Is The Pakistani Telecom Sector Really Saturated?
I’m sure you must have heard this comment or question many times in the recent past. I’ve seen different telecom professionals answer it differently based on their own experiences and/or perceptions. My take on it is a bit different. I am of the opinion that the question is wrong, or, at least, being asked at the wrong time. It’s a bit like your whole building is on fire and you are asking or complaining why the damn phone has stopped working.
Let me elaborate on my statement above by doing a bit of a reality check. As you are probably aware, we are currently in a global economic slowdown (some call it a recession). With rising international oil prices coupled with consumer price inflation, we expect to see consumers with significantly reduced spending power – i.e., no more fancy cars, eating out at restaurants, buying the latest fashion clothes or the latest gadgets (including cell phones). In the developed world (incl. US, western Europe, Japan), where new mobile subscriber growth had saturated some time ago, the telecom industry is now bracing for a major slowdown. In addition to a slowdown in new mobile subscriptions, there’s expected to be a slowdown in the sales of handsets as well, as per the research group Gartner’s recent publication. The result is layoffs being announced left and right by wireless heavyweights such as Motorola, Nokia, Ericsson and various other vendors as well as operators globally.
Pakistan, of course, cannot remain shielded from this global turmoil (particularly with the present government). In addition to the direct impact from global economy, Pakistan’s local dynamics are also at play such as the political uncertainty, the internal war against terrorism, and of course the downfall of the Rupee adding more fuel to the oil-triggered inflation fire. These factors are impacting all industries, not just telecom. In fact, considering the situation, the telecom sector in Pakistan is not doing too bad. The sector was by far the largest recipient of foreign direct investment in 2007-08. As per PTA, the industry continues to add more than 3 million new mobile subscribers every month even under the current conditions.
But I guess we are somewhat spoiled after seeing the boom days (mostly 2005-06) when two new entrants Warid and Telenor entered the market. Not only did the mobile subscription graphs jump through the roof, the telecom jobs were available like hot cakes. Even the relatively less experienced folks were being grabbed by competing operators offering huge salary jumps. Unfortunately, we cannot expect the party to last forever (I’m sure we all remember what happened after the dot com party was over). What we have now entered in the Pakistani mobile industry can be termed the “settling down phase”. In a settling down phase, we usually expect to see a tightening of the belt (i.e., expenses being cut down), policies and processes being defined, and possibly some mergers/acquisitions. Of course I don’t have a crystal ball with me to see too much in the distant future, but I do know that we in Pakistan have a huge growth potential as far as telecom is concerned, even if we compare with just the neighboring countries like India and China. There are 3G and 4G technologies yet to be deployed, and there’s so much more to value added services than downloading ring tones and Bolo SMS.
So in short, the answer to the question posed in the title is “No”. In my opinion, there is no saturation point as yet. The industry is showing a healthy cautious growth in spite of the global economic slowdown. And best of all, no layoffs announced in the local mobile industry as opposed to other parts of the world.
For the young (at heart) and the adventurous folks out there, my advice: don’t let a temporary situation dictate your choice of career. It does not matter which industry you choose, always remember that the party never lasts forever – only tough companies do (i.e., if you are lucky to find a job in one).
Happy hunting!
12 Responses to “Is The Pakistani Telecom Sector Really Saturated?”
By Osama on Sep 5, 2008 | Reply
I totally agree with these views as I myself have the same opinion that this is the time when a sector stabilizes itself after having a booming launch.It is the period when telecom is taking time to strengthen its roots as an industry.
By ahsan tanvir on Sep 5, 2008 | Reply
i worked at RF alcatel and at present i am at NDC , but my advise for my new engineers is not to run just behind telecom as Syed Umar depicted its not true Multinatinals like Huawei are offering 15000 only which will be less then your B Com OR B.A cousin working at call centre.
By Naveed on Sep 6, 2008 | Reply
Dear, i partially agree. Why don’t you know that companies like DanCom, RedTone and many LDIs has laid off their employees. The big giants have stopped further recuitment.
Naveed
By Muhammad Umair (zong quetta) on Sep 6, 2008 | Reply
Well i belive what evr Mr. umar has written is the fact at present we are at a setteling stage which doesnot mean saturation also we should prpare ourselves for the upcoming technologies rather then blaming that we are stucked at a place due to saturation or limited opprotunities which i believe are never limited.
