Motorola announced in 2006 that Pakistan planned the world's largest WiMax roll-out. "The deployment is a milestone in the spread of WiMax, a superfast wireless technology that has a range of up to 30 miles and can deliver broadband at a theoretical maximum of 75 megabits per second. The 802.16-2004 standard, which is used in fixed WiMax networks, is being skipped in favor of a large-scale introduction of 802.16e, which was only recently agreed upon by the WiMax Forum," the 2006 announcement said.
Let's examine the state of WiMax deployments and subscriber growth around the world since the Motorola announcement more than two years ago.
The broadband wireless access (BWA) industry has grown significantly in the last few years due to increased availability of spectrum for commercial services and the desire to close the digital divide, according to Wimax.com. A major shift from the industry has been the migration towards standards-based products.
The largest wireless ISP in the world, Clearwire, has more subscribers than the next four BWA/WiMAX operators combined. The majority of its user base relies on the desktop modem from its former equipment subsidiary, NextNet, which is now part of Motorola's operations. PC Cards and VoIP services are now part of the portfolio. The operator is expected to launch its first commercial WiMAX network (using Motorola's 802.16e-2005 radios) in Portland, Oregon before the end of the year. Regulatory approval to form a joint venture with Sprint Nextel to launch a nationwide WiMAX service in the US is eagerly anticipated. A successful joint venture would catapult Clearwire into a unique position as the only fixed wireless network operator to transition into a mobile carrier.
According to Fierce Broadband Wireless, the largest mobile WiMAX deployments reported during first-quarter 2008 were from Korea Telecom with nearly 150,000 subscribers and Wateen Telecom (Pakistan) with more than 10,000 subscribers at the end of that quarter. Wateen is today the largest mobile WiMAX Motorola deployment. In June 2006, Wateen placed an order for 198,000 CPEs from Motorola. Motorola has shipped 60,000 CPEs so far. Wateen has told Fierce that they had 25,000 subscribers by the end of June 2008. The operator expects to complete the order of 198,000 CPEs by this year. It is expected that the gap between mobile "16e" deployments and "16d" will narrow once trials of 16e equipment are complete and certified equipment becomes widely available.
The liberalization of Pakistan's telecommunications industry started in 1997 and accelerated under former President Musharraf and former Prime Minister Shaukat Aziz. In 2004, the Pakistan Telecommunications Authority (PTA) introduced two types of licenses for ISPs – regional and nationwide, and also exempted them from Central Excise Duty. Over the past four years, the Pakistani telecom sector has attracted more than USD 5.6 billion in foreign investments. During 2007/08, the Pakistani telecoms sector alone received USD 1.44 billion in Foreign Direct Investment (FDI) – about 30 per cent of the country’s total FDI. The pace of investment is likely to slow down this year because of the global financial woes.
Pakistan's network operators are offering wide range of technologies like DSL, Cable, FTTH and WiMax. They have added 25,500 new broadband connections in the financial year 2007-08, which is around 150 percent increase compared to the previous financial year, Pakistan Telecommunication Authority (PTA) statistics reported.
At present Digital Subscriber Link (DSL) is the leading broadband service in the county with 65 percent of the market share. Major DSL providers in Pakistan are Micronet, LinkDotNet, CyberNet, MultiNet and PTCL.
Wateen is likely to see growing WiMax competition from operators including Wi-Tribe, Mobilink and LinkDotNet in Pakistan. Wi-Tribe is jointly owned by Qatar Telecom, ATTCO group and Clearwire. Motorola has signed a multi-year WiMAX contract with Wi-Tribe. Motorola has commenced deploying Wi-Tribe’s WiMAX network in the 3.5GHz spectrum. Commercial launch is expected during 2009. LinkDotNet, a subsidiary of ORASCOM Telecom, is working with Alcatel-Lucent for their WiMax deployment.
According to WiMax.com, Bharti TeleVentures, Reliance, SIFY, BSNL and VSNL (Tata Group) have all acquired licenses in 3.3 GHz range and are in various stages of trials. VSNL has announced Phase 1 pre-WiMAX deployment of Aperto gear in 60 locations, extending to 200 locations within the year. Although there is clearly insufficient spectrum to offer DSL-like service, several operators have indicated that there is still a huge market for 64 and 128 kb/s connections, which should alleviate the lack of spectrum.
