Dawn of Mobile Internet Revolution


Mobile application developers and high-bandwidth wireless data network operators are being dramatically boosted by latest innovations, growing popularity and rising demand of smartphones such as iPhone, Blackberry, Palm Treo and other mobile platforms. Some 10 percent of phones shipped worldwide — and some 19 percent of phones sold at retail in the United States — are smart-phones. Taiwanese smartphone maker High Tech Computer Corp. (HTC) expects its sales in India to double in 2008, from 100,000 in 2007 to 200,000 in 2008. Although reliable figures are not available, Blackberry is finding traction in Pakistan and HTC is promoting its low-cost smartphones. Overall, there is room for substantial growth. In terms of wireless voice and data, markets with large populations and relatively low penetration rates, such as India, China, Philippines, Pakistan, Vietnam and Indonesia, will continue to grow at a rapid rate, according to an Aug 2008 report by Paul Budde Communication Pty Ltd.

Each platform provider is vying for greater developer mindshare and faster wireless networks to add value to its device and gain market share to become the standard in mobile computing and communication. These developments are pulling together all of the necessary ingredients for explosive growth of mobile internet business in the coming decades. Though it's early, this ongoing mobile platform revolution could easily eclipse the PC and Internet revolutions of the 1980s and 1990s. The reason is simple: The cost and convenience of mobile devices makes them much more affordable and useful to a much larger population of the world today.

In an earlier post titled Mobile Internet for Pakistan, I wrote as follows: With the personal computers and the Internet penetration in Pakistan in single digit percentages and the mobile phone penetration approaching 50%, should Pakistanis still aspire primarily for the Western style PC/Internet access model? The answer to this question is clearly a resounding NO. Here is an opportunity for a strategic leapfrog to ubiquitous Internet connectivity via the most prevalent device owned by the largest number of people--the mobile phone. It makes sense from many perspectives: Device cost, connectivity options, electricity availability, usefulness for the vast majority of people, etc.

So what would the mobile internet do for people? Many consumers already use programs that come with their phones to send text messages, browse the web or take and email pictures. In addition to standard widgets like time, temperature, stock prices, and maps, Apple is offering an iTunes like online store called AppsStore that lets users download and install applications. iPhone owners can install programs that let them tune into Internet radio stations or get directions to the nearest gas station.

In future, phones will be able to do a lot more. San Jose Mercury quotes analysts as saying:

1. By simply using your phone's camera to take a picture of a bar code, you will find out instantly whether the store across the street or one online is selling a coffee maker at a lower price than the store you are at.

2. Whenever your bank account dips below a certain balance, your phone will notify you — and allow you with one click to instantly move more money into the account.

3. If you have a medical device implant, you will be able to use your phone to instantly and automatically alert your doctor to any troubling conditions.

4. Your phone will be able to tell you when you need to leave your house or office to make an appointment on time, given existing traffic conditions along your route.

As PC-like standards emerge in the mobile space and all-you-can-eat data services become inexpensive , the natural progression toward cloning and commoditization will happen, thereby making highly useful and multi-functional mobile platforms more affordable and ubiquitous in emerging markets such as India and Pakistan.

Comments

Riaz Haq said…
Pakistan Telecom Report by Budde.com


Over the 2002-2009 period, the number of mobile subscribers rocketed from less than 2 million to more than 94 million (58% penetration). The 2006-2007 period in particular had been remarkable for the country’s mobile operators as the total subscriber base moved from 22 million at the beginning of 2006 to 77 million at end-2007. By early 2008, the 50% penetration milestone had been reached, probably much faster than most people expected. Despite a tightening national economy, coming into 2009 the mobile market continued to expand at an annual rate in excess of 10%.

By 2009, however, Internet penetration remained low and broadband growth had also been negligible. There was some good news on this front when the year 2008 saw an upsurge in broadband subscriptions; importantly, this looked to be continuing in 2009, boosted by the spread of competition throughout the market. DSL subscriptions were dominating the broadband market, quite overshadowing the cable modem broadband services provided using HFC infrastructure.

In the meantime, early signs of wireless-based broadband Internet technologies had begun to appear and by 2008 there were a number of WiMAX networks being rolled out in the larger urban centres. For the time being, however, the number of wireless broadband subscribers remains relatively small.

The big challenge in the short term for Pakistan’s telecom market will be to manage the impact of a pronounced downturn in the national economy. The 2008/09 fiscal year saw a huge dip in FDI as foreign investment in the country suffered a significant overall reduction. In the longer term the ongoing task of regulatory reform will be the major challenge.

Key highlights
• Despite a faltering economy and speculation that the mobile market was saturating, Pakistan still managed to grow its mobile subscriber numbers in 2009, reaching 94 million subscribers (almost 60% penetration) by June 2009.
• Growth in mobile subscribers was continuing at an annual rate of about 12% in 2009, modest compared with previous years, yet still representing healthy growth in the circumstances.
• Pakistan’s mobile sector has been boosted by increased competition, with newcomers Warid Telecom and Telenor (both launched in 2005) having quickly claimed big stakes in the market. By mid-2009, their combined market share had reached just over 41%.
• Broadband Internet penetration remains low in Pakistan (around 0.2% in early 2009) but 2008/09 had witnessed a strong surge in demand for broadband services that looked set to continue.
• Growth in the country’s fixed-line market remained sluggish; fixed teledensity stood at less than 4% by end-2008 with the numbers expected to only edge up slightly in the short term.
• One positive factor in the emerging fixed market has been the success of WLL technology which was supporting around 35% of all fixed subscribers by early 2009.

