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Introduction
The Study was conducted in 2006-07 in Pakistan Aim was to understand what led to the exponential growth in Pakistan Mobile Telecom market Used In-depth, Semi structured interviews involving all key stakeholders e.g. the Regulators, Network and Service providers, Consumers and other analysts. Gao and Rafiq (2009) The transformation of the mobile telecommunications industry in Pakistan: A developing country perspective, Telecommunications Policy 33 (2009) 309323
No. of Subscribers (000) 743 1699 2404 5023 12,771 34,506 63,160
Growth Rate (%) 142.3 128.7 41.6 108.9 154.3 170.2 80.7
Mobile Density (&) 0.52 1.16 1.61 3.29 8.30 22.21 39.94
2007
88,020
39.4
54.70
We divided the process of mobile telecommunications market transformation in Pakistan into three distinct phases based on the significant changes in national policy. 1990 1995: Start of the Journey 1996 2003: Establishing the Base 2004 2007: Exponential Growth
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PTA succeeded in establishing new culture Public policy-making became transparent Policy drafts were routinely placed on the website and reviewed by all stakeholders A consultative mechanism was introduced where experts in the fields were heavily involved in providing guidance to PTA. Several regulatory measures were taken: To intensify competition a new license was issued to Ufone. New Rules for interconnection between different networks were set Caller Party Pays (CPP) system was enforced, the consumers could now enjoy free incoming calls Activation charges and taxes were significantly reduced (e.g. AC reduced from Rs. 7000 to Rs. 500) Pre-paid billing system was encouraged.
Future Outlook
Further growth expected although slower than before Price wars between service providers Explosion of Value Added services and Data communication, already mbanking has started in the country while accessing internet via mobile devices is increasing. On the down side Average Revenue Per User may drop (ARPU). Worsening economic conditions and financial crunch may affect the industry
Lessons Learnt
Pakistani experience demonstrates that a strong and credible regulatory regime was the key to the efficient operation of the mobile market based on fair competition.
It left fewer opportunities for political interference, increased transparency and adopted consultative approach Instrumental in consumer protection; expansion of networks to rural areas, CPP regime, MNP, encouraged Pre-paid billing. Intensified competition to reduce prices Successfully lobbied to reduce taxes and eliminate activation charge
Policy should be consistent, clear and fair Administrative Culture must be changed to allow consultation, efficiency and transparency. Liberalised and pro-competition policy is beneficial (reduces price, enhances quality and efficiency, expands network and increases range of services) The case shows the benefits of adopting one technological standard in a market. The prices of mobile handsets and accessories were high in Pakistan in the first phase, partly due to the deployment of the competing standards AMPS and GSM. The roaming and interconnection between two kinds of networks remained problematic. However after gradual shift towards all GSM networks, the handset prices and air-time cost reduced 10 due to enhanced economies of scale.
Any Questions ?
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