Over view of Pakistan Telco market prior to 3G spectrum auction in March 2014 and what business challenges the Mobile operators will face and how they should be tackled

1. 3G Business Consultancy to Pakistan MNOs
Transforming your business vision into reality
Ahtesham Ahmed
Ahtesham.ahmed@Hotmail.com
Date: March 2014
Purpose: To give business consultancy to
Pakistan MNO to 3G migration

2. Emerging PAKISTAN - Moving towards 3G Revolution
Agenda
Over View of Pakistan Telecom Market
Evolution of 3G in Pakistan, Business Challenges & Driving Factors
Adding Value to achieve business goals
Peer Market Case Study
• ITU
• PTA
• State Bank of Pak
• ProPakistani
• TRAI
Data Sources
• The World Bank

3. India
Pakistan
Indonesia
China
Bangladesh
Russia
Philippines Thailand
Vietnam
Egypt
Iran
Argentina
Saudi Arabia
South Africa
Poland
S. Korea
Turkey
Nigeria
Brazil
Mexico
Subscriber Growth (%) 2011 - 2016RevenueperaverageMoU&SMSUS$
GDP
$ 524 Billion
GDP Growth Rate
3.7 %
Population
190 Million
Urban Population
37 %
Unemployment Rate
10.7%
Population Below Poverty
Line
22 %
Literacy Rate
54.9%
Competition Market: 5 Operators and foreign investors
Flat Growth: Saturated market where Voice & SMS cannot promise upsell
Quality & Price: Value for money is what drives this market
Emerging Service: Technology driven innovation, market is still emerging
Pakistan falls under Low Price &
High Subscriber Growth cluster
Price Vs Subscriber Growth- Emerging Telco Markets
Emerging Market – Pakistan Communication Sector
0
0.02
0.04
0.06
0.08
0.1
0.12
0.14
0.16
0.18
0 1 2 3 4 5 6 7 8 9
Author:
Ahtesham.Ahmed@hotmail.com

4. 666
1158
1421
2585
2338
1230
909
359 212
422
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Telecom Investment
278
489
899
1331
1821
2124
2360
2628
2985
3136
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
Telecom Investment US $ Million Cellular Revenue US $ Million
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
0
20,000,000
40,000,000
60,000,000
80,000,000
100,000,000
120,000,000
140,000,000
2006 2007 2008 2009 2010 2011 2012 2013
Total Subscribers Growth
22%
40%
55% 58%
60%
65%
69%
74%
2006 2007 2008 2009 2010 2011 2012 2013
Tele Density Subscriber Growth
Sub
%
Telecom Investment remained on
the lower end but introduction of
3G will show an influx in foreign
investment
Cellular revenue grows upto
USD$ 3136M with a growth of 5%
compared to last fiscal year
Tele density climbs upto 74%
Mobile Subscription reached upto
132million. The market is
saturated so the growth rate
remains lower till 4%
Key Trends – Revenue & Subscriber Growth
132 Million
Mobile
Subscriber
Author:
Ahtesham.Ahmed@hotmail.com

5. 0
50
100
150
200
250
300
2006 2007 2008 2009 2010 2011 2012 2013
Mobilink Ufone Zong Telenor Warid
0
5,000,000
10,000,000
15,000,000
20,000,000
25,000,000
30,000,000
35,000,000
40,000,000
2006 2007 2008 2009 2010 2011 2012 2013
Mobilink Ufone Zong Telenor Warid
MNO Subscriber Base
MNO ARPU PAK Rs Market Share
Mobilink
30%
Ufone
19%
Zong
11%
Telenor
28%
Warid
12%
Mobilink remains on TOP with
30% market share followed by
Telenor. Both operators target
high end users and corporate
sector
Zong is aggressive in terms of
subscriber acquisition but with
lowest ARPU
Warid seems to be loosing the
play in terms of market share and
remaining with high end customer
with less share
Key Trends – MNO Dominance & ARPU
ARPU $ 2
Author:
Ahtesham.Ahmed@hotmail.com

6. 0.033 million Sub
0.57 million Sub
1.15 million Sub
1.2 million Sub
Broadband Subscriber by Technology
Key Trends – Broadband Penetration
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
2005 2006 2007 2008 2009 2010 2011 2012 2013
DSL HFC WiMax FTTH EvDO Others
Broadband Sub Growth
56
44
41
59
FIXED(DSL, HFC, FTTH) WIRELESS(WIMAX, EVDO)
2012 2013
39%
22%
0%
18%
0%
11%
2%
7% 1%
PTCL
TeleCard
Mytel
WorldCall
NTC
Wateen
Sharp/Qubee
Wi-Tribe
Link Direct
Wireless Broadband Market Share Market share Fixed Vs Wireless
3 Million
Broadband
Subscriber
100% growth in last 4 years 0.00%
0.50%
1.00%
1.50%
2.00%
0
0.5
1
1.5
2
2.5
3
3.5
2005 2006 2007 2008 2009 2010 2011 2012 2013
Total WLL Sub Million WLL Density
Author:
Ahtesham.Ahmed@hotmail.com