Pakistan – Key telecom parameters – 2008 - 2009
Category 2008 2009 (e)
Fixed-line services:
• Total subscribers (million) 6.2 6.5
• Annual growth -7% 5%
• Fixed-line penetration (population) 3.8% 4.0%
• Fixed-line penetration (household) 23% 23%
Internet:
• Total subscribers (million) 3.7 4.0
• Annual growth 6% 8%
• Internet subscriber penetration (population) 2% 2%
Mobile services:
• Total subscribers (million) 90.0 99.0
• Annual growth 17% 10%
• Mobile penetration (population) 56% 60%
(Source: BuddeComm)
Riaz Haq said…
Here is a recent blog post by Babar Bhatti about mobile financial services in Pakistan:

In Pakistan, the widespread infrastructure of mobile operators provides them strong advantages to serve as an important link in the financial services value chain. As we have seen in Pakistan, banks and mobile operators have partnered up to start MFS. This generated a wave of marketing activity (see these commercials) which also extended to social networks such as Twitter and Facebook, highlighting the competition among mobile network operators.

One may ask why did it take so long for MFS to start in Pakistan? Well, unlike entrainment or information services, financial and commerce related services require coordination of multiple institutes and approval of government regulatory agencies. Security, accuracy and establishment of trust of users is also very important.

Easypaisa. An example of this is ‘easypaisa’ from Telenor Pakistan and Tameer Microfinance Bank. Interesting thing about this service is that money can be sent and received without a mobile phone. However, using a mobile phone provides convenience as confirmations are sent as sms. Any person with a valid Nadra CNIC can send money or receive money. Sending/Receiving can be done from more than 4,000 easypaisa shops all over Pakistan. The transaction is encrypted and the process has been approved by the State Bank of Pakistan. Details on how this works are available at easypaisa website and on YouTube.

Regardless of one’s opinion on the convenience and the fees, one must admit that introduction of MFS such as easypaisa changes the status quo for payments which has been around till now in Pakistan.

Telenor is not the only company with plans for mobile financial services. Ufone started premium banking service for customers of Ufone who have account with one its partner banks. This is a different approach where an application on the handset allows eligible customers to carry out financial and non-financial transactions. Mobilink, the largest cellular company by subscribers, is also gearing up for MFS. In July, Orascom announced its plans for MFS:

Mobilink and Citibank will utilize Mobilink’s extensive retail infrastructure to extend the reach of financial services to the previously un-served masses. Using Mobilink’s cutting edge technology, Mobilink users will be able to open branchless bank accounts through a simple and convenient registration process via authorized agents across the country. The service will allow users to maintain their accounts through their phones and make secure peer to peer money transfers to any Mobilink number simply via SMS.

At telecompk.net we have extensively covered the potential, opportunities and market size of MFS.
Riaz Haq said…
Here's recent news on Pakistan's telecom sector expansion, as reported in Daily Times:

Despite inching towards a saturation stage, the telecom sector received $1.438 billion in year 2008 and $815 million in the following year - 2009 as FDI in different projects in the ministry and its attached departments.

The total Internet users of the country rose to 19 million with total broadband users rising to 413,809 million. Total direct and indirect jobs in the telecom sector are 1.36 million.

During the past two years, the total phone lines increased from 94.695 million to 103.801 million with mobile lines increasing from 88.019 million to 97.58 million, almost 59.6 percent upward slide, while the fixed lines declined from 4.416 million to 3.526 million, almost 2.2 percent downward slide. The democratic government, after taking over in February 2008, came forward with policy reforms and policy directives for the telecom sector for year 2010.

---------------------

Pakistan Telecommuni-cation Authority (PTA) Chairman Dr Mohammad Yasin opined that Pakistan’s telecommunication sector was growing faster, even more rapidly than that of India with over 63 percent teledensity, encouraging the FDI.

“Look, India is lagging far behind Pakistan with 37 percent teledensity as compared to 63.5 percent in Pakistan. Pakistan’s FDI policy is much more liberal than that of India to attract more investment in Pakistan’s telecom sector,” he added.

The PTA chief was of the view that the ever-growing teledensity of Pakistan is unleashing new vistas of opportunities to the foreign and local investors for better returns, especially in the field of data services.

“Services like mobile Internet, mobile banking and Internet Protocol Television hold fortunes for any wise investor,” he added.

The Telecom analysts around the world still believe in Pakistan to be a lucrative market and business monitor forecasts that mobile subscribers in Pakistan would hit 100-million mark by next year.

