Aasif Inam Director Tariff

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Aasif InamDirector (Tariff Interconnect)Pakis
tan Telecommunication AuthorityPakistan
Current Situation of Access USO in Pakistan
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Presentation Scheme

• Concept
• Pakistan Overview
• The Deregulation of Telecommunication Sector
• Universal Service Obligation

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USO Concept
A mechanism for providing affordable telecom fac
ilities
to all classes of the society
regardless of the area of their inhabitation
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Who is responsible
USO is a welfare responsibility of the State
USO is driven by Public policy Objective
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Access or Service
Universal Access
Universal Service
Limited resources Defined in terms of incr
eased access only
State is Obliged to provide service to its Citi
zens regardless
of area of inhabitation
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Factors influencing USO
Government Goals priorities
Physical Characteristics of Country
USO
Stage of Economic Development
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Access Universal Service
Pakistan Overview
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Telecom Sector Overview

• Fixed Line Segment (Teledensity 2.9)
• PTCL, NTC
• Cellular Mobile Segment (Mobile Density 2.3 )
• 4 Operators 3.4 M users
• Card Payphone
• Over 177 operators (150,000 PCO booths)
• Internet DNOPs
• More than 70 active ISPs(Access in over 1800
  cities towns)
  
• GMPCS
• One license issued

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Realities

• Low teledensity and widely dispersed population
  (Rural teledensity 0.77 urban teledensity 6.2)
  
• High costs of telephone service in far flung
  areas
  
• Limited infrastructure development
• Rural primarily agricultural developing economy
• Population of 150 m
• GDP per capita USD 492
• Population below poverty line 31

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State of Telecommunication in Villages
Villages
Without Telecom
Rural Teledensity

• Punjab - 25875 16584 0.90
• Sindh - 5871 2650 0.35
• NWFP/FATA - 9933 7200 1.19
• Balochistan - 6557
  4931 0.46
  
• Federal Area - 132 - -
• Total - 48368 31365 0.77
• 65 villages without access to telecommunication
  facilities.
  

Having population less than 5000
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Notable Steps To Enhance ICT

• Internet customer are able to make a flat rate
  call to connect to ISPs (131 service)
  
• Individual / companies allowed to to use mobile
  phones as PCOs where PSTN is not available
  
• Lower bandwidth charges for Software Exporters,
  Accredited Universities, Educational Institutions
  and Teaching Hospitals
  
• Bandwidth charges USD 5400 2MB Connectivity

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Access Through Payphones

• Individuals of Low-Income Group.
• Individuals with limited capital.
• Unemployed and less-fortunate.
• Small business who would like to supplement their
  existing income.
  
• Organizations promoting public private
  partnerships, e.g. rural health centers.

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The Community Payphone Concept
The Payphone Sector

• Supervised Payphone Concept
• In this business model, unlike the unattended
  business model, another layer of distribution is
  added (franchisee), which helps in improving the
  maintenance of the payphones
• The franchisee also takes care of the problem of
  low literacy among consumers, who only have to go
  to the franchisee to make a phone call
  
• The supervised payphone also helps in improving
  revenues through better service to the consumers
  and reduced costs due to higher capacity
  utilization and lower contingency costs

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Card Payphones/Growth of PCOs
No. of PCOs
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The Rural Wireless Market
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WLL based Payphone Services

• CDMA-2000 technology used for Wireless Local
  Loop
  
• Uses Desktop Phones
• Franchisees gets Prepaid Wireless Service
• A large number of villages and remote areas to be
  served
  
• In a lot of places, it is the only phone
  available to people

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Current Status

• Rolling out CDMA-2000 network with an ambitious
  target of covering 83 of the population
  
• More than 110 BTS installed in four provinces
  with capacity provisioning for 500k subs
  
• By Q1 2004, 5 switches and 300 Cell Sites will be
  operational will be the largest coverage area
  for any wireless network in Pakistan
  
• Emphasis on Rural/ Suburban areas
• Affordable prices - markup on PTCL rate

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Capability

• WLL is capable of meeting un-serviced demand in
  the coverage area to all types of customers
  
• Nationwide Service
• Network is set to play a major role in enhancing
  telecom penetration in the country
  

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Review of Fixed Line Cellular Growth
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Growth in Fixed Line Telephones
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Growth of Mobile Subscribers
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PTCL Tariff Re-balancing Connection Charges
(1996-2004)
Rs.
Rs.
Exchg. Rate US Rs. 57
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PTCL Tariff Re-balancing Monthly Line Rent
(1996 2004)
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PTCL Tariff Re-BalancingLocal Call Charges / 5
Min. (1996 2004)

Rs
for Off-peak Rs. 2.01 per ten min.
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PTCL Tariff Re-balancingNWD Call Charges / Min.
(1996 2004)
Rs
Years
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Affordability of Telecom Services
THE CAPITAL DIVIDE
BRIDGING REQUIREMENT
THE DIGITAL DIVIDE
7 to 8 Million Connections
Affordability Threshold
142 million People
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De-Regulation Policy Major Policy Objectives

• Increase choice for customers at competitive and
  affordable rates
  
• Promote infrastructure development Teledensity
• Increase private investment
• Expansion of telecom infrastructure to un/under
  served areas
  
• The Mobile Cellular policy includes obligation to
  roll out coverage to at least 70 of Tehsil
  headquarters in four years with a minimum of 10
  Tehsil coverage in all the provinces.

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Telecom Deregulation Universal Service

• 1.5 universal service charge on licensed basic
  service operators
  
• PTCL to install 83,000 lines/year in tier 2 and
  tier 3 areas by end of 2008.
  
• Access Promotion Contribution (APC)
• The Mobile Cellular policy includes obligation to
  roll out coverage to at least 70 of Tehsil
  headquarters in four years with a minimum of 10
  Tehsil coverage in all the provinces.

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Access Promotion Contribution
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Access Promotion Contribution

• At present, net incoming international traffic
  generates a financial premium over the cost of
  conveying and terminating the traffic into
  Pakistan. Although historically this premium has
  been large, it has been steadily reducing,
  in-line with global trends.

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Access Promotion Contribution

• As long as the premium continues to exist, a
  reasonable portion of the premium is proposed to
  be used to promote infrastructure expansion. The
  portion of the premium applied to promoting
  infrastructure expansion is referred to as the
  Access Promotion Contribution (APC).
• The PTA will regulate the APC Framework

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Universal Service Fund (USF)
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Universal Service Fund

• The Government recognizes that even with market
  liberalization, and under strict commercial
  considerations, there may exist certain
  populations or geographic areas that would remain
  un-served or relatively underserved.
• The Governments Universal Service policy is
  designed to ensure that these designated
  populations and geographic areas receive adequate
  service in a sustainable manner as resources
  permit.

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Universal Service Fund

• The main financing mechanism to promote Universal
  Service in Pakistan will be the USF. The precise
  form and working of USF including USF rules will
  be determined by PTA with the approval of the
  Government.
• The USF will be predominantly financed by
  revenues collected from all telecommunication
  licensees through a Universal Service Fund charge
  (the USF Charge).
• The USF may also receive contributions from the
  Government, and also funding from international
  or bilateral development agencies.

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Conclusion
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