Licensing in Pakistan

Pakistan Telecommunication Authority July 2015

Presentation outline

Pakistan : An Overview

SOURCE: Team analysis-Wikipedia

Pakistan • Pakistan has the 6th largest population in the world, making it an attractive market for global investors

• The country is expected to have more than 230 mln inhabitants by 2030 with ~2% per anum growth

• Its population is young and becoming more educated

• Urbanization trend is expected to continue, reaching a level of 43% by 2030

• It is expected that by 2050, Pakistan will be the 31st largest economy in world with nominal GDP of 675 bln USD from its current state of ~240 bln USD (43rd largest economy as of 2013)

Key Stats▪ Income /Capita US $1307▪ Literacy Rate 53%▪ Media Age 21.2▪ Geo-strategic Location▪ Population and workforce

Land Area 796,095 km2 • 36th Largest Area

Population, mil 196 (6th Largest Population)

3

History of Telecom in PakistanSe

ctor

Gro

wth

19471947

19901990

19961996

Before Independence- Indian Post & Telegraph Department

Post independence 1947-1962• Pakistan Post and telegraph department• 15200 telephone connection in 1948• All services manual• Operated under Gov of India Telegraph Act

19621962

4

First Step towards Sector Reform- 1962• Separation of Postal and Tele departments• Pakistan Telephone & Telegraph (PT&T) formed• Centralized Structure- Result Inefficient• Number of Telephone Lines- 922,000 only until

1990

Privatization and De-Regulation-1990• 1st Step- From PT&T to PTC with separate legal

identity on 5th Dec 1990.• Next 5 Years- Telephone lines increased to

2,127,344.• Improved network comprising of Earth stations,

Submarine Cables, International Gateway, Terrestrial System etc.

Telecom Re-Organization Act 1996• PTA ,FAB,PTCL,NTC• Installed lines increased to

35,19,877 in 1998

Telecom Sector – Reorganization 1996

Pakistan

5

Pakistan Telecommunication Authority

Pakistan Telecommunication Company Limited

National Telecommunication Corporation

Frequency Allocation Board

Pakistan Telecommunication Employees Trust

Pakistan Telecom AuthorityVISIONVISION

Regulate Telecom SystemRegulate Telecom System

Create Fair CompetitionCreate Fair Competition

Promote ModernizationPromote Modernization

Receive / Dispose Radio Spectrum ApplicationsReceive / Dispose Radio Spectrum Applications

Recommend Government on Policy FormulationRecommend Government on Policy Formulation

Create a fair regulatory regime

to promote investment, encourage

competition, protect consumer

Interest and ensure high

quality ICT services.FunctionsFunctions

6

Frequency Allocation Board

Spectrum MonitoringSpectrum Monitoring

Liaison with International Regulatory BodiesLiaison with International Regulatory Bodies

Resolution of Spill over and Interference IssuesResolution of Spill over and Interference Issues

Spectrum Planning Spectrum Planning

Assignment of Spectrum as Per ITU RecommendAssignment of Spectrum as Per ITU Recommend

FunctionsFunctions

7

History of Cellular Industry in Pakistan

Sect

or G

row

th 19981998

19901990

20042004

2007200720142014

1st GSM OperatorMobilink” Launched Services

• UFONE Started its Operations as 2nd GSM Operator

• 1st Spectrum Auction • Telenor & Warid begin

operations in Pakistan

• Next Generation Mobile Service (NGMS) Spectrum Auctioned.

• Mobilink, Telenor, Ufone acquired license for 3G while CMPAK acquired licenses for both 3G and 4G.

• Warid launched LTE within its existing 1800Mhz assigned band.

• CMPAK “ZONG” Acquire Paktel and start offering Cellular Services

2 Cellular (AMPS) issued to Paktel & Instaphone

19921992

SOURCE: PTA Data 8

Pre- Deregulation -2002Basic Telephone Services (PTCL,NTC)Subscribers 2.27 million

3.32.98

2.6

3.1

2.8

2.4

2.272.18

2.11.99

1.911.85

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

1996 1997 1998 1999 2000 2001

Mil

lio

n

0.0

0.5

1.0

1.5

2.0

2.5

Perc

en

tag

e

FixedLine Subscribers

Fixed Line Teledensity

Pre- Deregulation -2002Mobile (Instaphone, Paktel, Mobilink, Ufone)Subscribers 2.40 million

Key Policies for Telecom Sector

• Fixed line Policy.• Open and Technology Neutral• License Term - 20 Years• Local Loop (LL) – ILF US$ 10,000 /

region - 14 Regions• Wireless Local Loop Option

(Spectrum Auctioned)• Long Distance and International (LDI)

– ILF US$ 500,000• Deregulated incumbent operator

PTCL.• Introduced Access promotion

Contribution, Universal Service Fund Regime.

• Cellular Mobile Policy.• Technology Neutral • 2 New cellular Licenses were issued for

15 years.• Open Auction.• Promoted efficient use of Spectrum.• Fair Competition amongst mobile and

fixed line operators• Role-Out Obligations – 70% Tehsil HQs

within 4 years.• US$ 15M Performance Bond.• Existing Operators to Pay Same Amount

for Renewal.• Promoted Infrastructure sharing, National

Roaming, Mobile Number Portability.

