|
|
TelecomPlus: How is 3G relevant in countries like Pakistan?
|
|
|
|
Mohsen Tavakol: It is commonly believed that 3G and other mobile broadband
technologies are for rich and developed countries and have little or no
applications in countries like Pakistan. This perception is far from the truth. The
fact is that low income and developing countries are benefiting enormously from
broadband in general and mobile broadband in particular. Various studies show
that there is a direct positive linkage between broadband penetration and
development indices of developing countries, such as GDP. Since fixed
broadband technologies are expensive and much slower to rollout compared to
the mobile broadband, the 3G and other mobile broadband technologies
become ever more relevant.
In some ways mobile broadband technologies are even more relevant to
developing countries such as Pakistan than to developed countries. The reach
of primary, secondary and tertiary education is extended many times through
mEducation infrastructure, as is the case with mHealth, both of which are
enabled by mobile broadband technologies such as 3G and beyond.
Mobile broadband brings premium services to far flung and remote populations
which they never had before. It raises the living standards of populations with
such services as mHealth, mEducation, mGovernance and more. I must also add
that the mobile broadband technologies are opening the doors for new business
verticals, which we haven’t even visualized today in the form of M2M [Machine to
Machine] communications. Such technologies are bound to revolutionize the way
we live and do business in modern industrial and agrarian societies. These
benefits have been demonstrated in numerous countries and proved by various
independent studies.
How can operators justify the expenditure, especially under the
prevailing circumstances?
Operators are having a tough time in Pakistan with high and ever rising OPEX,
declining revenues on voice and a tough operating environment. They need new
revenue streams which can be enabled by mobile broadband technologies such
as 3G. The new revenue streams will help the industry, right from the consumer
to the vendors and it will result in higher tax revenues for the government as well.
However, to achieve this, the government has to find a way to license 3G in the
best and fairest way possible so as to minimize the upfront impact of the license
fees and help maximize the penetration of mobile broadband in the country. This
will be for the good of the country and the people of Pakistan. The operators will
have to make significant investment in 3G infrastructure on top of the license
fee. Therefore, a lot of creativity and work needs to go in this direction from all
the stakeholders and all license fee options should be explored such as deferred
payment, pay-as-you-grow and even revenue-sharing models.
As I mentioned, the two main problems of the operators in Pakistan are OPEX
and declining revenues. The first one is getting adequate attention from all the
operators. However, the second one needs a lot more attention and steps
should be taken to avoid any further erosion in revenues through continuing
price wars. If the need be, the government can legislate to stop this erosion,
which threatens the viability of the telecommunications industry in Pakistan.
These factors are keeping the Pakistan Telecom Industry behind other countries
in that sense.
Why the introduction of 3G in Europe was so disappointing initially?
3G was introduced in Europe in the early part of the last decade when the
technology was new and the economies of scale on the infrastructure and
handset side were not available. Ten years later, 3G is a mature albeit still
evolving technology. The infrastructure costs have come down tremendously as
have the handset costs. The number of services available on broadband, more
specifically, mobile broadband (such as social networking) have revolutionized
the use of 3G infrastructure in recent years. The biggest fillip to the use of
mobile broadband has been the advent of the smartphone, which has changed
the way we use mobile broadband. It has resulted in tremendous increase in
data consumption and as a consequence, increased the revenues of the
operators significantly.
Another significant fact which crippled the adoption of 3G in Europe was the
extremely high license fee, which the governments initially imposed on the
operators. This crippled the business case for the early European 3G operators.
However, the governments have since realized that the viability of the industry
needs to be balanced against the upfront license fee expectations.
The lesson is that the mistakes of the European 3G experience should not be
repeated. We must also learn from the enormous success of 3G in Europe, Asia
and America since then. I must add that countries at or below Pakistan's
educational and prosperity levels have adopted mobile broadband and are
benefiting enormously from it.
How can such problems be avoided now?
Some of the problems faced by the early 3G adopters in Europe have totally
disappeared, such as high infrastructure and handset costs and lack of sellable
and user-friendly services. The other problems such as the ways to sell 3G
services and how to design cost efficient 3G networks are well understood by
leading vendors like Ericsson as we have always been the company to lead the
way in mobile broadband, especially in 3G. Most of the operators offering 3G
services successfully, whether in America, Asia, Europe or Africa, have Ericsson
as their partner to assist them overcom such obstacles. This is not a coincidence
as nobody understands how to deploy and then sell 3G to the end-user as much
as Ericsson does. We make sure that we pass the benefits of that knowledge on
to our customers.