The sector has been growing at a rapid pace where growth rates have become the hallmark. Although a bit slower growth, of only 7 percent, was observed in mobile sector last year, this trend cannot be attributed only to saturation as there are factors like international financial crisis, devaluation of rupee, security situation and re-registration of SIM programme.

Riaz Haq said…
According to the World Economic Forum's Global IT Report 2010, Pakistan has jumped 11 places to 87 from 98 on a list of 133 economies.

Here's how Telecomnewspk.com reports it:

“It is evident that technology is playing a leading role in accelerating economic growth and promoting development,” said Competitiveness Support Fund (CSF) Chief Executive Officer Arthur Bayhan. CSF, a partner institute of WEF, is a joint initiative of the Ministry of Finance, government of Pakistan and the United States Agency for International Development (USAID), established to reposition Pakistan’s economy on a more competitive global footing.

Bayhan pointed out that CSF has carried out a policy action plan in 2008-09 to mobilise a dialogue across the telecommunication value chain to define the challenges that confront Pakistan’s telecom and IT industry and to address these challenges. The exercise resulted in an action agenda to tackle constraints and better position the ICT sector in Pakistan to take advantage of opportunities for growth.

“Now within 18 months of the exercise, many of the suggested initiatives and recommendations have taken effect so as to reshape the telecom industry in the most efficient and effective manner. CSF believes that through this focused initiative it has helped transform the Pakistan telecom domain,” Bayhan said.

Published for the ninth consecutive year with an extensive coverage of 133 economies worldwide, the Global IT Report remains the world’s most comprehensive and authoritative international assessment of the impact of ICT on the development process and the competitiveness of nations.

Pakistan has fared particularly well in the sub-indexes of Individual Readiness – mobile cellular tariffs (8) and residential telephone connection charge (11) while under the sub-index of Business Readiness the country does good in business telephone connection charge (15) and business monthly telephone subscription (17).

A marked improvement has been seen in Pakistan’s capacity for innovation, which has gone up from 73 last year, to 56 this time but it still requires further improvement. There have been slight improvements in quality of educational systems, up from 104 last year to 99, internet access in schools improving by six places to 75 and company spending on R&D getting better by six places to stand at 80. One of the recommendations put forward by CSF in the action plan was that the telecom operators in Pakistan adopt strategies for creating a conducive and competitive infrastructure cost sharing environment. Accordingly, major cellular operators of the country have signed agreements to get involved in infrastructure cost sharing thereby reducing infrastructure duplication and costs, noted Bayhan. CSF also recommended amplifying the bundled offers like voice and SMS with value-added services like MMS, Mobile TV, Mobile Banking, GPRS etc.
Riaz Haq said…
Here's a Reuter's story on smartphone price declines:

A new wave of cheap smartphones could soon do for the mobile industry what years of hype and investing in pricey 3G systems failed to accomplish -- combining must-have chic with affordable prices for data-hungry masses.

Prices of smartphones are falling sharply as handset vendors use free software such as Google Inc's Android and chip prices are also tumbling as semiconductor makers put baseband and application processors into one chipset.

Free software is significant since Microsoft Corp charges up to $15 per phone for cellphone vendors to use its mobile operating system.

China's ZTE, which cut its teeth making cheap phones for emerging markets, aims to repeat that success in smartphones with a new model it is putting on trial for about $150 per handset, said He Shiyou, head of the company's cellphone division.

The model, using Google's Android operating system, is expected to start shipping next month and could be sold globally, he said at the Reuters Technology Summit on Monday.

ZTE's phones will join a growing crop of cheaper but still intelligent phones designed to take on the likes of pricier traditional models such as Apple Inc's iPhone, which costs more than $600, and Research in Motion Ltd's BlackBerry, which typically costs $250 or more.

"It will have tremendous importance when smartphones come down to maybe $100 to $150, then you can reach all (consumer) segments," Johan Wibergh, who heads the mobile networking equipment division at Ericsson, the world's largest cellular equipment maker, said at the Summit, which was taking place at various Reuters offices worldwide.

ZTE's cheap smartphone, which it is developing for domestic carrier China Unicom , follows similar moves by a number of companies and could mark the beginning of a new wave of phones to enter the market priced at around $100 to $150.

Global cellphone leader Nokia Oyj already sells a model whose price starts at 125 euros, while Chinese vendors are expected to take prices into largely uncharted territory.

"We are going to have an Android device for 85 euros ($105) by the end of the year," Oren Nissim, chief executive of satnav software maker Telmap, told the Reuters Summit in Paris, but he declined to name the manufacturer.

Telmap and many other major mobile software vendors have access to upcoming phone models well before they are introduced to the general public.

ZTE, NOKIA, HUAWEI, GOOGLE TO WIN

The expected boom should benefit companies such as ZTE, Nokia and China's Huawei that have expertise developing models for cost-sensitive emerging markets and have the manufacturing clout to develop new models cheaply.

"The market is seeing an abundance of affordable smartphones, but that raises a new challenge for operators in how to make data tariffs attractive and accessible on prepay," said CCS Insight analyst Geoff Blaber.