7. Internet Users
Mob Internet User
8% of the population access
internet through mobile
30
million
15
Million
Internet penetration is 16%70% Population
under 30 years of age
8 -10% Smartphone Penetration
9 Million 2 Million 1.2 Million 1.4 Million
Twitter breaks news in PakistanFamous Social Media in Pak
Last million sub in just 45 days
Pakistan is 10th Largest LinkedIn
nation in the world
33% Access Fb via
Smartphone
Accessed through proxy since2012
Daily Motion is the alternate site
Estimated online sales of
USD $25million/year
Over 50,000 online
shipments
• 11% of Population have formal
Banking
• 9% have mobile Banking
Mobile Payment
• 2.4 million account
• 126% growth rate
Entertainment
TV seasons
News
Local news have highest
ratings
Sports
Cricket and football is
passion
Non Existent
• Mobile TV
• Online Gaming
• e-Govt
• e-Health
• e-Education
Common communications platforms
are popular
Infographic Pakistan’s Digital Landscape
People of Pakistan access internet for
People who use internet 80% of them spend
more than an hour online
USD 467 Million
cellular Mobile set import
Author:
Ahtesham.Ahmed@hotmail.com

8. Emerging PAKISTAN - Moving towards 3G Revolution
Over View of Pakistan Telecom Market
Evolution of 3G in Pakistan, Business Challenges & Driving Factors
Adding Value to achieve business goals
Peer Market Case Study
Agenda

9. 15 9
32 40 47 5070
50 44 50 35
70
71
150
80
150 150
40
14
100
50
70
120
60
60
Pakistan Indonesia India Philipines Thailand Egypt
450 850 900 1800 1900 2100 2300
0
0.5
1
1.5
2
2.5
3
3.5
Pakistan Indonesia India Philipines Thailand Egypt
Pakistan 3G/4G Spectrum Auction
Govt Expect to Raise
$2 Billion +
Postpaid / high end Customer
Churn from non 3G operators
specifically from urban area
Chances of new market entrant
seems slim from business
perspective
Auction price and which operators
win the auction will determine the
market dynamics
Evolution of internet era
in Pakistan
Spectrum Auction ~ Driving towards Smarter Pakistan
Spectrum Allocation Million Sub/MHz
LOT-A LOT-B LOT-C LOT-D
• One 3G spectrum of 10 MHz from 2100Mhz
• One 4G spectrum of 10 MHz from 1800Mhz
• One 3G spectrum of 10 MHz from 2100Mhz
• One 4G spectrum of 10 MHz from 1800Mhz
• One 3G spectrum of
5MHz from 2100Mhz
Band
• One 3G spectrum of 5MHz
from 2100Mhz Band
Author:
Ahtesham.Ahmed@hotmail.com

10. Major challenges in migrating to 3G
High Spectrum Cost Low ARPU & ROI Market Maturity
Time to Market & Good
service Quality
Value for Money - Product &
Price
Smartphone Penetration
3G spectrum cost will be
high specifically in this
economic condition. This
cost will shape the future
market
Low GDP country and
hyper competition
market, ROI is slow
3G awareness, internet
knowledge,
literacy/education,
value added with 3G all
needs to be injected
into the market
Delivering the service to
target market at the right
time with good quality
will remain a challenge
Innovative products
with value driven tariff
will drive market
dynamics
3G handsets are out of
reach of a common
man so just building the
3G network will not be
enough
Author:
Ahtesham.Ahmed@hotmail.com

11. Key Pillars of Success- Achieving Business Objectives
Deep Market Understanding
• Updated market insights
• Competitive Analysis
• Customer inclination and tendencies
Effective Strategy & Planning
• Business development plan
• Customer acquisition strategy
• Corporate sector planning
Personalize customer engagements
• Customer awareness
• Cross-channel execution
• Targeted campaigns
Continuous evolution and dynamics
• Trialed, adapted, scaled quickly
• Flexibility, agility to reshape strategy and execution
Innovative & Creative Products
• Personalized for each customer
• Catalogue of varied services that open new markets
• Superior Service Quality
Monetizing the content
Cross industry partnerships (Banking, Media,
Retail)
Partnerships with Handset manufacturers &
Content providers
New Revenue streams from Enterprise and
Corporate Sector
Compete on
Value not Volume
Service Quality not Price
Innovation & Content
Focus on
• Transform the
market the way
you want it to be
• Deliver Value as
your signature
• Spread your
wings and deliver
in all verticals
Author:
Ahtesham.Ahmed@hotmail.com

