Should Pakistan Leapfrog (the Developed World) in Broadband Penetration?

1. Should Pakistan Leapfrog (the Developed World) in Broadband Penetration? Vision of the Government Noor-ud Din Baqai Member (Telecom) MoITT

2. Broadband for National Economic Development • Broadband can help accelerate socio-economic development by efficient and cost effective access to information • Broadband is an accelerator of economic development because: • easy and cost effective access provides direct and indirect benefits ranging from • increased productivity • Creativity in job performance • more knowledge economy jobs • bundling of new services, higher efficiency gains • computer and network-related equipment uptake • Enhancement in skill base • e-business takeoffs, and • Other ICT related services

3. Policy Overview • Fixed, Cellular Mobile policies delivered objectives of rate reduction, coverage and affordability • Broadband Policy 2004 defines Broadband as: • ‘Always on internet connection with a minimum download speed of 128 kbps connectivity’ (now redefined in framework) • All telecom policies are neutral to choice of technologies • Penetration target set as per policy: • 200,000 subscribers by 2007 (and 1% by 2010) • Policy Vis-à-Vis Implementation: • After 3 years we are only at half way mark of the expected goal • Total subscribers approx 135,000 • At best 20,000 are wireless subscribers • Overall penetration: • Karachi is 0.319% • Lahore is 0.48 % • Islamabad 0.6% • The situation in rest of country is more poor. Smaller cities are showing 0% penetration or second degree of decimal on maximum at best

4. Policy Stocktaking • Critical Mass of fixed line infrastructure achieved: • 3 undersea cables, Fiber connectivity up to 1200 cities, 4 Fiber optic backbone networks • Substantial improvement in customer choices, prices and reach • Rapid development of Cellular Mobile Sector • Reach and penetration of upto + 75% population (80.3 m subscribers) 70% geographic coverage • Network expansion and roll-out on accelerated pace • Essential infrastructure to help take-off broadband is in place Can Broadband Proliferation take-off from the foundations of current infrastructure?

5. Broadband Market Share in Pakistan • Most of Existing Broadband infrastructure is mainly owned by the incumbent’s local loop copper just 3.5 telephones per 100 persons & reach of fibre. • Broadband coverage by all fixed line providers (DSL, Coax, FTC) including incumbent in past 3 years of policy covers less than 5% of geographic area of Pakistan • Penetration including incumbent on copper, Coax, FTC today is in the range of between 80,000 to 85,000 customers at best • Besides PTCL and NTC, Wateen, Linkdot, WOL,World Call Brain-net are few Broadband Service Provider owning some infrastructure

6. World Summit on Information Society (WSIS) Indicators • Digital Opportunity Index (DOI) • Standard tool that governments, operators, development agencies etc use to measure the digital divide and compare ICT performance within and across countries constitutes of: • Opportunity Index • Infrastructure Index, and • Utilization Index • The ICT Opportunity Index (ICT-OI) • Stronger focus on traditional new ICTs, such as fixed-lines, wireless and televisions, as well as on measures of literacy and educational achievement constitutes of: • Network index • Skills index • Uptake index, and • Intensity index

7. WSIS Indicators Analysis • Pakistan’s rank in both these indices places it in the low-average category of almost 181 countries at ranks 127 and 139 in DOI and ICT-OI respectively • Utilization Index, which reflects progress in more advanced technologies for broadband access, is extremely poor within the DOI at 0.03 • Index suggests: • no commendable growth in e-markets • low proportion of Internet, mobile subscriptions that have migrated to high-speed broadband access is also low. This low figure is especially in comparison to regional countries such as Malaysia, China, Thailand and Philippines, who have done much better • Within the ICT-OI, Pakistan’s Networks (35.5) and Intensity (72.11) sub-indices show that the country is lagging behind in broadband uptake & penetration. The analysis is further strengthened by the dismal value of our Skills Index, which is even lower than Bangladesh and Nepal (55.3). • Infrastructure Index within the DOI of Pakistan (0.07), although better than India, is comparatively lower than that Korea, Egypt, Thailand, Iran and Indonesia. Can we overcome these fundamental barriers to promote broadband in Pakistan?