Once the trials are over, analysts expect WiMax subscribers to grow to about 19m in India by 2012.
How is Wimax doing in the United States? Jon Fortt of Fortune Magazine recently visited Portland, Oregon, and saw a demonstration of it in a Lincoln Navigator while a "Knight Rider" episode streamed over the Internet to a screen mounted to the car's dashboard. Here's how Fortt sums up his findings:
"The good news is that WiMax appears to work pretty well (no latency or jitter as the KITT car was taking down bad guys), making it a potential competitor to telephone and cable companies' broadband offerings. The bad news is that most American cities may never get post-wired like Portland and Baltimore, the other city now boasting a full-fledged WiMax network." 
Fortt believes that WiMax, with its ability to serve up broadband on the go, certainly could spark a fresh wave of innovation. The Obama administration's broadband measures in its latest stimulus package should help give a boost to WiMax deployments in the United States.
While the potential for Wimax in the US market looks very good, I believe the really big opportunity is in the emerging markets, such as India and Pakistan, where the mobile phone has achieved greater than 50% penetration and the PC/Internet penetration remains in single digits. South Asia is witnessing some of biggest planned deployments of Wimax with a lot of consumer interest in both fixed and mobile broadband.
According to Juniper Research, South Asia will be the driving force behind the growth of Mobile WiMax, or the 802.16e standard. The Asia and Australia regions are expected to account for more than 50% of the total WiMax deployments by 2013.
Pakistan, being among the first countries in the world to roll-out a functional WiMax service, is experiencing tremendous growth in demand after Wateen Telecom’s launch of its WiMax service and roll-out plans announced by Mobilink.
India's state-owned Bharat Sanchar Nigam Limited is rolling out a Wimax network for broadband access in response to government requirement that 20 million broadband lines be in service by 2010.
Given the growing demand for the Internet access and the ubiquity of mobile phones, Wimax roll-out will likely spur the largest adoption of mobile Internet in South Asia in not too distant future.
Related Links:
Pakistan Broadband Overview
Broadband Internet Access in Pakistan
WiMax in Pakistani Cities
WiMax Launch in Pakistan
Mobile Internet
Pakistan's Broadband Stakeholders Group
Google and Intel Boost Mobile Internet
WiMax Continues to Evolve in Pakistan
Motorola to Deploy Mobilink WiMax in Pakistan
WiMax's Last Best Hope
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6 comments:
In the face of slowing investments due to global financial woes this information on wireless internet access is very encouraging. Thanks so much for sharing!
Here is the latest teledensity data from ITU:
Both Pakistan (50/100) and Bhutan (37/100) are ahead of India (29/100) in mobile. India might soon be overtaken by Afghanistan (29/100) and even Bangladesh (28/100).
Of course, the fact that Afghanistan is ahead of Bangladesh in mobile penetration should cause all sorts of palpitations in government offices in Dhaka.
Bangladesh was one of the earliest in South Asia to adopt mobile and is the most densely populated country in the world. How they were overtaken by Afghanistan, a war-torn country with difficult terrain, should cause serious re-examination of policies such as the BDT 800 SIM tax. The fact that Afghanistan’s CAGR for 2003-08 is 109%, higher than Bangladesh’s 2003-08 CAGR of 101%, suggests that the gap between the two countries is more likely to increase than decrease.
Pakistan Telecom Report by Budde.com
Over the 2002-2009 period, the number of mobile subscribers rocketed from less than 2 million to more than 94 million (58% penetration). The 2006-2007 period in particular had been remarkable for the country’s mobile operators as the total subscriber base moved from 22 million at the beginning of 2006 to 77 million at end-2007. By early 2008, the 50% penetration milestone had been reached, probably much faster than most people expected. Despite a tightening national economy, coming into 2009 the mobile market continued to expand at an annual rate in excess of 10%.
By 2009, however, Internet penetration remained low and broadband growth had also been negligible. There was some good news on this front when the year 2008 saw an upsurge in broadband subscriptions; importantly, this looked to be continuing in 2009, boosted by the spread of competition throughout the market. DSL subscriptions were dominating the broadband market, quite overshadowing the cable modem broadband services provided using HFC infrastructure.