12. Emerging PAKISTAN - Moving towards 3G Revolution
Over View of Pakistan Telecom Market
Evolution of 3G in Pakistan, Business Challenges & Driving Factors
Adding Value to achieve business goals
Peer Market Case Study
Agenda

13. Transformation Driving Business Objectives
Largest
Coverage
Leading Sub
base
Loyal
Postpaid
symbol
Corporate
influence
Insights Analytics
Leading
Innovation
Targeted
Campaigns
Customer
Centric
Approach
New
business
Model
Partnerships
SIM’s/user 2
Innovation will drive customer
focus
Ultimate Customer experience
will converge brand loyalty
Data Sims/user will be 1
Cemented Platform
Transformation
Initiatives
Author:
Ahtesham.Ahmed@hotmail.com

14. Readiness
Planning
Revenue
Generation,
Profitability,
Sales
3G Launch
Business Objectives
Business Consultancy (High Level SoW)
Area of Focus Inputs to Business Model Business Outcomes
Maturity Assessment
(Internal)
- Organizational realignment recommendations reports
- Cross department synergy recommendations
- SOP Development/Improvement inline with IBP
- Skill enhancement recommendations
- 3G Synergy Group
- Operational readiness for 3G launch
- Workforce readiness for
expected/unexpected challenges
- Proactive vs Reactive
- Shift focus from network to Service &
Customer
Maturity Assessment
(Market)
- Subscriber accessibility & affordability analysis
- Geographical market maturity assessment
- MNO vs Competition SWOT Analysis (Strength, Weaknesses,
Opportunities & Threats)
- Risk mitigation
- Planning aligned with realities
- Meet customer expectations
2G to 3G Migration in
alignment with Business
Objectives
- Geographical 3G Launch plan
- Quick wins vs long term stability reports
- Market share strategy
- Business partner ecosystem
- Service packaging, tariffs & innovation
- Service/Customer centric packages
- 2G continuation plan
- Focused launch
- Realistic expectations
- Quick Return on Investment
VAS, Packaging, Tariffs
- Competitive Analysis
- Personalized packaging & tariffs based on Market segmentation &
subscriber profiling
- Corporate Services & Packages
- Customer aligned marketing with focus on
new revenue streams
- Innovative products
- Competitive differentiation
New Customers,
Campaigns & Marketing
- Market development plan
- New customer acquisition strategy
- Transition to personalized campaigns
- Long-term/Short term marketing strategy
- Overachieve Revenue & Profitability
. targets
New partnerships
- Cross industry partnerships (Banking, Retail)
- SmartPhone Vendors partnership reports
- Content Providers
- New avenues to generate revenue
- Be a technology enabler in the region
- Revenue growth from corporate sector
- Grow & take others along
Innovation - New technologies & adoption strategy - Market leadership through innovation
Author:
Ahtesham.Ahmed@hotmail.com

15. Emerging PAKISTAN - Moving towards 3G Revolution
Over View of Pakistan Telecom Market
Evolution of 3G in Pakistan, Business Challenges & Driving Factors
Adding Value to achieve business goals
Peer Market Case Study
Agenda

16. 261
391
584 811 919 86726%
40%
53%
71%
79%
73%
0%
20%
40%
60%
80%
100%
0
200
400
600
800
1000
2008 2009 2010 2011 2012 2013
Wireless Sub in Million Teledensity
Wireless Sub & Tele density
MillionSub
Operator
3G Active Sub in
Million
Data ARPU
Bharti Airtel 6.4 $ 0.92
Vodafone India 3.3 $ 0.92
Idea Cellular 5.1 $ 0.95
Reliance
Communication
7.2
Jun 12
44
70
85
103
126
153
4
21
25
27
29
32
48
91
110
130
155
185
0
20
40
60
80
100
120
140
160
180
200
Urban Rural Total
Mobile Internet Users Million
Jun 13 Oct 13 Dec 13 Mar 14 Jun 14
10% smartphone
users
• 51% access internet
from mobile
• 58% Y-O-Y growth of
Rural internet users
• Facebook 90 Million
• Twitter 33 Million
• LinkedIn 18 Million
• Subscriber base was inclined toward internet but 3G
penetration was low due to affordability
• 3G capable handsets cost dropped from US$
180(2011) to US$ 100(2013)
• Data Market is now gaining pace with
e-Commerce , e-Health & e-Govt
Emerging Market –Indian Communication Sector
ARPU $ 1.8
1.2 Billion population
867 Million Mobile Sub
Struggling with 3G growth
Author:
Ahtesham.Ahmed@hotmail.com

17. Mounting Together