14 Telecom Regions in Pakistan

Results of the De-Regulation Policy 2003

LL (Fixed)LL (Fixed)

84/3884/38

LDILDI

1414

WLLWLL

92/1692/16

84 Licenses38 companies

Total Telecom Revenue reached Rs 129.4 Billion

Results of the Cellular Mobile Policy 2004

• Two new technology Neutral licenses

issued .

•Resulted in fierece Competetion in the

Sector.

•Tremendous growth-

•Negiligible mobile Subscribers of 2.4

million in 2002 has grown to 131.8

million in 2015.

Present Licensing Frameworka- Fixed Line Sector- • Long Distance International (LDI)• Local Loop (LL)

• Fixed Local Loop (FLL)• Wireless Local Loop(WLL)

• Class Value Added Services (CVAS)• Data CVAS• Voice CVAS

• Telecom Infrastructure Provider(TIP)b- Cellular Sector-• Mobile Licenses • Next Generation Mobile Services(NGMS) licenses.c- Wireless (Radio Based Services) Sector-• HF/VHF/UHF Permissions• Aeronautical services• Maritime Services

Present Licensing Framework- Fixed Line Sectora- Long Distance & International (LDI)-

LDI service covers the provision of end to end communication between points that are;

• located in different Regions,• not in the same Local Calling Area, or • located more than 25 Km apart and • located in Pakistan with points that are located outside of Pakistan.

b- Fixed Local Loop(FLL)FLL service covers the access to the Public Switched Network and allows users to make and receive local, long distance and international real time voice telephone calls. FLL with spectrum assignment are Wireless Local Loop (WLL).

c- Telecom Infrastructure Provider (TIP) TIP license authorize the licensee to establish and maintain the infrastructure facilities (Earth Stations, OFC, Radio Communication links,Towers,Poles etc.)in Pakistan to lease, rent out or sell end to end links to telecom operators licensed by PTA. TIP cannot operate the infrastructure.

d- Class Value Added Services (CVAS) Provides VAS using infrastructure of LL,LDI and Cellular licenses. CVAS cannot install its own infrastructure.

Present Licensing Framework- Cellular Sector• Technology neutral Cellular licenses issued to 5 Operators.• Cellular Licensee is allowed to provide:

– Cellular/NMGS services.– Optional incidental Services .

• The License doest not authorizes the licensee to :– Interconnection to a service provider outside Pakistan– Direct access for customers through a NCP.– Fixed Services

• National and International Traffic are routed through LDI licenses.

• Issued for a initial duration of 15 years extendable as per applicable policy.

• Technology neutral Cellular licenses issued to 5 Operators.• Cellular Licensee is allowed to provide:

– Cellular/NMGS services.– Optional incidental Services .

• The License doest not authorizes the licensee to :– Interconnection to a service provider outside Pakistan– Direct access for customers through a NCP.– Fixed Services

• National and International Traffic are routed through LDI licenses.

• Issued for a initial duration of 15 years extendable as per applicable policy.

PAKISTAN TELECOM SECTOR

SPECTRUM ASSIGNMENT FOR MOBILE LICENSES FOR GSM-2G

19

Pakistan Telecom Authority

Cellular Sector Spectrum Assignments in 1800 MHz

Cellular Sector Spectrum Assignments in 2100 MHz

Telecom Indicators –Teledensity

Broadband Market Share by Technology

Cellular Subscribers growth

0

20

40

60

80

100

120

140

5.012.8

34.5

63.2

88.094.3

99.2108.9

120.2128.3

139.9 131.8

Milli

on S

ubscr

ibers

Cellular Market Share April 2015

Basic Telephony Subscribers (FLL + WLL)

3G AND 4G GROWTH (As of June 2015)

Operator 3G Subscribers 3G Covered Cities 4G Subscribers

4G Covered Cities

CMPak 3.5 Million 35 63000 7

Mobilink 3.2 Million 34 - -

Telenor 3.8 Million 71 - -

Ufone 2.5 Million 27 - -

Warid - - 80,000 7

Fiber Deployed Nation wide 3 Parallel LDI Operators in addition to

PTCL(10,400KM) covering all major cities of Pakistan

Link Direct -5000 KM

Wateen -5700 KM

Multinet - 5000 KM

Future Plans

Telecom Policy 2015

a- Policy under finalization with vision of:-• Universally available, affordable and quality telecommunication services

•Open. Competitive and Well managed markets

•Used by all

•Benefit to economy and Society

b- Guiding Principles of Policy Directive:-• Market Driven

•Appropriate Regulation

•Forward looking

•Accelerated Digitalization

•Universal Access

•Government Intervention Only When necessary

Future Plans

Telecom Policy 2015

c – Key areas of Focus:-• Open Sky Policy for Fixed , Broadcast and Mobile Satellite Service

telecommunication services

•Spectrum Refarmng, Sharing and Trading

•Wifi Offloading

•Over the Top Services

•Voice over Internet protocol (VOIP)

•Review of licensing framework in light of best international practices and

emerging ICT services.

•In-house Cabling ,Right of Way

THANKS