The Telecom Diehards

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!