KARACHI, Jan 15: As the entry of two new cell phone operators draws near, four current market players have geared up their investment plans in order to lure consumers who are benefiting from the ongoing competition between the existing players.
Mobilink, Ufone, Paktel and Instaphone have planned to invest over $700 million in 2005 in order to increase the subscribers' base up to 15 million by the end of this year, from the current eight million users.
These companies have also expedited their endeavours to slash call rates, which market pundits believe is the only tool to attract a sizable number of subscribers. Dawn has talked to the four existing players of cell phone who unveil their plans for 2005.
Director Marketing, Mobilink, Bilal Munir Sheikh, told Dawn from Islamabad that his company had planned over $410 million investment in 2005. The company has invested $750 million to date. The company has direct employment of 1,800 and created 10,000 indirect employment's.
In reply to a query that Mobilink's monopoly will come to an end with the entry of two new operators this year, he said there had really never been a monopoly. "Consumers have always had a choice to choose between the four operators."
He said that Mobilink, having a 63-per cent market share, was expected to maintain its market leadership because of its extensive coverage and customer service. He said the company did not feel threatened with the entry of wireless local loop (WLL).
"The WLL is a different segment from cellular service and it is not viewed as a direct threat to cellular operators. It is actually a replacement of fixed line, and according to PTA policy guidelines, the WLL could be operated on fixed wireless terminals only," Mr Sheikh added.
"Given that the local cellular market is very competitive -- with new players on the horizon - Mobilink does not feel that the WLL will pose a significant threat to the industry. Even so we are cognizant of the emerging situation in this area and will be in a position to deal with any possible scenarios," he said.
President and Chief Executive Officer, Pak Telecom Mobile Limited, operator of state-owned Ufone, Babar Khan, said the company, which had invested more than $350 million so far, was currently planning the expansion of phase-IV valuing at $166 million.
"This will extend the coverage to 200 new cities, creating additional capacity of 2.5 million customers in 2005. The subscribers' base, which currently stands at 1.9 million, is expected to touch three million in the next six months, he said.
On the entry of two new cell phone players, he said it would benefit the consumers, expand the market and open new options to the users. He said that Ufone had signed an interconnect agreement with Telenor and Warid.
He is of the view that Pakistani cell phone market will expand between 30 and 40 million in the next five years. "There is a room to grow for all cellular operators, incumbents and new entrants," Mr Khan said.
On the launch of WLL operations by two companies, he said globally the WLL and cellular adopted different strategies. "The WLL acts more like a limited mobility wireless based on a within cell site mobility whereas cellular has unlimited mobility across its network."
He said there would be certain areas of overlap as has been witnessed in many markets. The WLL and cellular tread on different strategies and market segments. Chief Executive Officer, Paktel Limited, Xavier Rocoplan, said that his company planned to invest $75 million in 2005 after investing $99 million to date.
"The company has so far created an estimated 234 direct and 1,830 indirect employment's and planned to add another 10 per cent workforce in 2005." Paktel has currently seven per cent market share on AMPS/ TDMA and GSM, he said, adding that the company aims at netting one million customers before the end of 2005. He anticipates that mobile phone users' number will reach 15 million in 2005.
Mr Rocoplan says now the WLL as fixed line operators is certainly positive, but it means that no mobility is offered at all (a wireless fixed line in fact, no mobility), which is technically easy to achieve.
He said that the regulator needed to enforce the existing regulation. "Paktel is watching new WLL operators and the way the Pakistan Telecommunication Authority handles it."
Chief Executive Officer, Pakcom, the operator of Insta phone, Ian Williams, said the company planned to invest $50 million in 2005. "The company has so far invested $106 million in Pakistan."
He sees the entry of Telenor and Warid as a welcome sign for mobile phone lovers. "The 2005 will be a year of real competition. The monopoly of any operator will come to an end.
Mr Williams said his company, which had current staff of 259 and 1,671 associated contractors, enjoyed a seven per cent market share on old technology. "We will be investing in new the CDMA network this year and will have an additional 500,000 subscribers within 2005," he said, forecasting total cell phone subscribers base of 14 million by 2005.