In the meantime, early signs of wireless-based broadband Internet technologies had begun to appear and by 2008 there were a number of WiMAX networks being rolled out in the larger urban centres. For the time being, however, the number of wireless broadband subscribers remains relatively small.
The big challenge in the short term for Pakistan’s telecom market will be to manage the impact of a pronounced downturn in the national economy. The 2008/09 fiscal year saw a huge dip in FDI as foreign investment in the country suffered a significant overall reduction. In the longer term the ongoing task of regulatory reform will be the major challenge.
Key highlights
• Despite a faltering economy and speculation that the mobile market was saturating, Pakistan still managed to grow its mobile subscriber numbers in 2009, reaching 94 million subscribers (almost 60% penetration) by June 2009.
• Growth in mobile subscribers was continuing at an annual rate of about 12% in 2009, modest compared with previous years, yet still representing healthy growth in the circumstances.
• Pakistan’s mobile sector has been boosted by increased competition, with newcomers Warid Telecom and Telenor (both launched in 2005) having quickly claimed big stakes in the market. By mid-2009, their combined market share had reached just over 41%.
• Broadband Internet penetration remains low in Pakistan (around 0.2% in early 2009) but 2008/09 had witnessed a strong surge in demand for broadband services that looked set to continue.
• Growth in the country’s fixed-line market remained sluggish; fixed teledensity stood at less than 4% by end-2008 with the numbers expected to only edge up slightly in the short term.
• One positive factor in the emerging fixed market has been the success of WLL technology which was supporting around 35% of all fixed subscribers by early 2009.
Pakistan – Key telecom parameters – 2008 - 2009
Category 2008 2009 (e)
Fixed-line services:
• Total subscribers (million) 6.2 6.5
• Annual growth -7% 5%
• Fixed-line penetration (population) 3.8% 4.0%
• Fixed-line penetration (household) 23% 23%
Internet:
• Total subscribers (million) 3.7 4.0
• Annual growth 6% 8%
• Internet subscriber penetration (population) 2% 2%
Mobile services:
• Total subscribers (million) 90.0 99.0
• Annual growth 17% 10%
• Mobile penetration (population) 56% 60%
(Source: BuddeComm)
Here is a recent blog post by Babar Bhatti about mobile financial services in Pakistan:
In Pakistan, the widespread infrastructure of mobile operators provides them strong advantages to serve as an important link in the financial services value chain. As we have seen in Pakistan, banks and mobile operators have partnered up to start MFS. This generated a wave of marketing activity (see these commercials) which also extended to social networks such as Twitter and Facebook, highlighting the competition among mobile network operators.
One may ask why did it take so long for MFS to start in Pakistan? Well, unlike entrainment or information services, financial and commerce related services require coordination of multiple institutes and approval of government regulatory agencies. Security, accuracy and establishment of trust of users is also very important.
Easypaisa. An example of this is ‘easypaisa’ from Telenor Pakistan and Tameer Microfinance Bank. Interesting thing about this service is that money can be sent and received without a mobile phone. However, using a mobile phone provides convenience as confirmations are sent as sms. Any person with a valid Nadra CNIC can send money or receive money. Sending/Receiving can be done from more than 4,000 easypaisa shops all over Pakistan. The transaction is encrypted and the process has been approved by the State Bank of Pakistan. Details on how this works are available at easypaisa website and on YouTube.
Regardless of one’s opinion on the convenience and the fees, one must admit that introduction of MFS such as easypaisa changes the status quo for payments which has been around till now in Pakistan.
Telenor is not the only company with plans for mobile financial services. Ufone started premium banking service for customers of Ufone who have account with one its partner banks. This is a different approach where an application on the handset allows eligible customers to carry out financial and non-financial transactions. Mobilink, the largest cellular company by subscribers, is also gearing up for MFS. In July, Orascom announced its plans for MFS:
Mobilink and Citibank will utilize Mobilink’s extensive retail infrastructure to extend the reach of financial services to the previously un-served masses. Using Mobilink’s cutting edge technology, Mobilink users will be able to open branchless bank accounts through a simple and convenient registration process via authorized agents across the country. The service will allow users to maintain their accounts through their phones and make secure peer to peer money transfers to any Mobilink number simply via SMS.
