Joseph Wilson, PhD presented the findings of the TRE study in Pakistan

Started with the industry outlook.

The mobile sector,

Mobilink licence was renewed last year from providing the service. The licence cost UDS 291 mn. The cost is the same for everyone. Paktel purchased by China mobile for USD 400 mn. Growth in mobile subscribers from 82.5mn to 89.5 mn. Teledensity is at 52.16. This is with the de-subscribed SIMS taken into account.

Fixed sector,

6 operators. Copper wire used for access. But Brain, Union and World call have very limited subscriber base. WLL part of fixed sector. 6 operators. Long distance International, 13 operators.

Broadband

130,281 subscriber, poor penetration due to high cost and low quality (low speeds). WiMax and Wireless Broadband services launched. FOur types of technology DSL 60%, HFC 32%, Wimax 7% FTTH 1%.

TRE survey

Overall Mobile scored the highest

Number of responses, 44 respondents in total

In comparison to the 05/06 survey, the mobile scores have risen but not so much for the fixed.

Mobile Sector in comparison to 05/06

Market entry and access to scarce resources has decreased, everything else risen.

Fixed sector,

Interconnection scored higher for the 07/08 survey.

Market Entry Mobile: 3.92, Fixed, 2.96, Broadband 3.17

Market entry scored high for mobile. Reasons: China mobile takeover, Mobilink bought remaining 11.31% shares. USD 2bn investment in the sector.

RS: How does the USD 2BN mentioned come about? Most are Aquisitions.
JW: Explainations will follow. The telecom industry has attracted investment inspite of political instability.

Rise in Mobile Teledensity. to 52.16 from 48.61.

Access to scarce resources: Mobile 3.55 Fixed, 3.09, Broadband 3.17. Scarce resources: Spectrum, numbers and right of way

No licences issued this year. 3G licences to be issued next year. Encourage operators to share towers. Mobile number portability ahas been launched. This has reduced the switching cost and increased competition. It has prevented the wastage of numbers. Amount of numbers going into the graveyard has been reduced.

HG: Is there a coost of switching and are people using it?

JW: Yes people are using it and switching and there is no individual switching cost is being charged. e.g Switching from Mobilink to Telenor does not cost anything to the consumer.

Interconnection, Mobile, 3.71, Fixed, 3.22, Broadband, 2.9

Signigicance improments from last year. This maybe due to the settlement of disputes with the new entrants in 05/06. There are no new interconnection disputes. The new entrants of 05/06 have gained significant market share. Therefore the perceptions have changed No new entrants in the last year. In the case of fixed, no new entrants in 2006. PTCL has to offer homogenous interconnection to all.

According to HHI, there is high concentration therefore market dominance cannot be exerted by one company.

HG: IS there a internet exchange?

JW: Not sure

Tariff Regulation: Mobile 3.22, Fixed, 2.71, Broadband 2.58

Federal Excise duty raised from 15% to 21%, Withholding tax of 10% on mobile and fixed of more than Rs 1000 (USD 16) was imposed, PTA reduced mobile termination raised by 28% from Rs. 1.25 to Rs. 0.90.

RS: What is the exchange rate situation?

JW: Depreciated over the last few months

In comparison to the last survey, the scores for the fixed sector are the same. There is a significant increase in fixed prices.

HG: Mobile sector, have prices dropped?

JW: Mobile rates pre paid cards, rates have gone down.

RS: Are the tariff’s regulated by PTA?

JW: IF PTCL reduced prices, permission has to sought. PTCL has introduced packages by filing the tariffs with PTA and implementing them on Monday with no time for review.

Regulation of Anti-competitive Practices, Mobile 2.79, Fixed, 2.42, Broadband 2.43

Competition commission of Pakistan was established last year. Some issues, Blackberry issue, where the blackberry was blocked. Customer has no ability to switch. This was resolved by bringing in the regulation that the indstrument can be unlocked for a few during a certain period of time, and unlocked with out fee after the period.

Perception that companies engage in anti competitve practices have come down.

USO, Mobile 3.17, Fixed, 2.76, Broadband, 2.05

Scores have improved. Money disbursement started in Oct last year. The fund was administered by a Not-For-Profit company (Universal Service Company). The company has signed contracts with Telenor; to provide services, Warid; to provide basic telephony (mobile as it is cheaper) and Mobilink to provide services.
Broadband,planned to lay out fibre optic cables in every district of the country.

Quality of Service, Mobile, 3.21, Fixed, 2.71, Broadband, 2.67
Quality of Services was monitored by PTA for the fifth time.
PTA has drafted regulation for monitoring QoS of the fixed sector.
Broadband, regulator will look into broadband Quality.

HG: Monitoring to be done by operators and reported to the regulated?
JW: Yes and the regulator monitors as well.

Mobilink was fined for poor QoS a few days ago.

Concluding remarks,

Overall perception has improved.
Market entry regulations: Unbundled licensing regime
lower tariffs in the mobile sector, not fixed.
MNP has encouraged switching between service providers
expected improvements in anti competitive practices with the establishment of competition commission of Pakistan.

RS: Most changes in the mobile sector?
JW yes

RS: So most of the policy and regulation has been in the mobile sector?
RS: MNP has improved the perceptions in the other dimensions? Price and Quality?

JW: Yes, bulk of the telecom is in the mobile sector. More regualtion. Mobile has taken the domninant seat in the telecom sector.