Pakistan’s Telecom Industry: Is the Honeymoon Over?

Posted on May 9, 2008
Filed Under >Babar Bhatti, Economy & Development, Science and Technology
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Babar Bhatti

The telecom honeymoon in Pakistan which lasted about 5 years (2002-2007) allowed Pakistani consumers to leapfrog over older landline based infrastructure and get cheap and quick access to modern telecommunication technology. The investors, telecom businesses and Pakistani treasury – all made good money and it was a win-win situation. It seems that the golden period for Pakistan telecom is over. The spike in teledensity and corresponding load on the new infrastructure is causing a number of service issues. To add fuel to fire the telecom rates for calls to Pakistan and within Pakistan have started rising, causing a lot of concerns. Consider the following points from the last few months:

Deceptive advertisements by Mobile Companies
Rise in local call charges by PTCL
Calls to Pakistan made more expensive

PTCL forces Pakistan package on its customers
Customer service calls are not free any more
Telecom consumer protection laws still in draft
Other emerging cosumer gripes

Some people hold the view that given the tremendous progress made, complaining about telecom situation in Pakistan is not justified. Yes, there have been great advances made but if we do not fix the structural issues early on, we will lose much of that progress. Left unchecked we may even regress to a point where there’s plenty of competition but consumers end up without the services they deserve at a fair price. Broadband is an appropriate example. Pakistani public has been tormented with poor service and caps on the usage.

I believe that with the right regulatory measures, consumer protection laws and a code of ethics we can keep the telecom sector on the right track.

15 responses to “Pakistan’s Telecom Industry: Is the Honeymoon Over?”

  1. zaheer says:

    well the problem is in our infrastructure due to which these issues arise. PTCl not giving proper internet speed telecommunications rising prices. But we can not deny the fact it was due to this huge comeptition in telecomunication world of pakistan due to which this progress has been made and people are enjoying benifits which were un imaganable before like free sms, free talk time and plus extra balance. Ithink this rise in prices will be temporary because the new companies will come in pakistan market becauses of huge margin of profit and competation will increase ultimately lowering prices but the consumer problem will remain due to lake of proper planing to attract consumers and the loyality of the consumers will also effect due to lake of planing.

  2. Babar says:

    There are many aspects in which Pakistani telecom consumers enjoy great deals – SMS is one. The source of many problems is PTCL as it struggles with the competition. Overall situation with voice is not too bad. If broadband problems are addressed then we will be in much better shape.

  3. Phoneuser says:

    Good post. Yes, the honeymoon is over, because it was just a honeymoon.

    I do think that this is just about consolidation mostly. However, you are right some of the structural issues also need to be resolved.

    But I really think that there are also too many companies in Pakistan. The market is just not that large. So, some of them will have to fall off or get merged because the market is probably likely to keep only about 3 or so, the others will just disappear and then we will have more stability in price as well as service.

  4. K.A. says:

    I agree with Eidee Man, even with the changes you mention, telecommunication costs in Pakistan remain amongst the cheapest in the world. Maybe even too cheap because of the fierce competition between providers.

  5. Eidee Man says:

    Also, deceptive advertising is a worldwide problem. Look no further than the housing crisis in the U.S.; even with a 99% literacy rate, people STILL signed up for loans they could not afford…simply because a lot of them just didn’t fully grasp what they were committing to!

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