ISLAMABAD, Feb 9: The Pakistan Telecommunication Company Limited (PTCL) on Monday launched here a wireless local loop project to provide new telephone connections in remote areas of the country.

The PTCL has entered into a $500 million contract with a Chinese firm, Huawei Technologies, to implement the plan. The agreement between the two parties was signed at a ceremony held at the PTCL headquarters. Information Technology Minister Awais Ahmed Khan Leghari was also present on the occasion.

Muhammad Sarwar, PTCL senior vice-president technical, represented the company while Mr Wang We Jen, CEO Huawei Technologies, signed the pact on behalf of his company.

The wireless local loop is a code direct multiplier access based technology almost similar to a mobile cellular phones system. An informed source told Dawn that the new system would provide telephone access to 127 cities in the areas where 60 to 70 per cent people never had access to any telecom connectivity.

The regions include cities of the interiors of Sindh and Balochistan, like Turbat, Pasni, Gwadar, Chagi, rural areas of Multan, Dera Ghazi Khan, Bahawalpur, Rahim Yar Khan, Central Punjab, Dera Ismail Khan, Kohat and Bannu division and the Federally Administered Tribal Areas (Fata).

Speaking on the occasion, Awais Leghari said that with an investment of just over half a billion rupees, more than 200,000 new telephone connections would be provided to the inhabitants of rural areas. This development, he added, was in line with the directions of Prime Minister Zafarullah Jamali and the cabinet to provide telephone coverage to 50 per cent of the rural areas by the end of 2004.

In this regard, he said, the PTCL would reduce by 5 to 10 times the per line cost and timescale of deployment and one wireless base station of 450 Mhz would cover a radius of 20 to 25km as opposed to an equivalent distance of only 5km served by the fixed line technology. However, he said, the PTCL had been restricted to areas where the teledensity was very low.

Mr Leghari expressed concern over the poor teledensity in the country and called for its improvement. He attributed this state of affairs in the telecommunications to cost and labour and to the digital divide between the developed and the developing world.

"I would also emphasize that while developing a business plan for offering these connections to the general public and while considering the financial mechanism for the provision of terminal units to the people, it must be ensured that the common man is not unduly burdened and the project retains the spirit of public welfare in which it has been conceived," the minister said.

The minister said the new cellular policy which the cabinet had approved would also enhance competition among mobile telephone operators, ensure broad coverage at affordable prices, increase teledensity, choice of service and private investment in the country.

Earlier, the charge d'affaires of China, Song De Heng, said: "China and Pakistan go together in building a strong fraternal relationship in terms of synchronic development between their organizations." He said the Huawei Technologies had shown good performance in fostering partnership with the PTCL for vital telecom projects during the last 2-3 years.