At telecompk.net we have extensively covered the potential, opportunities and market size of MFS.
Here's a report on Wi-tribe's broadband launch in Pakistan:
Wi-tribe, a wireless internet provider backed by Qatar’s Qtel Group, has launched a wireless broadband service in Pakistan. The deployment, which uses WiMAX technology from Motorola, covers major cities of Karachi, Islamabad, Lahore, and Rawalpindi.
Sheikh Abdullah Bin Mohammed Bin Saud Al-Thani, chairman of Qtel Group, said the launch, which is Wi-tribe’s biggest project to date, marks an important stage in the company’s aim to become a top 20 telecom player by 2020.
“Following our launch in Jordan, Pakistan marks a major stepping stone towards our expansion strategy and our intention to leverage the scale and strengths of the Qtel Group in order to deliver the latest technologies to our customers,” he said.
Dr Nasser Marafih, CEO Qtel, added that broadband represents a “major pillar of growth” for the company, particularly in markets which have low broadband penetration rates, such as Jordan and Pakistan.
“Broadband penetration levels in new emerging markets are currently very low compared to markets in the region. However, consumer demand for wireless services is growing at a fast pace. So we will continue to focus on this area in the future as we see good business opportunity and significant growth potential,” he said.
While Pakistan already has about 50 ISPs, services are limited outside metropolitan areas. Access to high speed broadband and mobile broadband is also limited.
As of February 2008, Pakistan had about 100,000 broadband users, although the government has set itself a target to increase this number to 1.6 million by 2010.
Qtel entered Pakistan in April 2007 when it acquired a 75% stake in wireless telecoms operator Burraq Telecom, in a joint deal with and Saudi Arabia's A.A. Turki for Trading and Contracting.
Here's a report on fiber network deployment in Pakistan:
Ranking as the world’s 6th largest, Pakistan has a population of 165 million, an urban ratio of 32.5% and average household size of 6.8 people. This represents a huge market for FTTX (Fibre-To-The-Home/Premise/Business). Cities like Islamabad, Karachi and Lahore are having strong demand for high speed fibre broadband from the government, financial and other commercial sectors.
The huge infrastructures of fibre network in Pakistan are expanding in full swing. Mobilink, TWA, Nayatel, Multinet, Wateen Telecom, Brain Tel and PTCL are active in fibre network advancement. Mobilink is having a fibre optic backbone of 8,500 km. TWA, a submarine fibre optic cable operator, specializing in end-to-end international connectivity, also constructed backbone fibre for Mobilink for domestic connectivity. Nayatel had introduced Pakistan’s first Fibre-To-The-User (FTTU) network with advanced Next Generation Network (NGN) capability, offering data, voice and multimedia services in Islamabad. Multinet with over 4,500 km DWDM backbone is connecting fibre to 107 cities in Pakistan up to 100mbps. Wateen laid 5,500 km backbone network and Metro Rings providing Triple Play (Data, Voice, Video) services in most major cities. Brain Tel offers Quadplay (Data, Voice, Video & Surveillance) in Lahore. PTCL started an exclusive FTTC (Fibre-To-The-Curb) phone connections last year.
“It is an important transformation, you can see great progress every day. In Pakistan, fibre is replacing copper to achieve high speed for Triple Play or Quadplay. You can imagine how promising fibre broadband is. Our partnership with Aspen Optics is a good news to both our carrier and enterprise customers”, said Malik Naseer Ahmad, Managing Director of Digital Solution.
Digital Solution will start to distribute the full product range of Aspen Optics including MetroBlazer™ media converters, concentrators, distribution & CPE switches as well as Geebic SFP, GBIC, Xenpak, 10GE X2 and XFP.
“We are excited to see this great opportunity, to participate in such a big market growing so fast. In alliance with Digital Solution as our distributor, we are eager to make contribution to the industry by offering innovative products to help customers in Pakistan enjoy the best out of fibre connection”, said David Whitney, Managing Director of Aspen Optics.
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