8. Constraints in Broadband Proliferation • Demand Side: • Affordability (prices) • Per capita Income of a Pakistani is $925. High inflation and spending patterns are important considerations • Skill and Uptake • Low Literacy rate • Availability of quality human resource, intellectual, social capital and societal capacity. • Poor availability of Local content • Poor availability of quality and need-based e-services • Supply Side: • Non-availability of dependable power supply • Relevant wireless coverage and spectrum • Quality of Access • Low Corporate absorption strength Do we have enough demand pull and supply push to proliferate broadband beyond developed countries?

9. Opportunities • Critical Mass of Infrastructure available • Reach of high capacity fiber upto 45% Tehsils. • Very good coverage of above 80 % • Universal Service Fund Co (USF) taking infrastructure to rural and un-served areas • R&D Fund Co working towards improvement of intellectual capital to create critical mass of R&D within the country Can we capitalize on these opportunities and leapfrog the developed world?

10. Current Global Broadband Scenario • Today, there are about 400 million broadband subscribers worldwide and half of them are using fixed line broadband including copper twisted pair, coax or fiber to home etc. • Best performing economies where fixed teledensity is higher, copper is contributing only 35- 40% of their total market. • Rest of the market is on Wireless Broadband solutions including Wimax and 3Gbs & beyond (like LTE), HSPA etc. Are we in-sync with the current global trends?

11. Future Trends • Broadband will be an individual need • Fixed broadband Service and Wireless broadband will co-exist. • Wireless may catch up at a faster pace • After 2010, the global broadband user number would exceed the 1 billion mark with 6 billion population. This means that every one person out of 6 would be an individual broadband user • In Pakistan, broadband delivery in mobile sector is hardly moving from low speed data rate to high speed data rate delivery systems like HSPA, WIMAX (various segments) and other wireless options. Economic uptake can lead to 3/4 Cellular Broad-Band. • Today there are about 400 million broadband subscribers worldwide and among them nearly 160 million are using mobile broadband Are we on-track to meet challenges of upcoming future trends?

12. Importance of State Instrument • The likes of Malaysia, Korea, Dubai,Singapur and USA took forward their ‘connectivity drive’ through the help of the state mechanism • Dubai Internet City was set up by Government of Dubai to provide free economic zone and strategic base for companied targeting emerging markets • Malaysia’s Multimedia Supper Corridor Programme. Development of a dedicated ‘intelligent city’ Cyberjaya • Korean Agency for Digital Opportunity and Promotion (KADO) • Some Key Programmes & Projects • US Department of Agriculture Programe • Australian Broadband Guarantee programme 2007 • National Satellite Initiative 2003 Canada • Columbian Government’s broadband connectivity drive • Brazilian Government’s E-government - Services for Citizens programme

13. Broadband Vision by 2010 • Utilize USF Platform to promote Broadband under USF Co Subsidy Framework • Concentrated USF efforts to kick start and proliferate broadband penetration. (Uganda, Mongolia, Burkina Faso and Malawi are already utilizing USF for broadband) • With the help of Govt/USF operator efforts, the target 1.6M may be achieved till 2010 (including Broadband for schools, colleges, institutions etc) and 5% penetration by 2015 • Overcoming the initial delays USF Co would be on accelerated broadband pace beyond 2010. Pakistan may assume a very good position in the global ICT setup by 2015 • Sustained efforts will improve country ranking vis-à-vis WSIS indicators from Low to Medium average country. • International IP bandwidth consumption may rise from current 7Gbps to 30-35 Gbps by 2010 and over 100 Gbps (2015) • Low income society segment may also benefit once affordable broadband is ensured Is this Vision realizable or optimistic?

14. Projected Individual Broadband Users till 2010-11

15. Key Underpinnings of Framework • Consistency with telecom policies • Adherence to technology-neutrality • Focus on affordability parameters • Facilitation of market development through subsidy plan • Assurance of complete fairness and transparency • All inclusive framework • Continuity of policy adopted for 14 LL regions, • LDI and integrated licenses in broadband framework • Benchmark availability of at least three BSP’s in each region

16. Conclusions • The Future is High Speed Broadband. • Focus would be on all Fixed and Wireless Technologies. • Government is fully Cognizant of the Trends • Revised implementation Framework has been developed through stakeholder consultation • Sensitivity, business and policy options analysis already conducted • Study has been circulated and accommodates all options

17. ShouldPakistan Leapfrog the Developed World in Broadband penetration? • There is no definite answer • Challenge indeed exists • However, we cannot leapfrog in a holistic fashion • Must identify our niche and segments in which we can leapfrog