Should Pakistan Leapfrog (the Developed World) in Broadband Penetration?

1
Should Pakistan Leapfrog (the Developed World) in
Broadband Penetration?

• Vision of the Government

Noor-ud Din Baqai Member (Telecom) MoITT
2
Broadband for National Economic Development

• Broadband can help accelerate socio-economic
  development by efficient and cost effective
  access to information
• Broadband is an accelerator of economic
  development because
• easy and cost effective access provides direct
  and indirect benefits ranging from
• increased productivity
• Creativity in job performance
• more knowledge economy jobs
• bundling of new services, higher efficiency gains
• computer and network-related equipment uptake
• Enhancement in skill base
• e-business takeoffs, and
• Other ICT related services

3
Policy Overview

• Fixed, Cellular Mobile policies delivered
  objectives of rate reduction, coverage and
  affordability
• Broadband Policy 2004 defines Broadband as
• Always on internet connection with a minimum
  download speed of 128 kbps connectivity (now
  redefined in framework)
• All telecom policies are neutral to choice of
  technologies
• Penetration target set as per policy
• 200,000 subscribers by 2007 (and 1 by 2010)
• Policy Vis-à-Vis Implementation
• After 3 years we are only at half way mark of the
  expected goal
• Total subscribers approx 135,000
• At best 20,000 are wireless subscribers
• Overall penetration
• Karachi is 0.319
• Lahore is 0.48
• Islamabad 0.6
• The situation in rest of country is more poor.
  Smaller cities are showing 0 penetration or
  second degree of decimal on maximum at best

4
Policy Stocktaking

• Critical Mass of fixed line infrastructure
  achieved
• 3 undersea cables, Fiber connectivity up to 1200
  cities, 4 Fiber optic backbone networks
• Substantial improvement in customer choices,
  prices and reach
• Rapid development of Cellular Mobile Sector
• Reach and penetration of upto 75 population
  (80.3 m subscribers) 70 geographic coverage
• Network expansion and roll-out on accelerated
  pace
• Essential infrastructure to help take-off
  broadband is in place
• Can Broadband Proliferation take-off from the
  foundations of current infrastructure?

5
Broadband Market Share in Pakistan

• Most of Existing Broadband infrastructure is
  mainly owned by the incumbents local loop copper
  just 3.5 telephones per 100 persons reach of
  fibre.
• Broadband coverage by all fixed line providers
  (DSL, Coax, FTC) including incumbent in past 3
  years of policy covers less than 5 of geographic
  area of Pakistan
• Penetration including incumbent on copper, Coax,
  FTC today is in the range of between 80,000 to
  85,000 customers at best
• Besides PTCL and NTC, Wateen, Linkdot, WOL,World
  Call Brain-net are few Broadband Service Provider
  owning some infrastructure

6
World Summit on Information Society (WSIS)
Indicators

• Digital Opportunity Index (DOI)
• Standard tool that governments, operators,
  development agencies etc use to measure the
  digital divide and compare ICT performance within
  and across countries constitutes of
• Opportunity Index
• Infrastructure Index, and
• Utilization Index
• The ICT Opportunity Index (ICT-OI)
• Stronger focus on traditional new ICTs, such as
  fixed-lines, wireless and televisions, as well as
  on measures of literacy and educational
  achievement constitutes of
• Network index
• Skills index
• Uptake index, and
• Intensity index

7
WSIS Indicators Analysis

• Pakistans rank in both these indices places it
  in the low-average category of almost 181
  countries at ranks 127 and 139 in DOI and ICT-OI
  respectively
• Utilization Index, which reflects progress in
  more advanced technologies for broadband access,
  is extremely poor within the DOI at 0.03
• Index suggests
• no commendable growth in e-markets
• low proportion of Internet, mobile subscriptions
  that have migrated to high-speed broadband access
  is also low. This low figure is especially in
  comparison to regional countries such as
  Malaysia, China, Thailand and Philippines, who
  have done much better
• Within the ICT-OI, Pakistans Networks (35.5) and
  Intensity (72.11) sub-indices show that the
  country is lagging behind in broadband uptake
  penetration. The analysis is further strengthened
  by the dismal value of our Skills Index, which is
  even lower than Bangladesh and Nepal (55.3).
• Infrastructure Index within the DOI of Pakistan
  (0.07), although better than India, is
  comparatively lower than that Korea, Egypt,
  Thailand, Iran and Indonesia.
• Can we overcome these fundamental barriers to
  promote broadband in Pakistan?

8
Constraints in Broadband Proliferation

• Demand Side
• Affordability (prices)
• Per capita Income of a Pakistani is 925. High
  inflation and spending patterns are important
  considerations
• Skill and Uptake
• Low Literacy rate
• Availability of quality human resource,
  intellectual, social capital and societal
  capacity.
• Poor availability of Local content
• Poor availability of quality and need-based
  e-services
• Supply Side
• Non-availability of dependable power supply
• Relevant wireless coverage and spectrum
• Quality of Access
• Low Corporate absorption strength
• Do we have enough demand pull and supply push to
  proliferate broadband beyond developed countries?

