|
When Zong entered the cellular market of Pakistan, power
load shedding was taking its toll, energy crisis was getting
serious and Law and Order situation was far from being
satisfactory. These issues were not so serious in the
formative days of the other four operators who now had
pretty well established operations throughout the country.
On top of that, Zong had to shoulder the leaky baggage of
Millicom and Paktel. Mr. Zafar Usmani, COO Zong shares
his views with TelecomPlus
|
|
|
|
TelecomPlus: How did you get into Telecom Business?
Zafar Usmani: I have been in Telecom since 1991. I joined
Paktel as Senior Marketing Executive and in 1994 became the
Chief Operating Officer of the company. I stayed in Paktel till
1997 and then I moved to Oil Industry. I came back to Telecom in
2007.
How do you recall the early days of Zong?
When China Mobile came to Pakistan in 2007 it had the vision of
becoming the number three if not the number two Player in
Pakistan in the first five years of operation after launch. We were
the last entrant in the Pakistan telecom market and had to
compete with well entrenched competitors. We hardly had 1000
cell sites and had to shoulder the baggage of Millicom and
Paktel brand, a company which did nothing in the last 5-6 years
in Pakistan. So it was a huge challenge for China Mobile to make
such a dysfunctional company a success. It took us about 15
months to have a reasonable coverage in Pakistan. The vision
was very clear. We wanted to be No. 2 or No. 3 operator in
Pakistan and No.1 in Customer Care with a coverage that would
be better than the best in the industry.
When China Mobile came to Pakistan, it never was smooth
sailing. There were law & order problems, security problems,
power shortage and extreme difficulties in getting sites. Even
today, we have more than 300 sites pending since 2007.
Nonetheless, we worked hard and brought innovation in our
network. We are bringing in solar sites and aim to have at least
600 sites on solar power by the end of 2011. We also expect to
move most of our indoor sites to outdoor to conserve energy.
We are turning the problem of power shortage into an
opportunity through innovation and building efficient network
using most modern technologies. We are on track for our vision,
on our customer services target, on subscriber base target and
on our service standard.
Do you think infrastructure sharing is now picking up in
Pakistan?
When Zong came in 2007, the idea of infrastructure sharing was
taking root and Telenor, Ufone and Warid were very enthusiastic
about it, though Mobilink was reluctant. But today, all the
operators have realized the significance of infrastructure
sharing. Besides cost benefits for the operators, infrastructure
sharing improves our skyline by limiting the number of towers. It
is not just about number of towers, reducing energy and security
costs, it can go to the extent of sharing network and
transmission. Given that the costs of inputs are soaring and
given that industry has no control over those costs, the only way
to reduce expenditure is to cooperate with each other and find
new and better ways of sharing infrastructure. We must continue
to compete on marketing, on customer services and on quality of
service. But we must also cooperate on infrastructure sharing as
that brings down both costs and capital expenditure. This is the
only way to add value to shareholder’s investment in Pakistan
and the sooner the management of all operators understands
this, the better it would be for them.
How do you look at wireless broadband from Pakistan
perspective?
I think wireless broadband is the killer. Out of the 10 million plus
customers that Zong has, there are about 4 million customers
that use Internet services. Clearly the potential is huge. If you
look at wireless data traffic, it is mostly SMS. But with wireless
broadband, it is pictures, data, videos, streaming videos,
eHealth, eLearning, eSecurity, you name it. There is immense
potential. But in Pakistan, having the potential and having the
right environs are two different things. The potential for
broadband is there. It is the vehicle of future growth of our
country’s economy. But we lack the right environs from political,
economic and regulatory perspectives to mobilize this potential.
We have to get our act together on these three to usher in the
wireless broadband revolution.
How should the Regulator go about it?
I feel that instead of talking about 3G, 4G, LTE, etc, we should
be technology neutral. Operators have the licenses; it is
basically the spectrum we are talking about. To have really good
wireless broadband, the operators have to have at least 20
Mega Hertz each to take care of present and future needs. If you
want to have just an OK-sort-of broadband and give about 5-7
Mega Hertz to each operator, you cannot get very far and you
will not be doing justice to the shareholder’s who you are asking
to invest. Your policies should be futuristic rather than short
term, we must look beyond current needs. It is important to look
at what kind of spectrum is needed to really have a true, long
term broadband policy and make that spectrum available. In my
opinion, we should have about 60 Mega Hertz of spectrum
available for the existing operators to meet the demand of real
broadband with a long term roadmap. If this requires re-farming
the frequencies or spectrum, so be it. We must get it right the
first time. The FBR [Federal Board of Revenue] has taken very
commendable steps to facilitate tax returns. But last year a huge
number of tax payers could not file their tax returns online
because the existing infrastructure could not handle the traffic.
We should take steps now to avoid similar bottlenecks in wireless
broadband. We must not forget that broadband applications are
notorious for their insatiable hunger for bandwidth.
If we want to really empower citizens and give them some relief,
we got to have eGovernance so as to bring transparency and
fairness and to do away with human intervention in citizen-
government interactions. But without wireless broadband,
eGovernance cannot take off. Landlines have had negative
growth and the last mile stinks. But given the ubiquity of
handheld devices, it is the wireless broadband that can
miraculously change the scenario for eGovernance and other
Apps.