By Amjad on Sep 6, 2008 | Reply
ya m also strongly agree with the writer as the telecom sector is at a very nascent stage yet , it will goes towards 3G ,4G and there will be a tremendous growth but one thing is obvious that all this depends upon the economic, political and security conditions of tne country.
By Kashif on Sep 6, 2008 | Reply
Very elaborately described the facts and factors related to the topic.
By Asad abbas on Sep 6, 2008 | Reply
very much agree with umar but my question is that can we see the exact boom in near future as one or two new operators are expected to arrive for 3G.
By Mehak Aslam Khan on Sep 8, 2008 | Reply
Well explained facts.
Yes, keep the fingers crossed.
Regards
By Arslan Rana on Sep 9, 2008 | Reply
The article is very well written and touches on many points.However i could not hold out on some of the points that are still to be told to our younger,grooming telecoms generation that is still holding onto the telecoms bandwagon in Pakistan and also for freshers ventruing into the field.For this some light needs to be reflected by looking from outside the telecom industry and towards our higher education system.
We know as a fact that every year thousands of electrical/IT/telecom engineers are being produced from our engng. universities.Due to the limited industry infrastructure in Pakistan they also posses narrow pathways for a good career path.The same is not the case in western/developed countries.Every graduated field has a developed and lucrative industry thriving.Be it arts,music,journalism,chefs(!),sculpting,archeology etc…this is provided to the students there with diverse career options and with good counseling.Sadly this point is still ignored at large here w/o a BADLY needed emphasis during their final years (forgot about counselling in high schools!) in the universities.It is common to see “compulsory classes” held at the end of the final semesters (with no credit ratings) in good western universities, which shows them the different industry statistics in which they have opted and to prepare them for rude shocks if any.
I have also seen a large number of engineers who if given other options, would have gladly switched the fields, but have succumbed to our stereo typed and ‘dictated’ pre-med, pre-eng and ‘commerce’ fad.The end result is predictable, of one unbalanced market(telecom) with mostly unsatisfied customers(engineers).
Also I think the term ’stability’ may be a positive term for the american market and as such wont be a huge difference to them (as they have stability matrix of for all odd jobs into certain brackets) but in our scenario i think of the telecom market taking the shape of common DSL/networking companies with rampant job abuse by giving meagre salaries of 8k to 15k.
I wish all this woould prove to be wrong, but to be realistic the, cutlural and education dynamics have to be taken into scope.
By taqi on Sep 9, 2008 | Reply
I think, this is not the “settling down phase”, this is laying off phase after which settling phase will start. Regardind NO layoffs, recently 2 months ago this phase started in NSN covering a figure of around 300 layoffs.
By Murtaza on Sep 29, 2008 | Reply
I think Telecom is doing same all over the world. Economic crisis is all over the world these days.But for sure in Pakistan due to security issues and its political instability foreign investors will refrain from making any investment.A fresh example is British Airlines recently terminated its flight between UK and Islamabad.
By ali baloch on Nov 3, 2008 | Reply
well comments given by well professional pesons,im a student,but still im of the opinion that Telecomm Sectored is not still saturated in Pakistan due to the economic and law and order breakers are causing great haults time by time.
Few years ago,when foeign investment in the field of Telecommunication started,it looked that the Tele Density in Pakistan will grow much faster than any country has ever achieved.
Due to the Poliltical termoils caused by politicians who build policies have grown much higher which haulted the foreign investment in the country.
The importance that Telecomm field brought and how it could go much faster can be rreaalized from the fact that the energy crisis in just two years increased so high.it was the Telecommunication industry which is greatly responsible for this crisis.
Every Telecomm Operator operates nearly 50,000 BTS(i.e towers that our cell phones communicate with).it can be imagined how important was the development of this sector was for Pakistan.
There is still a grreat monopoly going in Telecomm sector by present operators,which are stopping the entance of new players in the market.which ultimately stops saturation.
For only thhis reason we are getting services like hellotunes,n crappy stuff like this.
The value added services in this field are beyond our imaginations,which we ae not achieving.
Investment from countries like China and India should be increased,which are great global emerging economies of the World.