It could also benefit carriers with 3G networks who stand to reap more money from the data-rich services, such as online gaming, music streaming and Web surfing, that such smartphones are good at.

Ericsson and other network equipment providers could benefit too as carriers boost capacity on their networks to accommodate rising demand.

Another possible beneficiary is Google, as its Android system is fast becoming the preferred choice of many low-end smartphone makers.

"Cheaper smartphone prices are only going to benefit two groups of people: telecoms operators and Google," said Vincent Chen, an analyst at Yuanta Securities in Taipei.

"Falling smartphone prices aren't going to be good for handset brands and they'll need to get used to these cheaper prices and lower margins soon," he said.
Riaz Haq said…
Here's a news story about Micromax, an Indian handset manufacturer, targeting the price-sensitive customers in the developing world:

Their strategy for other emerging markets will be similar to that in India: Sell phones loaded with features at dirt-cheap prices. Micromax, for instance, sells smart phones at less than Rs 8,000, which is 33 per cent below multinational rivals. All Lava phones are priced below Rs 6,000. The company plans to introduce smart phones and Qwerty handsets within this price range. Most of them import in bulk from China, though application development and product design happens in India.

“We have chosen to penetrate these markets because our products with features like dual SIM and dual memory card, we thought, would be right for these emerging markets,” said Spice Mobile’s head of marketing, Naveen Paul. “We strongly feel that these markets are very similar in nature to the Indian market, and we perceive a huge opportunity. Given the similarity in socio-economic conditions, the consumer preferences in these markets are quite similar to those in India,” Karbonn Mobiles Executive Director Shashin Devsare added. “The youth in these markets have got a sporty attitude, and they want features that are beyond voice and text, and Lava handsets offer the same with in-house software,” said Lava International Co-founder and Director SN Rai.

But some of these markets could be different from India. “Brazil is technologically one step ahead of India, as 3G came to the country a year back. But it’s not advanced like Europe which is a 4G-technology market now,” said Jain. “The differentiator for Micromax will be its innovative product design.” The challenge that all Indian brands will have to crack is distribution. But if they can get their distribution network in place in a large country like India, there is hope that they will do it in other markets as well.
Riaz Haq said…
Broadband users in Pakistan have reached 816,807 mark, as of April 2010, as per recently published stats by Pakistan Telecommunication Authority.

PTA stats said that Internet Service Providers of Pakistan added a total of 44,370 broadband subscribers in April 2010 compared to addition of 55,932 broadband subscribers in March 2010.

These statistics suggests that DSL still has 55 percent market share of total broadband market in Pakistan (in terms of subscribers), while WiMAX stands second with 30 percent subscribers’ market share.

EVO EVDO witnessed highest growth rate in last two quarters and has added its market share in terms of subscribers by 3 percent, while WiMAX subscribers’ market share grew by 2 percent.

On other hands, DSL users decreased by 3 percent and HFC saw a decline of 2 percent in market share in last 7 months.

Pakistan Telecommunication Company Limited (PTCL) now extends its wireless Broadband EVO service to 100 major cities and towns across Pakistan. PTCL EVO is a superior 3G wireless technology that gives opportunity to roam freely with an average download speeds from 300 kbps to 500 kbps.

PTCL has made the broadband technology affordable by lowering the barriers to entry and now geographically, the service is within the reach of a large number of Pakistanis.

The major cities that PTCL EVO covers are, Karachi, Lahore, Islamabad, Peshawar, Quetta, Hyderabad, Chakwal, Gujranwala, Muzzafarabad, Rawalakot, Mirpur, Okara, Sargodha, Sialkot, Multan, Faisalabad, alongside other small towns and cities across Pakistan.

Expansion of PTCL broadband network will continue to ensure that more customers get the opportunity to experience the latest wireless broadband and related technologies.

Naveed Saeed SEVP Commercial, on achieving this important milestone, said that the EVO launch in 100 cities reflects PTCL’s commitment to connect its customers to the world via Internet and the company’s commitment to provide its customers with best telecom services at their doorsteps. Working in a market where technology changes every minute, PTCL always strives to introduce products and services that brings more value to its customers.
Riaz Haq said…
US soldier builds an iPhone app for artillery fire, reports Bloomberg:

At Camp Blessing in Afghanistan’s Pech Valley, some American soldiers played “Angry Birds” on their iPhones when off-duty. Jonathan Springer decided to put his device to a different use: building an app to help fight the Taliban.

“I wanted to give something back to soldiers that might help save their lives,” Springer, 32, said in an interview from his base at Fort Bragg, North Carolina.

The result is Tactical Nav, an iPhone application the U.S. Army captain built with $30,000 of his savings and a maxed-out credit card a year ago. The $5.99 app uses GPS technology and the iPhone’s camera to chart coordinates and guide artillery fire. It has been downloaded about 8,000 times by U.S., Canadian and Australian soldiers, as well as hunters and hikers, Springer said. From e-mails he has received from soldiers who have gone on patrol with it, the app has been used in both combat and training, Springer said.

