Broadband growth Don’t blame the economy!

Despite ongoing economic challenges faced by the country, Pakistan is experiencing a phenomenal growth of Broadband Internet, which has become a household product. The current global economic recession has had a spiral effect worldwide and few segments have been able to resist its impact. However, this amazing growth of Broadband in the last one decade is an outstanding national success story. High-speed Internet streaming is revolutionizing the way people learn, communicate, work and do business. Broadband Internet is now the backbone of corporate services and even small businesses.
Owing to their own limitations, some telecom operators are making misleading claims about the state of Broadband penetration in Pakistan by incorrectly linking it with the country’s economic situation. Contrary to such ill-informed claims made in haste, the country has witnessed 70 times increase in Broadband proliferation in the last six years. The numbers speak for themselves.
According to Pakistan Telecommunication Authority (PTA) data, the number of Broadband Internet subscribers in Pakistan increased from less than 27,000 in 2005-06 to more than 1.9 million in 2012, which is no small feat. Internetworldstats.com puts Pakistan’s total Internet users at more than 29 million with a population penetration of 15.5%. The total number of fixed phones and mobile phone subscribers stand at 3.10 and 118.32 million, respectively. PTA data further reveals that Broadband Internet put up an impressive growth rate of 28% from June 2011 to March 2012, surpassing mobile growth rate which stood at 9% for the same period.
Given these facts, conveniently blaming the economy to cover operators’ own institutional limitations and lack of infrastructural capacity tantamount to a disservice to the nation!
Broadband services were first introduced in Pakistan in 2001 by installing equipment on existing copper lines used for provision of telephony services. Initially, DSL Broadband services were only provided to a small consumer base of high-end users in the big cities. But progress was slow and penetration negligible. In response, Government of Pakistan introduced the Broadband Policy of 2004, revising backhaul bandwidth charges downwards to propel broader penetration.
In the face of rapidly increasing demand for affordable Broadband services and to fill the void of quality service provision, Pakistan Telecommunication Company Limited (PTCL) entered the country’s retail Broadband market in 2006. It was the last company to enter the market when there were 25 other operators already active on the ground. Giving up its monopoly, the country’s largest and oldest telecom company strategically re-positioned itself in a fiercely competitive market while carrying its complicated but proud legacy.
The impact of this strategic move surpassed all expectations. PTCL’s entry in the Broadband market had a major impact and the retail tariff was rationalized significantly. Broadband services were made accessible to every nook and corner of the country. More than 10,000 customers were achieved within the first 120 days of PTCL Broadband Pakistan’s launch, where as it took four years for all the other market players collectively to reach 30,000 customers mark.
Today, PTCL is the Number One Broadband service provider in Pakistan with 90% market share, having pioneered the most popular and diverse portfolio of products and services ever offered in this market. It has surpassed market competition by leaps and bounds. For the first time in Pakistan’s history, the company celebrated this year the 1st million broadband customers mark. PTCL has proved the fact that when a successful telecom operator comes to a country, it transforms the market.
It is pertinent to mention here that this Broadband growth has been achieved during recession years where average GDP growth rate has remained less than 4% per year. It is even more phenomenal considering the fact that it is now a household product i.e. one connection serves the whole family. A typical Pakistani household has 6.2 members on average, which accumulates into 29 million households, so the real impact is far greater.
Pakistan is ranked among the top few countries to have registered high growth in Broadband Internet penetration in recent years. According to global Broadband tracker, Point Topic’s 2011 report, Pakistan stood at fourth place in Asia with 46.2% growth in subscriber base; whereas, Sri Lanka and India were placed at 11 and 14, respectively.
The tremendous potential of Broadband Internet in Pakistan can be gauged by analyzing the last four years’ progress through PTA’s data. Broadband Internet penetration was less than 1% per household in 2008. In 2012, it has reached 7%.
This mammoth growth has fuelled a Broadband revolution, resulting in an increase in customer base and also helping wireless Broadband technologies to expand setting the economic wheel in motion. PTCL has achieved this unprecedented success through an innovative customer approach, elimination of the traditional barriers, such as the upfront costs of installation and customer premises equipment. It has fueled the rise of businesses, jobs and opportunities.
Despite the hollow claims, the truth is that the growth trajectory of Broadband is not the same for all operators. Sluggish economy and power crisis is not the reason for this stark dichotomy. Rather, it depends on an operator’s network, infrastructure capabilities, investment size, business model and growth strategy.
Technology takes time to grow, but once the wheel is set in motion the effect is viral. If there are inconsistencies, revisit your business model and rationalize tariff along with greater excitement for the customers.
PTCL is a strong case in point for the Broadband sector. Its success can be set as an industry model. Banking on its previous success and believing in the strength of Pakistan’s economy and growing awareness of the people, PTCL Group has made a commitment to invest Rs.100 billion in the Broadband sector in the next five years. We believe in the potential and promise of this dynamic market. It’s not about economy; it’s about capability!

The writer is Senior Executive Vise President/Chief Commercial Officer of Pakistan Telecommunication Company Limited (PTCL).