Pakistani incumbent operator PTCL will no longer have the upper hand in the broadband market. The Pakistan Telecommunications Authority (PTA) put an end to the operator's monopoly on internet bandwidth by announcing in May 2009, that both internet service providers (ISPs) and DSL operators were free to purchase bandwidth other than PTCL. Until then, alternative operators were restricted to procuring internet bandwidth from the incumbent alone, settling a two-year long dispute.
Demand for broadband has doubled over 2008. The total number of subscribers reached 267,180, up from 127,000, but still only reflecting a penetration rate of 0.2%. Cost remains the single largest barrier to growth. Greater competition in the bandwidth sector should bring overall tariffs down. On average broadband prices stand at US$16, twice that charged in India. In addition, the cost of PCs/laptops is a further burden, meaning that for the most part, the internet is accessed in educational institutions, organisations and internet cafes.
DSL remains the most widely available broadband platform, accounting for 59% of the total. This relies on fixed-line infrastructure, itself poor in availability, particularly where it is needed most, in remote and rural areas. Around two-thirds of Pakistanis live in rural areas. To this end, operators are now investing heavily into developing WiMAX technology, which can offer broadband services wirelessly. WiMAX is now the second most widely accessed form of broadband technology after DSL, having beaten Hybrid Fibre Coaxial (HFC).
Our expectations of the broadband market have been altered. We estimate a total of 627,000 at the end of 2009, accounting for 0.4% of the population. By 2013, we forecast 12%, with a total subscriber base of 21.3mn.
The fixed-line market on the other hand noted a significant decline in 2008, down by 12.8% to reach a total of 6.074mn. Fixed-line is quickly being neglected in favour of mobile services. This is due to their increasing affordability, while also offering better network coverage thanks to aggressive investments.
Again we have revised our forecasts for fixed-line and forecast that by the end of 2009, penetration rates will have reached 3.8% and falling to 2.8% by 2013.
Meanwhile, our extended sections on fixed-line and broadband have meant that our market analysis of the mobile sector remains unchanged, but will be given a full update in our Q409 report.
Pakistan Telecommunications Report Q3 2009: http://www.companiesandmarkets.com/r.ashx?id=T1YUB28X6154034