9
Opportunities

• Critical Mass of Infrastructure available
• Reach of high capacity fiber upto 45 Tehsils.
• Very good coverage of above 80
• Universal Service Fund Co (USF) taking
  infrastructure to rural and un-served areas
• RD Fund Co working towards improvement of
  intellectual capital to create critical mass of
  RD within the country
• Can we capitalize on these opportunities and
  leapfrog the developed world?

10
Current Global Broadband Scenario

• Today, there are about 400 million broadband
  subscribers worldwide and half of them are using
  fixed line broadband including copper twisted
  pair, coax or fiber to home etc.
• Best performing economies where fixed teledensity
  is higher, copper is contributing only 35- 40 of
  their total market.
• Rest of the market is on Wireless Broadband
  solutions including Wimax and 3Gbs beyond (like
  LTE), HSPA etc.
• Are we in-sync with the current global trends?

11
Future Trends

• Broadband will be an individual need
• Fixed broadband Service and Wireless broadband
  will co-exist.
• Wireless may catch up at a faster pace
• After 2010, the global broadband user number
  would exceed the 1 billion mark with 6 billion
  population. This means that every one person out
  of 6 would be an individual broadband user
• In Pakistan, broadband delivery in mobile sector
  is hardly moving from low speed data rate to high
  speed data rate delivery systems like HSPA, WIMAX
  (various segments) and other wireless options.
  Economic uptake can lead to 3/4 Cellular
  Broad-Band.
• Today there are about 400 million broadband
  subscribers worldwide and among them nearly 160
  million are using mobile broadband
• Are we on-track to meet challenges of upcoming
  future trends?

12
Importance of State Instrument

• The likes of Malaysia, Korea, Dubai,Singapur and
  USA took forward their connectivity drive
  through the help of the state mechanism
• Dubai Internet City was set up by Government of
  Dubai to provide free economic zone and strategic
  base for companied targeting emerging markets
• Malaysias Multimedia Supper Corridor Programme.
  Development of a dedicated intelligent city
  Cyberjaya
• Korean Agency for Digital Opportunity and
  Promotion (KADO)
• Some Key Programmes Projects
• US Department of Agriculture Programe
• Australian Broadband Guarantee programme 2007
• National Satellite Initiative 2003 Canada
• Columbian Governments broadband connectivity
  drive
• Brazilian Governments E-government - Services
  for Citizens programme

13
Broadband Vision by 2010

• Utilize USF Platform to promote Broadband under
  USF Co Subsidy Framework
• Concentrated USF efforts to kick start and
  proliferate broadband penetration. (Uganda,
  Mongolia, Burkina Faso and Malawi are already
  utilizing USF for broadband)
• With the help of Govt/USF operator efforts, the
  target 1.6M may be achieved till 2010 (including
  Broadband for schools, colleges, institutions
  etc) and 5 penetration by 2015
• Overcoming the initial delays USF Co would be on
  accelerated broadband pace beyond 2010. Pakistan
  may assume a very good position in the global ICT
  setup by 2015
• Sustained efforts will improve country ranking
  vis-à-vis WSIS indicators from Low to Medium
  average country.
• International IP bandwidth consumption may rise
  from current 7Gbps to 30-35 Gbps by 2010 and over
  100 Gbps (2015)
• Low income society segment may also benefit once
  affordable broadband is ensured
• Is this Vision realizable or optimistic?

14
Projected Individual Broadband Users till 2010-11
Description 2007-08 2008-09 2009-10 2010-11
Fixed Broadband base (from existing 100K) 150,000 250,000 380,000 500,000
Wireless 50,000 150,000 400,000 1000,000
Total Customer base 200,000 400,000 780,000 1500,000
15
Key Underpinnings of Framework

• Consistency with telecom policies
• Adherence to technology-neutrality
• Focus on affordability parameters
• Facilitation of market development through
  subsidy plan
• Assurance of complete fairness and transparency
• All inclusive framework
• Continuity of policy adopted for 14 LL regions,
• LDI and integrated licenses in broadband
  framework
• Benchmark availability of at least three BSPs in
  each region

16
Conclusions

• The Future is High Speed Broadband.
• Focus would be on all Fixed and Wireless
  Technologies.
• Government is fully Cognizant of the Trends
• Revised implementation Framework has been
  developed through stakeholder consultation
• Sensitivity, business and policy options analysis
  already conducted
• Study has been circulated and accommodates all
  options

17
Should Pakistan Leapfrog the Developed World in
Broadband penetration?

• There is no definite answer
• Challenge indeed exists
• However, we cannot leapfrog in a holistic fashion
• Must identify our niche and segments in which we
  can leapfrog