My December 6th article Mobile phone adoption goes crazy in Pakistan has prompted a bunch of very interesting comments, some of which appear under the blog entry and some which came as emails directly to me. And, it's made me a new set of friends!
This morning, Tariq Mufti sent me an email with more details. Tariq was involved in developing telecom policy through the mid-90s, so he has more detail on some of what went on. With his permission, here's what he sent me:
In an earlier life (in Pakistan), from the mid-80’s to mid-90’s, I had been involved with policy development for private sector participation in telecommunications in Pakistan. Data communications, Public payphones and mobile services were the first selected to be opened to the private sector.
The initial estimates we had were for an ultimate mobile potential of 300,000 subscribers, after 10 years! After initial launch in 1989 with two AMPS operators, figures were moving to these targets (I think it was 80,000 by 1991) when, in 1991, mobile services were severely impacted by their forced withdrawal from the biggest city, Karachi.
In 1994 these restrictions were lifted, and a third operator, on GSM, was licensed in 1995. That led to rapid increases in subscriber counts, and figures were returning to original targets (300k by 1999); in 2000, CPP was instituted, along with massive reduction in import duties on telecom equipment, lowering of the activation fees. You see the results in the doubling of the figures in 2001. Two more operators entered in 2004/5, paying $291 million each for the privilege! And you see the results again!
Competition, decreasing costs of ownership and use, and you have exponential growth.
We must also not forget the impact that the growth of the economy has had on the telecom industry. From 1988 to the year 2000, Pakistan’s economy had gone through several traumas; the two kleptocratic governments, twice each, of the two major political parties, and the sanctions imposed on Pakistan after its nuclear tests. GDP growth, which had averaged about 6% for over 30 years, fell to less than 3% during the 90’s.
The economy has rebounded in a dramatic way as the restructuring efforts of the new team of economic managers bore fruit. Growth has averaged over 7.5% for the last three years (it was 8.4% last fiscal).
Another round of liberalization of telecom last year has led to private operators laying submarine optic fiber for international connectivity, domestic long-haul fiber for IP backbones, developing wireless local loop in rural areas, and even building fiber networks for integrated telephony/DSL/video delivery in the bigger cities.
The best is yet to come.
Regards,
Tariq Mufti
TM Advisory Services
502 Del Oro Dr
Ojai CA 93023
Tel: :(805) 646 2543
Fax: (805) 669 3292
tariqmufti@tmadvisoryservices.com
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