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“Where is Pakistan going in the age of 3G”Pakistan Telecom Authority

Date: 4th February 2014

Create a fair regulatory regime to promote investment, encourage competition, protect consumer interest and ensure high quality ICT services.

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Pakistan : An Overview

SOURCE: Team analysis

Key Stats

Pakistan

▪ Income /Capita US $1300▪ Literacy Rate 53%▪ Media Age 21.2▪ Geo-strategic Location▪ Population and workforce

Land Area 796,095 km2 • 36th Largest Area

Population, mil 190 (6th Largest Population)

• Pakistan has the 6th largest population in the world, making it an attractive market for global investors

• The country is expected to have more than 230 mln inhabitants by 2030 with ~2% per anum growth

• Its population is young and becoming more educated• Urbanization trend is expected to continue, reaching a level of

43% by 2030• It is expected that by 2050, Pakistan will be the 31st largest

economy in world with nominal GDP of 675 bln USD from its current state of ~240 bln USD (43rd largest economy as of 2013)

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Telecom Overview : Evolution of Cellular Industry in PakistanS

ecto

r G

row

th

19981998

19901990

20042004

2007200720142014

• 1st GSM Operator “Mobilink” Launched Services

• UFONE Started its Operations as 2nd GSM Operator

• 1st Spectrum Auction • Telenor & Warid begin

operations in Pakistan

• Next Generation Spectrum Auction planned

• Auction to offer Technology Neutral next generation services

• Value Partner having a Global footprint hired as Auction Consultants

• CMPAK “ZONG” Acquire Paktel and start offering Cellular Services

• 2 Cellular (AMPS) issued to Paktel & Instaphone

19921992

SOURCE: PTA Data

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Telecom Overview : Highlights of Telecom Industry in Pakistan

Key Telecom Indicators

Cellular Subscribers (as of Nov 2013): 132.3 million (SIM connections based on 90 days active)

Cellular Teledensity (as of Nov 2013): 73.2%

Annual Cellular Revenues (FY2012-13): Rs. 311 billion

Total Male population (15+): 60.8 million

Total Female population (15+): 57.5 million

A subscriber holds 2.6 SIMs on average for family members

Market is mainly prepaid oriented (~98%)

Smartphone penetration is about 15%

Data / VAS potential is almost entirely unexploited with ~10% share in total revenues

Fixed telco market is limited and this represents an important potential for mobile broadband

Today, mobile represents 78% of total Pakistani telco market, and it can be expected to further increase its share in the medium term

SOURCE: PTA Data

Mobile subscriber base evolution (# of SIMs, mln)

2006-2007 2008-2009 2010-2011 2012-2013

63,160,874.0

94,342,030.0

108,894,518.1

127,726,933.0

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Broadband Technology Overview: Penetration in Pakistan (A shift towards Mobile Broadband seen since 2012 )

56.044.0 2012

Fixed (DSL, HFC,FTTH) Wireless(WiMAX,EvDO)

41.0

59.02013

Fixed (DSL, HFC,FTTH) Wireless(WiMAX,EvDO)

70.9

10.3

6.6

7.3 2.72.2

2013

PTCL

Wateen

WorldCall

WiTribe

Qubee

Others

60.114.2

8.6

9.43.54.2

2012

PTCLWateenWorldCallWiTribeQubeeOthers

Conclusion

• A lot of potential remains within the Industry to maximize the revenues

• Spectrum Auction and introduction of faster mobile data services will trigger a Technological growth

• Companies will be able to capitalize from revenue generation from Data

• High un-met demand for faster mobile services

Broadband Technology Share Broadband Operators Market Share

SOURCE: PTA Data

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Potential of Next Generation Services in Pakistan

Data Revenues of Telecom Sector: Data revenue share is increasing

Local Loop Operators (FLL & WLL)Cellular Operators: Industry yet to capitalize on Data revenue stream due to technology limitations

Rapid growth in Mobile broadband & traffic

SOURCE: PTA Data

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Where is Pakistan going in the age of 3G

• Wide range of social benefits e.g. in education, healthcare etc• • Distant Learning for children’s education in Remote areas

• Improved  emergency responses

• Enhancement in socio-economic development which results in increased employment opportunities·

• Improved Mobile Financial Services

• Connected Society

Conclusion: Benefits of Next Generation Services

•Index of telecommunication development has moved from fixed line & mobile voice penetration to broadband and connected Data

•Broadband adoption in Pakistan is low due to Limited availability of Broad band services

•Mobile penetration of approximately 78% depicting the need for user applications .

