ISLAMABAD: While debate on the introduction of next generation mobile phone technology is centred on what the government stands to gain from the auction of licences, few realise what the advent of 3G and 4G will mean for consumers in Pakistan, who currently enjoy connectivity at some of the lowest rates in the world.

The next-generation technology is not cheap and cellular providers will hike tariffs once 3G and 4G networks are up and running. However, amid fierce competition, none of the bidders is talking about the expected cost to customers.

But nearly all operators agree that for those who opt-in for the 3G, 4G experience, phone bills will go up. For example, it costs Rs17-20 to download 1MB worth of data on the current 2G networks.

While the experience will be faster, costs for downloading the same amount of data on a 3G network will be nearly three times greater.

Telecom experts say that cellular service providers will either have to take a hit on their profits or pass on the added cost to consumers. “Of course, they will have to strike a balance. It may be prudent to cut freebies and discounts in exchange for better service,” a telecom professional told Dawn.

Convener of the Internet Service Providers Association of Pakistan (Ispak) Wahaj-us-Siraj said the mobile broadband services would cost far more than those currently available — DSL, fibre-optic or Wimax. The amount of data that could be transferred over the network would also be limited.

A source in one of the mobile companies said initially the 3G and 4G services might be offered to corporate clients and post-paid customers first. Prepaid customers would be offered the facility in the second phase.

Coverage and timelines

For consumers, the auction will not immediately translate into the advent of 3G connectivity on their mobile phones. In fact, the timeframe agreed upon between the Pakistan Telecommunication Authority (PTA) and mobile operators envisions 3G roll out within six months of the auction.

In the first phase, services will be available in Islamabad, Karachi, Lahore, Peshawar and Quetta and later on in other cities from each of the four provinces.

The second phase, which will start a year and a half after the auction, envisions the expansion of 3G services to about 80 more cities. In the third phase, which will begin about four years from now, 90 per cent of all tehsil headquarters will have access to 3G services.

4G, on the other hand, is expected to roll out in fifteen cities nearly a year after the auction. It will expand coverage to another 80 cities two and a half years down the line. More remote areas will have to wait nearly five years for 4G to become operational.

One of the major developments associated with this next generation technology is the improvement of internet penetration in the rural areas of the country. Next door in Afghanistan, 3G internet services connect its most remote parts to the rest of the world. But in Pakistan, that will not happen for at least four years.

A PTA official told Dawn there were security concerns regarding the expansion of 3G and 4G services to the more remote parts of the country, adding that most service providers would need some time to develop technical infrastructure in such areas.

Govt in the green

The bidding on April 23 will determine how much goes into the government kitty on account of the licences. But the more the government makes from the auction, the higher the tariffs are expected to be. Finance Minister Ishaq Dar estimated that the auction would fetch the government $1.3 billion.

The top four mobile operators will pay nearly 50 per cent of their bid price upfront over the next couple of months, which will help the government pay its bills.