Today in many telecom circles there is a heated debate on the presence of five cellular operators in our country. The debate surpasses telecom engineers, gurus, strategy makers and even CEOs do not hesitate to comment. The famous statement from Telenor Pakistan’s ex CEO Jon Eddy Abdullah ‘number of operators should be three’ made the headlines.
What if really the market was a little open? What if number of operators were three? First let’s see how market’s current ARPU situation looks like;
Chronologically speaking, three-player mobile industry would manifest Mobilink, Ufone and Telenor, although it’s quite funny to assume Abu Dhabi Group and SingTel (parents of Warid) and China Mobile Pakistan (Zong) went to Pakistan Telecommunication Authority and with bags full of billions and PTA rejected their proposals with an intention to lead the telecom industry well.
Anyway, there can be two vantage points: users’ perspective; business point of view.
Speaking from a subscriber’s perspective, user will be at a disadvantage. This is simply because a user will have lesser options to choose from. Primordially, when only Instaphone and Paktel ruled the industry, mobile phone stayed was treated as an invention, and understandably so. Later in 1994 when Mobilink came to face the music, still nothing moved. Let’s not ignore the fact that telecom was a three player industry by then yet it was not as beneficial as it should have been. It was not until Ufone came in 2001 and actually introduced the concept of mobile phone for anyone and everyone.
A user could afford to use mobile phone as a commodity and not luxury. Concluding the argument, user do not really care about the number of operators; greater number of operators means more options, assortment of choices, cheaper tariffs and thus a more contented user.
From the business point of view, however, less service providers mean less (almost no) competition; greater ARPU but low number of subscribers. The last point implies we would have reached the milestone of 100 million subscribers a bit late but that wouldn’t have mattered much.
One point I would like to make here is if there are a higher number of operators- and as they are all foreigners- it would bring a larger proportion of FDI to the telecoms sector. As over the years FDI has declined, the percentage directed towards telecom sector declined even more.
One dire consequence
Lastly, one disastrous consequence from an individual’s end would be less number of jobs. Each new operator generates thousands of jobs in tens of departments across hundreds of cities. It is debatable no doubt but in a state we are in economically no one would mind more foreign investment and a fleet of job advertisements.