If Teri Takai gets her way, American soldiers, sailors and marines may all soon be able to download Tactical Nav and other military programs through a dedicated U.S. Defense Department app store. Takai, the department’s chief information officer, wants to build a secure network of smartphone apps to help soldiers fight in new ways, from more precise maps to better manuals. If security challenges get resolved, the project will result in a revenue source for app developers and a potential boon for iPhones, iPads and Android devices.


http://www.bloomberg.com/news/2011-12-15/soldiers-iphones-guide-artillery-fire-as-pentagon-plans-app-store-tech.html
Riaz Haq said…
Here's an excerpt of a BR report on smartphone market in Pakistan:

(Pakistan currently has) five to six million smartphone users.

A rather bullish estimate is cast by Ericsson Pakistan which anticipates some 50 million smartphone users in Pakistan by 2016, accounting for 70 percent of operator revenues.

It could, however, be misleading to equate the potential mobile broadband uptake entirely with the incidence of smartphone users in Pakistan.

The cue might actually lie in the current mobile internet usage, which is reportedly growing despite high tariffs and laggard speeds on GPRS/EDGE networks.

According to PTA Chairman, mobile internet users crossed 15 million in June 2011, just four million shy of PC internet users.

Telenor Pakistan, arguably the dominant player in mobile internet services, shared with BR Research that every fourth Telenor customer is a mobile internet user.

High adoption rate is found in the 18-26 age, cohort and significantly higher data consumption is witnessed among business users who are mostly aged 30 and above.

Rural and semi-urban areas in the North are reported to have surprisingly high usage.

Interestingly, just three percent of total handsets on Telenors network are smartphones, when over a quarter of its customers have been mobile internet users.

This possibly means that the feature phones are at work here, which are not smartphones but have additional functions over dumb phones, including internet settings.

This could imply that the barriers to smartphone adoption may not really hold back the mobile broadband uptake, because a feature phone would suffice to access high-speed internet.

However, the appeal of a smartphone - which is capable to communicate with platforms like Android Market, Apple Store, and Blackberry App World, along with a plethora of third-party mobile applications - cannot be matched.

Besides handset functionality, the telecom leaders in their interactions with BR Research have cited two other decisive factors for the growth in mobile broadband users.

These are the development of local language content and creative mobile applications, and pricing of the data services as per needs of various segments.

There is a strong case for a large-scale mobile broadband adoption in Pakistan given the current data consumption trends.

A high penetration of mobile broadband can go much beyond mobile entertainment, social networking, and business usage.

It will augur well for areas, like education, healthcare and governance that are in dire need to be turned around for Pakistans socioeconomic progress.


http://www.brecorder.com/br-research/35:35/2382:smartphones-and-the-mobile-broadband-market/?date=2012-03-22
Riaz Haq said…
Here's 2012 BMI research report on consumer electronics market in Pakistan:

BMI expects the Pakistan consumer electronics market will grow by around 9% in 2012, with strongdemand for smartphones, flat screen TV sets, and tablets providing growth, despite an expectedslowdown in private consumption. The Pakistani consumer electronics market has considerable potential,but this is constrained by a large grey market, poor IP protection, an unstable economic and securitysituation, and weak distribution channels. Reforming high national and provincial taxes and tariffs onproducts ranging from computers to prepaid mobile cards would boost the market. The long-term marketdrivers include a rising population and growing affordability and demand for consumer electronics goodsis also influenced by trends from Middle Eastern markets.

Headline Expenditure Projections Computer sales: US$309mn in 2011 to US$331mn in 2012, +7% inUS dollar terms. Forecast in US dollar terms upwardly revised, despite a high level of illegal imports.AV sales: US$645mn in 2011 to US$710mn in 2012, +10% in US dollar terms. Forecast in US dollarterms upwardly revised, with the main driver being demand for flat-screen TV sets.

Handset sales: US$750mn in 2011 to US$816mn in 2012, +12% in US dollar terms. Forecast in USdollar terms upwardly revised, but despite the popularity of smartphones, most handsets are sold at lessthan US$50.

Risk/Reward Rating: Pakistan’s score was 28 out of 100.0, with low CE market and Country Structureratings dragging down high Potential Returns. Pakistan took thirteenth place in our latest RRR table, buthas potential to rise over time due to the size of the market.

Key Trends & Developments

The TV sets segment is forecast to grow at a CAGR of about 12% as consumers replace blackand white, and analogue sets with colour and LCD models. About 49% of TV sets sold each yearare still black and white. If the government is unable to crack down on smuggled goods, growthcould be slower than this.

PC vendors must contend with a significant segment of demand being met by imports of usedcomputers from countries such as China. The government has denied reports it plans ban importsof used computers, which is a measure strongly opposed by local retailers. The price differentialbetween an imported second-hand computer and a new one is considerable, according to localimporters.

