Pakistan Cellular Market has emerged as one of the most competitive
sectors of the economy. Today we have more than 125 Million Subscribers
and the cellular mobile Teledensity has crossed 70% mark. The industry
is largest contributor of foreign direct investment, 2
nd
largest contributor of GST, 5% contribution of annual GDP of Pakistan
and provides approximately 1.5 Million direct and indirect jobs.
It is an irony that despite all these positive indicators most of the
cellular mobile operators today are incurring loss. The growth in
cellular mobile sector which mostly started during the Musharraf regime
has slowed down since 2008. Cellular Mobile services which are globally
considered as a driver and economic growth are projected as the main
facilitators behind all the terrorist activities in Pakistan.
An environment has been created wherein it has been portrayed that
all terrorist activities have been planned and co-ordinated through
cellular mobile phones. It has been portrayed that today there is no
check and balance on the issuance of SIMs and anybody can get SIM on
anybody’s name.
The law enforcement agencies have also quoted that today more than
4.5 Million unverified SIMs are available in the market which are mostly
used in the terrorist activities, however despite repeated requests no
source of this information has been shared.
It is very important to set the records straight that it is the
responsibility of Pakistan Telecommunication Authority and the
Government of Pakistan to share the Standard Operating Procedure (SOP)
for issuance of SIMs. Historically pre-activated SIMs were sold in the
market. However in 2007 as per the directions of Pakistan
Telecommunication Authority the transition was made from activated to
inactive SIMs which were activated subsequent to NADRA verification. The
process was changed once again in 2009 as per the directions of
Pakistan Telecommunication Authority when 789 system was deployed.
As part of this system all the SIMs were activated after NADRA
verification based on the details available at the CNIC of the
subscriber and additional secret questions including mother maiden name
and the place of birth.
This was assumed to be a fool proof system and cellular mobile
companies invested billions of Rs. in this system. However during the
meeting with the CEO’s of cellular mobile companies held on 6
th
September 2013 under the chairmanship of Secretary Interior, the
interior ministry officers informed the participants that the NADRA data
including the secret questions is available in the market by paying
mere Rs.200 thus rendering the 789 based verification ineffective.
Thus the billions of rupees spent by the cellular mobile companies on
the deployment of 789 system have gone down the drain only due to
security breach at the NADRA end. Now the Government of Pakistan has proposed biometric based system
for the verification of subscriber identity and expects cellular mobile
companies to again invest billions of rupees in this verification
system.
However the biometric based verification system has not been used
anywhere in the world for SIM issuance purpose. The biggest nightmare
for the cellular mobile companies which the Government of Pakistan has
failed to realize and foresee is that while previously NADRA database
was selling, now it is apprehended that biometrics will also be
available in the market which can be used for all sorts of criminal
activities and property transfers.
It is high time for the government to review the worsening situation
of the telecom sector. The profitability of the cellular mobile business
has evaporated during the last few years. The ARPUs have shrunk while
the operating costs have increased due to high impact of inflation in
fuel, HR, government NOC’s and operations and maintenance costs.
Although the Cellular Mobile Policy recognizes the Right of Way for
cellular mobile network deployment, however today there is no unified
policy for Right of Way and different Municipal, Cantonment and Defence
Housing Authorities are charging NOC fees as per their will in complete
disregard of the approved laws of the land. Even in these tough times
when most of the operators are incurring serious losses, instead of get
any subsidy from Government of Pakistan, the licensees are subject to
hefty license and regulatory fees.
The situation demands intervention by nothing less than the Honorable
Prime Minister of Pakistan. The Honorable Prime Minister is holding
series of meetings on the power issues, it is very critical that he must
spare some time and invite the CEO’s of all cellular mobile companies
to listen to their point of view.
These are all multinational companies who have invested billions of
rupees in their telecom infrastructure and deserve some respect from the
government authorities. Unfortunately we have left these strategic
investors at discretion of the
baboossitting at the helm of affairs.
Apparently the companies have also started to lose their patience
which was first witnessed when CEO Telenor publically informed that it
would be very difficult to commit investment in the upcoming 3G auction
given the adverse regulatory and tax regime. The Government needs to
take immediate measures to improve the confidence of the strategic
investors in telecom sector, otherwise any negative sentiment in this
sector will have long lasting and far reaching consequences on the
overall economy of Pakistan.
Author is a Telecom expert and works with a mobile phone company.