The Future or Funeral of Mobile Phone Industry in Pakistan

Mobile phones once were thought of as only indispensable in the rich world but the way mobile phones are transforming lives in low income countries it has become an essential and indispensable tool for socio-economic development. For many areas in Pakistan having limited availability of communication roads, postal services, fixed line services, health services and financial services Mobile telephony represents the first modern infrastructure of any kind. Mobile phone services have brought new possibilities and opportunities to urban and rural, rich and poor, young and old in Pakistan. With more than 119 million mobile phone subscribers and a penetration rate passing 70% it is one of world’s fastest growing markets. The penetration of mobile phones in Pakistan especially to the poor in far flung areas has done more to alleviate poverty than any number of aid programs combined together.

The mobile telephony industry in Pakistan is booming and there is scope for far greater development but in recent times the action of government in suspending mobile phone services across the country has outraged its users and seriously put in jeopardy future investment plans of telecom operators with billions lost in revenues on special occasions such as Eid festival or national events such as independence day celebrations. Senior officials of the mobile phone companies have expressed their resentment over the blackout of mobile phone services and have threatened to postpone their plans of investing billions of dollars in 3G and mobile banking.

The habit of suspending of mobile phone services under the pretext of security risk and terrorism in Pakistan takes it origins from the volatile province of Balochistan where the government is fighting nationalist elements in an ongoing battle for Balochistan. Over the last couple of years the government has been guilty of suspending mobile phone services in most parts of Balochistan during occasions such celebrations marking the Independence Day and Defense day now termed by many as “Blackouts”. Such draconian measures didn’t got widespread attention or condemnation from the media, civil society and organizations protecting digital rights and civil liberties primarily due to the scale of population (2.5 million) being affected by such actions and also the impact on telecom operators financial stakes were low so they were on surface at ease to comply with government instructions for suspending service in the entire region.  

Even though the success of such poor thought out strategy is questionable the same approach was adopted on Eid Festival in August when mobile phone users witnessed another blackout on a greater scale affecting millions of mobile phone users in Pakistan’s major cities as Karachi, Lahore, Islamabad, Peshawar and Quetta. Shoppers were paralyzed, friends were disconnected, businesses were unable to order stocks on time resulting in losses and millions of people were unable to send Eid greetings to their loved ones.

One shopper termed the experience as traumatic “We were at the same shopping mall but my wife and kids were somewhere else and we could not catch up with each other till morning”. Another local business man was furious as he was unable to contact with the manufacturer in time to order more supplies. “Eid is the only high peak business season in these distressing times and if we are unable to make money our families will starve”. Asad a college student was fuming with the government’s decision for suspending mobile phone services in August. “This pointing to his iPhone is the hub of my social life and the government has taken it away from me”. The use of mobile phones is so regular in Pakistan that it has become part of people lives to such an extent that they feel lost without it.

The mobile phone industry in Pakistan is already facing stiff challenges in the form of declining revenues, cut throat competition, customer retention, sim activation policies, rising operational costs and necessary investments required for rolling out 3G networks. To further frustrate the industry government obscure national security plan for temporary shutting down entire networks on festivals is jeopardizing future investments in the sector.  

According to industry estimates the mobile phone sector incurred more than 3 billion rupees in losses after services were suspended on Eid-ul-Fitr in August and further 600 million rupees in September on blackout of mobile phone services on Love Prophet Muhammad (PBUH) Day. Now the government has again announced to suspend mobile phone services in all major cities of Pakistan on Eid-ul-Azha to be celebrated across the country on the 27^th of October 2012.

The Eid Festivals brings peak voice and sms traffic on all networks. A billion sms messages exchange traffic on networks and a 400 percent increase is seen in voice traffic. Telecom companies also need to invest in network infrastructure to cope with peak network traffic and minimize service outages along with investing in new packages and promotions to attract customers.

The recent actions in Pakistan suggest that government takes mobile phones for granted and to them things like internet censorship or mobile phones blackout matter a little. We often forget how much these technologies have transformed and improved people’s lives for the better. Instead of further developing and promoting the mobile industry to be able to provide future 3G/4G services we are systematically pushing the industry towards its funeral. In times of great uncertainty and fear some people are constantly trying to curtail civil liberties in the name of fighting terrorism. We must confute them and show them that terrorism can be stopped without giving up liberty and to sum it up in the words of Benjamin Franklin; nations that have traded liberty for some temporary security measures deserve neither.