In 2012, established brands will hope to regain some market share as a result of thegovernment’s recent ban on imported handsets without IMEI numbers. Low-cost Chinesephones are understood to account for around 30% of the local handset market. According toretailer reports, although the ban hit sales of low-cost Chinese handsets, Chinese reacted quicklyto the new circumstances. Meanwhile, established vendors are targeting the low-price tier withproducts offering dual-SIM support and other features that have proved popular for the low-costbrands.


http://www.marketresearch.com/Business-Monitor-International-v304/Pakistan-Consumer-Electronics-Q4-7165551/
Riaz Haq said…
Here's Businessweek on PTCL profitability:

Pakistan Telecommunications Co. (PTC), the country’s biggest phone-service provider, forecast a return to profit by its fiscal fourth quarter as workers opting for early retirement cut labor costs.

“We will return to profitability after we absorb the cost of retiring employees,” Naveed Saeed, senior executive vice president for the Islamabad-based company’s commercial unit, said in an interview on Oct. 22. “Our revenue growth is strong and we are really trying to contain the costs.”

Pakistan Telecom has struggled to increase revenue from its fixed-line unit as mobile-phone operators including Telenor ASA (TEL) and China Mobile Ltd. (941) grab market share. The telecommunications market was deregulated in 2004, and the number of mobile-phone users jumped more than ninefold in the past seven years in the country of 180 million people.

Profitability for Pakistan Telecom was hurt in the first quarter as it absorbed the cost of a voluntary retirement progam that reduced its workforce by between 5,000 and 6,000 employees, Saeed said at the company’s headquarters. A similar program in 2008 saw 35,000 of 50,000 employees retire early.

Saeed forecast 7 percent sales growth for the current financial year, which ends in June. That’s higher than the 6.4 percent average annual revenue growth for Pakistan Telecom in the past five fiscal years, according to data compiled by Bloomberg. About half of the company’s revenue goes to paying salaries for an estimated 25,000 permanent and contractual employees.
Stock Performance

Pakistan Telecom fell 3.3 percent to 18.57 rupees yesterday. That pared the stock’s gain this year to 79 percent, compared with an advance of about 40 percent for the Karachi Stock Exchange 100 Index.

Pakistan Telecom, controlled by Emirates Telecommunications Corp. (ETISALAT), posted a loss of 8.26 billion rupees ($86.4 million) in the three months through September, its first quarterly loss in more than four years. That compared with a profit of 2.23 billion rupees a year earlier.

Fixed-line users fell to 2.9 million last year from the peak of 5.2 million in Pakistan Telecom’s financial year that ended in June 2005, as more people switched to mobile phones.

The number of mobile-phone users in the country grew to 119.8 million as of May this year from 12.7 million in 2005, according to the Pakistan Telecom Authority.
‘Steady Growth’

“They will be back to profit by the end of this year,” said Ayub Ansari, a Karachi-based analyst at AKD Securities, in a telephone interview. “There has been a steady growth in their core businesses. The cellular segment continues to grow, plus the broadband segment is also very exciting. That’s the next big thing for Pakistan and PTCL in particular.”

Pakistan Telecom derives most of its sales from the broadband unit, which has more than 1 million customers and contributes about 25 percent to profit, Saeed said. Aqeel Shigri, a spokesman, said the unit has a market share of 90 percent.

The company, which also owns the country’s third-largest mobile-phone operator Ufone, plans to bid for 3G bandwidth licenses the government plans to auction this financial year, Saeed said.


http://www.businessweek.com/news/2012-10-24/pakistan-telecom-sees-return-to-profit-as-workers-retire-early
Riaz Haq said…
Here's an ET story on the growing popularity of Android phones in Pakistan:

... QMobile – the first Pakistani mobile phone company – has introduced phones packed with high-end features at very competitive prices to the Pakistani market, and it seems to be doing great business.

This Karachi-based company was set up by Mian Pervez Akhtar of Allied Electronics Industries – an importer, assembler and distributor of LG products in Pakistan – around five years ago. According to our sources, QMobile’s revenues have witnessed a phenomenal boost since then: for the year ended June 30, 2012, its revenues stood at Rs761 million – up by a staggering 85.8% over the previous year.

However, the company operates with a different business model as compared to companies like Samsung and Nokia: although it calls itself a mobile phone company, QMobile does not manufacture its own devices; instead, it imports them from vendors in China, and sells them under its own brand. The same phones are sold in India for example under the Micromax label.

QMobile’s growth has taken measured steps. The company started with selling basic mobile phones: “Their low-end devices still account for most of their revenues,” an industry source says. QMobile has a large customer base in rural Pakistan, which accounts for more than 65% of the population. It entered the smartphone segment relatively recently.

Its product range now includes phones with touchscreen features, QWERTY input and WiFi-accessibility. It has also launched a series of smartphones powered by the Android operating system, which is the most commonly used smartphone platform today.

QMobile has built itself a strong image in the market, because it provides fairly high-end features at prices affordable for most Pakistanis: you can now buy a branded Android smartphone for as low as Rs6,500, complete with a warranty, thanks to QMobile. This may well be the primary driver behind QMobile’s growth.

“Basic phones constituted about 90% of Pakistan’s mobile phone market five years ago, but this equation is changing now,” an industry source said. “Consumers are shifting from basic mobile phones to feature phones and smartphones, and today they account for more than 20% of the market. Out of that, smartphones alone account for more than 10% of the market,” he said.

