Telecom Equipment Producers • Wires & Cables Industry • Glass & Copper Industries • Rubber Industry

• Transportation Industry • Silicon Industry • Telemarketing • 1,50,000 mobile phone shops across Pakistan. – Including high end franchise show rooms & small kiosks in markets and shopping malls. • Almost every modern age industry rely on IT & Telecom.

• Misuse of Technology. • High fees of IT Institutions. • Lack of co-ordination among industries and academia. • Poor communication and networking with non-resident Pakistanis.

• Service Problem • Vague Marketing • Miscommunication in Sales • Hidden Charges • Lack of Customer Services

• Lack of progress in Institution Building. • Lack of long term business approach. • Continued political instability in the country. • Continued low literacy levels and degradation of education standards. • Increased use of imported software.

• Development of packaged software. • Quality training and development. • Re-engineering and computerization. • Switch over to Urdu as a computer language. • World-wide growth of distance learning and education. • Establishment of Data Clearing House.

Key features of Data Clearing House • Data Clearing Services – – – –

TAP File Processing TAP File Conversion Fraud Detection & Control Management Reports

• Data Transfer Services • Online Services • Roaming Agreement

• Mobile Number Portability (MNP) is the ability of a mobile subscriber to retain his/her subscriber number when changing network operators within a country. • MNP is not to be regarded as a subscriber service, which a subscriber can subscribe to. It is a network feature that allows the subscriber to keep a unique mobile phone number. • MNP is one of the important mechanisms to enhance fair competition among different cellular mobile operators and to improve customer service quality.

Significant Benefits of MNP • It eliminates the cost of informing other parties of the number change by the porting user. • It eliminates the need to consult the directory enquiries and /or change entries in their address books or computer systems by the callers. • It increases competition, with significant benefits for all users, by lowering the cost to users of switching cellular mobile operator.

Significant Benefits of MNP • It is pertinent to mention that before changing from one cellular mobile operator to other cellular mobile operator, customer must be satisfied that the service and the terms and conditions offered by the new operator are acceptable, because it is only the number that is being ported rather than the service associated with the number.

• Globally, the telecom sector has been one of the most promising sectors. Companies have been sinking in huge sums of money to develop cutting-edge technology that would deliver everything from Internet over mobile phones to telephone services over cable TV.

• Telecom services gives a sense of pride and confidence to the people as it provides instant connectivity across the country and the world.

• The future will belong to companies who adapt themselves quickly to changes in technologies.

• Operators will have to look at value-added services to improve revenue streams.

• Customers will be benefited substantially with increase in competition.