•Huge Market potential for provision of BB services for Social networking, business productivity , Education, Security sector

Context: Strong Business case for Next Generation Mobile Services

SOURCE: PTA Data

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Telecom Overview: Well defined Policy , Regulatory and Industry Structure

Min of IT & Telecom

Pakistan Telecom Authority

PTCL, NTC, SCO

Frequency Allocation Board

PRIVATE OPERATORS

FREQUENCY ASSIGNMENT

POLICY DECISIONS

CELLULAR, WLL, DATA & LDI

BASIC VOICE & VAS

REGULATORY FUNCTIONS

PSEB IT & SOFTWARE PROMOTION

USF/R&D Fund TELECOM DEVELOPMENT & R&D

SOURCE: PTA Data

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Connected Society

Connected Devices

Connected Community

Where is Pakistan going in the age of 3G

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Market (Socio-Economic Development)

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Service Providers

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Market (Growth)

2013 2020 2025Po

pu

lati

on

to

tal/M

edia

n a

ge

Mob

ile

Voic

e /

M

BB

MB

B D

ata

U

sage T

ota

l &

/U

ser

226 Mn207 Mn186 Mn 22.4 Yr 24.7 Yr 26.4 Yr

125 Mn 1.5 Mn 169 Mn 47Mn 79 Mn194 Mn

2,609 1,824 TB/Mon MB/Mon

Connect

ed

Devic

es

Tota

l/ P

er

Pers

on

327, 430 7,305 TB/Month MB/Mon

845,315 11,220TB/Mon MB/Mon

3.47/Person

1,362 Mn 6.58/Person

2,146 Mn 9.5/Person

Source- Population: UN Population Census. Mobile Estimate: Plum Consulting & PTA, MBB Data Usage: Portio Research - Values Interpolated for 2025 from historical growth values , Connected Devices: Futurist Speaker - Values Interpolated for 2025 from world average values

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Enabling Technologies (Wireless)

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Enabling Technologies (OFC)

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Supportive Regulations

"Develop a smarter society by encouraging growth in broadband infrastructure deployment, provision of affordable access and quality of broadband services to across Pakistan on the basis of equitable opportunities and promotion of competition in the sector through fair regulatory regime"

Governments to facilitate the normal functioning of competition in the mobile sector rather than over-regulating it

Governments will not discriminate in favour of, or against, new market entrants, but establish a level playing field so that fairness and transparency is ensured in licensing and competition

Governments will promote market consolidation and allow sustainable market structures to evolve naturally

Additional 100 to 200 MHz of spectrumby by 2025 in harmonised bands to be made available for meeting industry demands to deliver the full benefit of mobile broadband service to consumers

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PTA to ensure spectrum availability in harmonised bands of 700/800 Mhz, 850 Mhz, 900 Mhz, 1800 Mhz and 2100 Mhz which are appropriate for next generation mobile services

PTA to encourage mobile infrastructure sharing through voluntary cooperation between licensed operators and also fecilitating third party business

PTA to supports mobile operators transition to LTE & Advance LTE service using either TDD or FDD implementations.

Respond proactively against cyber theft & crimes to build consumer trust in online services that shall also effect uptake in the long run

Government to lay out policy guidelines to administer a 'co-regulatory' scheme to address community concerns about offensive and illegal material online

Content licensing & Monitoring reform will be introduced to enable new business models for rights holders and commercial users to provide attractive content offers for consumers

Unequivocal attention will be directed to extend broadband coverage across Pakistani remote areas

Regular in-house as well as third party QoS audits to ensure consumer interest are protected

Supportive Regulations

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Questions?????

Create a fair regulatory regime to promote investment, encourage competition, protect consumer interest and ensure high quality ICT services.