QMobile claims to be the number two brand in the country: and industry sources say that in the absence of any accurately verifiable numbers, this may be so in terms of the volumes of units it sells.

A heavy marketing campaign has also helped the company build a strong brand name. “QMobile is a success story, especially in terms of branding,” a telecom consultant said. Its advertising budget is higher than even that of market leader Nokia, an official revealed.

This is one of the main reasons behind the brand’s success. The company has even used product placement as an advertising technique to promote its products. Take, for example, Bulbulay: a primetime sitcom, which often promotes QMobile products, one source pointed out. “This kind of advertising does not cost much, and earns the company valuable marketing: that too in prime time hours,” he said. Moreover, QMobile has always used Pakistan’s hottest celebrities in advertising its products. Pop singers Atif Aslam and Abrarul Haq have promoted QMobile phones in the past. Iman Ali has modeled for them. Hugely popular television celebrity Fawwad Khan is now promoting their top-tier Noir smartphones. All these factors have helped QMobile make a name for itself as being in a league apart from the cheap Chinese copies of popular handsets currently circulating in the market.....


http://tribune.com.pk/story/532133/qmobile-conquering-the-pakistani-market-one-phone-at-a-time/
Riaz Haq said…
Here's a Toronto Sun story on rising use of smartphones in Asia:

It’s not just the prices of phones that are dropping. Tablet prices are actually falling at a faster rate creating across the region what Singh calls “a whole new category of Internet user.”

Demand for tablets in the Philippines, for example, grew fourfold in the past year, according to consultancy GfK; prices across Southeast Asia during that period fell by a quarter.

Talmon Marco, CEO of Internet phone and messaging service Viber, says the shift from a standard phone to even the most basic device running operating systems like Android is like “moving from a great bicycle to an old leaking 1970s car. That car can still take you from New York to Chicago in a couple of days. The bicycle never will.”

Whatever the quality of hardware or connection, a smartphone or tablet shares the same DNA - user interface, apps and access to an online store - which stimulates higher usage, Marco says.

“The spike in usage seems to happen when the user moves to a smartphone - any smartphone,” he said. “These users are by far more active than users on a feature phone.” Viber is seeing its fastest growth and highest usage in Vietnam, Pakistan, Myanmar and many African countries.


http://www.torontosun.com/2013/07/23/for-the-mobile-internet-tomorrow-belongs-to-asia
Riaz Haq said…
Here's a Pakistan Tribune story on smartphones in Pakistan:

Currently, around 119 million people in Pakistan own a cell phone which is about 68.6% of the entire population. Furthermore, out of all the cellphones sold 6% are specifically smartphones. Similarly, from all the smartphone brands available in Pakistan, Samsung has the highest market share (39%) followed by HTC (22%) and Sony (8%).
HTC is a Taiwanese manufacturer of smartphones and tablets which have managed to capture the attention of the entire world. Recently, to further improve their position in the smartphone market, HTC has signed Robert Downey Jr. for its marketing campaign “Here’s to change” which is expected to help increase HTC’s sales, after their recent loss in stock value. This Taiwanese phone-maker is going all out with the introduction of this $1 billion marketing campaign. Other than implementing these stringent marketing strategies, the smartphones which have recently been introduced by HTC have also upped the game. Some of the best smartphones which have been introduced by HTC are:

HTC ONE
HTC has recently launched HTC One, which has taken the mobile phone market by storm. It boosts an amazing camera which has a remarkable low-light performance, a new interface which helps combine all your social media and news feeds into a single place, great sound and a brilliant 4.7 inch screen which helps provide the best immersive experience. Also, its user-friendly features and its impressive aluminum body construction may help HTC in capturing the mobile phone market.

HTC One mobile price in Pakistan:- Rs.65000/-

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HTC Desire C
Not everyone can afford the latest android technology but that doesn’t mean that everyone should have to live without it. HTC desire specifically caters to the needs of these people; it’s one of the best budget phones which is equipped with the latest android technology. The main selling point of HTC Desire C is that it has a 3.5 inch screen with a 600MHZ processor and that too at such a low price. Also from its high end look it is almost impossible to guess that it’s a budget phone. One major advantage that Desire C has over its competition is the addition of HTC sense which supercharges this device.
---
HTC Desire C price in Pakistan: – Rs.11,000/- to 15,000/-

HTC Wildfire
A smartphone for those on a tight budget, the HTC Wildfire doesn’t hold back on the specs; the touchscreen handset runs on Android 2.1 which is equipped with user-friendly HTC Sense UI but one issue is that it has the same processing power as 2009′s HTC cellphone, the HTC Hero.

HTC Wildfire Price in Pakistan: – Rs. 12,000/-

HTC 8X
The HTC 8X is the epitome of elegance, not only is it beautifully designed, it is equipped with all the necessary features required in a smartphone. It is definitely one of the best smartphones which gives other windows 8 (operating system) based smartphones a run for their money. It’ll certainly raise eyebrows when you hold this cellphone in your hand – not just because it’s colorful, but also because it’s so beautifully made with unibody, polycarbonate design.
Another attractive feature of HTC 8 X is its high resolution screen – which measures about 4.3 inches coming in at 1280 x 720 pixels. It’s considered to be as good as Apple’s Retina (which is the current best) or maybe even better.