Is 3G essential for wireless broadband or are there other options also?
Mobile broadband can be enabled through a number of technologies such as
3G, LTE, and CDMA 2000 as opposed to niche fixed broadband technologies
such as WiMax. However, considering the timing, the ecosystem, infrastructure
costs and the requirements in Pakistan, the most effective way to enable mobile
broadband is through 3G. Other options are available, but are deficient in any
one or all of the aforementioned aspects. So, to summarize, the way to mobile
broadband in Pakistan today is through 3G.
Why 3G and mHealth are particularly popular in Africa?
In most parts of the developing world, the population to doctor ratio is skewed
heavily towards populations in need of medical care. This ratio can be improved
significantly through services such as mHealth. This is exactly what has
happened in Africa.
Services such as mHealth are enabled on 3G and other mobile broadband
infrastructure, which brings access to not only basic services, but also advanced
services to populations in remote and underdeveloped areas. This is nothing but
good news for all the stakeholders i.e. the end-users can enjoy the services that
improve their lives at an acceptable cost, the insurance companies and medical
services providers decrease their costs while increasing efficiency as well as
increasing revenues, the operators can enjoy increased revenue through new
revenue streams enabled by services such as mHealth. Also, the government
increases its tax revenue as the infrastructure and solution suppliers sustain and
develop the industry further. Everybody wins! This success is not only
encouraging, it is the tip of the iceberg as more and more services will be
enabled by mobile broadband.
Which other apps, besides mHealth strengthen the business case for
3G?
You see, the business case for 3G is not just in mHealth. It is in a variety of
services such as social networking, smartphones, mEducation and services
which will develop on the smart bit pipe that is provided by mobile broadband.
What is important to note is that 3G is a viable business proposition. If it is done
right, it can add a lot of value to an operator’s value proposition. That’s where
Ericsson brings value as we not only know how to develop and deploy 3G, but
also how to do it right and to generate revenue out of it. Our dialogues with our
customers go beyond engineering, 3G equipment and networks. We talk about
focusing on the bigger picture of what a 3G network can do for the nation while
generating more revenue for our customers. So, we make 3G a viable business
proposition for our customers, where mHealth is just one small part of it.
What is the downside of delaying 3G any further?
The time for 3G is now. If it’s delayed any further, the value proposition for 3G
for all the stakeholders in the mix will erode, which is bad news for the
telecommunications industry in Pakistan and the country as a whole. However,
as with anything in life, the introduction of 3G needs to be thought through to
make it profitable and viable for all the stakeholders. No stakeholder’s interest
shall be neglected and left behind, as that will backfire on the industry.
Do you see some role of USF in promoting 3G in Pakistan?
Yes, definitely! The business model of USF can be used to introduce mobile
broadband in remote areas, which otherwise might not be considered viable for
investments in mobile broadband infrastructure by the mobile operators.
Is the Ericsson mHealth Solution available for 2G or 2.5G networks?
mHealth solutions need throughputs which are best enabled through mobile
broadband technologies such as 3G and beyond. The impact of mHealth on the
society, if the mHealth is enabled on older technologies will be insufficient and
limited.
How do you tackle legacy issues while migrating to 3G?
There are numerous options available to tackle the introduction of 3G in legacy
networks. They are specific to each network but are well understood and a
solution is there for each network in a specific set of conditions.
Do all the available flavors of 3G offer migration path to LTE, HSPA+, etc?
There are two major tracks of mobile services evolution in the world. They are
3GPP and 3GPP2. Most of the operators across the globe follow the 3GPP track,
but some others such as the ones in the US follow 3GPP2. Both evolution tracks
converge on LTE, whereas only the 3GPP track goes through the HSPA+ stage.
Both tracks are supported and offered by Ericsson.
Anything else you would like to share?
Well, something interesting to note and draw parallels with is that when electricity
was introduced in the 19th century, its first application was lighting street lamps.
Nobody imagined that it would power new products and services such as the
ones we see today. Nobody foresaw the kind of impact electricity would have on
societies and living standards which it has had. We are seeing the same thing in
the mobile broadband phenomenon. It is anchored in most of the countries and
is now enabling services and business models which were never foreseen.
The mobile broadband wave is building up in the rest of the world to deliver
known and to-be-known services and business models. We in Pakistan risk
missing this wave if we wait any further in introducing 3G.
|
|
|
|
|