To what extent illiteracy is a hurdle in bridging the digital
divide?
I think illiteracy is not too big a problem in fight against digital
divide. You have to be innovative to get around the hurdle of
illiteracy. People may be illiterate but they do understand the
language of money. Zong launched Telesims for retailers, which
has a somewhat cumbersome process for a retailer. It has quite
a lengthy process and requires a number of entries that a
retailer has to make. The general thought was that it would not
take off. But we were convinced that if we could show there is
money to be made, retailers would go the extra mile. It happened
exactly the way we expected. We have now more than 80,000
retailers in Pakistan doing our business using the telesim
service. I am sure that if we come up with simple products and
can show our farmers and workers that by using these
applications they can make more money, save money and make
life easier for themselves, they will learn to use the Apps. You
have to be innovative, make your products simple and show
people the benefits.
It is also in the interest of the operators. In view of the shrinking
voice revenues, they have to keep finding new revenue streams
in VAS [Value Added Services]. There simply are no margins left
in voice and I do not see the price wars on voice ending. China
Mobile in its native country has 30% of its revenue coming from
VAS. In Japan one of the operators is getting upto 50% of its
total revenue from VAS. But for us to grow VAS as a significant
revenue contributor, we also have to encourage local content
and service providers . But given the current practice of the
cellular companies, I do not see that happening. The service or
content providers are totally at the mercy of the cellular
operators, they cannot get in without having the right connection
and even if they get in, they get in for peanuts. I personally
believe that this needs to be driver by PTA who should develop
and enforce a policy that forces the operators to inter-connect
with VAS services/content providers.
What can operators do to protect consumers from
swindlers?
All I can say in this respect to the consumers is that be wary of
SMSs from unknown senders. Whenever they get such an SMS
offering prizes or some such luring offer, they should check with
the operator through the nearest office and should not fall for
the trap. In my opinion, policing is not the role of the operators. It
is for PTA or other state entities to take appropriate steps to nab
the culprits. Operators can help by way of raising the awareness
level of the consumers through media and SMSs to the
consumers.
What has been the impact of number portability?
MNP [mobile number portability] is a good service as it allows a
customer to port out if s/he is not satisfied with the services of
his operator. In 2007 when we were discussing the size of market
available to Zong, the industry had about 90 million customers –
we saw this as an opportunity for us to attract high value
customers from the competition through excellent customer
services, good packaging and attractive VAS. And it turned out
to be so. Since 2007, more than 1.1 million customers have
ported in to Zong. I guess there are only two operators who have
net gain, Telenor and Zong. We are probably number one in the
net gain as a result of MNP.
Are you satisfied with the QoS surveys conducted by PTA?
PTA has done two QoS [Quality of Service] surveys in the last
four years. In both the cases there was lots of confusion
regarding the quality of QoS surveys. The industry questioning
the manner and technology of surveys and PTA defending its
methodology. I think neither was right and neither was wrong.
The QoS should be a joint effort. We should have one standard
for QoS testing and that standard should be adopted both, by
PTA and the operators.
While doing these surveys, we must also bear in mind various
issues that affect the QoS drasticall; Power shortage, fuel
problems, difficulties in getting new site, security, etc. When you
have power outages from 8 hours to 16 hours, how can you talk
of maintaining quality? There is also the issue of interference.
We get interference in Karachi from across the border. Same is
the case in Lahore, Sahiwal, Sialkot, etc. Then there are
jammers in mosques, banks, jails, etc. That also affects quality of
service. The RoI [Right of Way] issues continue to haunt the
Industry. We have been raising RoW issues with the Ministry of
IT&T for a long time but problems still persist. On top of that,
there is the high handedness of landlords where we put our
sites. They want to double the rent every year knowing that we
are stuck. They shut the sites to enforce their demands. If their
cheque is delayed for some reason, or even by their own
mistake, they shut down the site. Given these circumstances,
how can you ensure quality and how can anyone claim that the
QoS testing was fair and should be acceptable for all?
Anything you would like to add?
I think we need to have a totally different approach for utilizing
the USF [Universal Service Fund]. Currently the mechanism is
that the subsidy is given to the lowest bidder for taking basic
connectivity to the un-served or under-served areas. This fund
has 47 billion rupees and should be used for the growth of
Telecom Industry. In my opinion, USF should build basic
telephony infrastructure in rural areas on its own. They should
also build broadband infrastructure in top 10 metros. They can
then offer the infrastructure to the existing operators on rental
basis. This will take the Capex burden off the operators, reduce
cost of transmission and also save their time building that
infrastructure. However, this is not easy. It requires a total relook
of the USF policy and a lot of debate involving all stakeholders. If
we do this, USFC will become an infrastructure providing
company that would help for the growth of the Telecom services
in the rural areas and broadband services in the metros. It could
probably operate as a non-profit organization, investing their
profit back into the industry.
Is there any justification for collecting this fund if it
cannot be utilized?
Absolutely not. The Rs.47 billion fund is sitting idle. The way it
has been utilized and the expected service availability in the un-
served areas needs to be thoroughly audited to test that the
fund really delivered what it was expected to. But I don’t think it
has done so. We need to revisit the policy and also find better
ways of using the Fund for the growth of the telecom services
and consequently for the betterment of the economy and the
society.
|
|
|
|