HTC 8X price in Pakistan: – Rs. 46000/- to Rs. 50,000/-
...


http://www.pakistantribune.com.pk/4170/a-review-of-best-htc-mobiles-in-pakistan.html
Riaz Haq said…
Here's a Pew survey on the use of cell phones to access the Internet:

Six in ten cell phone owners (63%) now go online using their mobile phones, an eight-point increase from the 55% of cell owners who did so at a similar point in 2012 and a two-fold increase over the 31% who did so in 2009. We call these individuals “cell internet users,” and they include anyone who:

Uses the internet on their cell phone (60% of cell owners do this), or
Uses email on their cell phone (52% of cell owners do this)
Taken together, 63% of cell owners do one or both of these things, and are classified as cell internet users. Since 91% of Americans are cell phone owners, this means that 57% of all Americans now go online using a mobile phone. The steady increase in cell phone internet usage follows a similar growth trajectory for smartphone ownership. Over half of all adults (56%) now own a smartphone, and 93% of these smartphone owners use their phone to go online.

The demographics of cell phone internet usage
Just as the overall increase in cell phone internet usage has coincided with the growth in smartphone adoption, the demographic groups most likely to go online using their phones tend to match those with high levels of smartphone ownership. In particular, the following groups have high levels of cell phone internet use:

Young adults: Cell owners ages 18-29 are the most likely of any demographic group to use their phone to go online: 85% of them do so, compared with 73% of cell owners ages 30-49, and 51% of those ages 50-64. Just 22% of cell owners ages 65 and older go online from their phones, making seniors the least likely demographic group to go online from a cell phone.
Non-whites: Three-quarters (74%) of African-American cell phone owners are cell internet users, as are 68% of Hispanic cell owners.
The college-educated: Three-quarters (74%) of cell owners with a college degree or higher are cell internet users, along with two-thirds (67%) of those who have attended (but not graduated) college.
The financially well-off: Cell phone owners living in households with an annual income of $75,000 or more per year are significantly more likely than those in every other income category to go online using their phones. Some 79% of these affluent cell owners do so.
Urban and suburban residents: Urban and suburban cell owners are significantly more likely to be cell internet users than those living in rural areas. Some 66% of urbanites and 65% of suburban-dwellers do so, compared to half of rural residents....


http://www.pewinternet.org/Reports/2013/Cell-Internet/Main-Findings/Cell-Internet.aspx
Riaz Haq said…
Smartphones to double next year, reports Dawn:

The market share of smartphones is expected to double next year as stiff competition rages among cellphone makers with moderate prices and cheap Chinese brands penetrating the market.

Nokia Android phones have also hit the markets where Q Mobile, Samsung, Huawei, Sony, LG, Voice, G-Five, VGO Tel, etc continue introducing new smartphones with more advanced features and competitive prices. However, feature phones (not smart or android) still hold 80 per cent market share and cost between Rs2,500 to Rs4,000.

According to Director United Mobile, Azad Lalani, smartphones share will jump to about 40pc next year from the current 15-20pc.

Pakistan’s monthly sales of overall cellphones is estimated at 1.5 to 1.7 million units. The start of 3G services will further boost sales of smartphones.

Market sources said that one of the Chinese cellphones now holds a major market share with sales of 600,000-700,000 units per month, a sector that was previously dominated by Nokia. The price of smartphones (Chinese brands) starts from Rs7,000 and touches up to Rs60,000 plus for many major brands.

Country General Manager Nokia Pakistan and Afghanistan, Arif Shafique said, “We have recently launched the first of our Nokia X range of smartphones in Pakistan. The device runs on the Nokia X Software Platform, which is built on the standard Android Open Source Project (AOSP).”

Shortly, the company will expand the range of Nokia X devices in Pakistan across all price points. The recently launched Nokia X is available at an estimated price of Rs13,500.

“Pakistan’s mobile market is burgeoning and the users are becoming more and more tech savvy,” he said.

On grabbing market share in Nokia Android phones, he said as per Nokia policy he cannot comment on the company’s market share by country or region. “I believe there is consumer demand especially in the affordable smartphone space,” he added.

Regarding investment in the launch of Android phones in Pakistan, he said: “The investment is largely in the marketing and promotion of this new range, as well as in supporting Pakistani developers to come up with more locally relevant apps for Nokia X family.”

Currently Nokia phones are arriving from China for the Pakistani market. “As and when trade between India and Pakistan opens, we will weigh both options — of importing from China and India.”

“We will opt for the one that will offer the best value to our consumers in Pakistan,” he said.

On Microsoft’s acquisition of Nokia devices and services business, the general manager said, “Our transition with Microsoft is shaping up to close in April and our journey towards bringing smarter mobile devices and smarter technology is going ahead with this transition.”


http://www.dawn.com/news/1096258/smartphone-market-to-double-next-year

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