Telecom operators need low cost business model

With mobile density stagnant at 58.6 percent during October, there is little room to grow volumetrically in saturated cellular industry. Operators have limited options to compete; price wars, better network service and the need to create a niche through value added services and retain costumers.
Considering that price war would be zero sum game, especially knowing that there is little room to improve on voice service provision, there is a fair chance that cellular companies would follow the model of collective dominance currently in practice in many European countries and elsewhere in the region. This behavior will make companies indirectly synchronize the pricing and policy decision they make.
Rivals in communication industry are making waves for each other by launching packages, such as per second billing; free SMSs, late night offers, etc. Moreover, the facility to change network without changing number, which has eliminated non-cash cost of switching, has pushed the competition among mobile operators to a boiling point.
Given these conditions, one major concern for mobile operators is declining average revenue per user, which has nearly halved in the past four years - continuously squeezing industrys gross margins.
In this regard, domestic industry can take cue from other developing countries that have successfully implemented cost cutting and cost saving measures in order to remain profitable, while reducing tariffs to further expand subscribers base and to reach to poorest of the poor.
Among such low cost business models in use, "infrastructure-sharing model" has become a widely adopted business practice in both developed and developing parts of the world. In fact, in some countries, link tower sharing is compulsory, such as China and Bangladesh.
One way to implement this model at home is that telecom providers can pool all towers in a single company, to reduce their infrastructure cost considerably - a move that is already, reportedly, under consideration in domestic telecom circles these days.
Likewise, telecom businesses can outsource most of their non-core functions in order to reduce cost, a practice that has gained currency in India of late. Under this model, for instance, I.T operations are outsourced to I.T solution providers, mobile network services are outsourced to mobile manufactures, while customer services, such as call centers, are contracted out to independent firms specializing in customer relationship management.
By implementing this model domestically, telecom providers can increase valued added services. For instance, if m-health services are introduced and mobile operators outsource this service to health consultant firm, not only customers and consultancy firm will be better off but mobile operators will also mint money by serving as middle men.
But as other service evaluating parameters such as the efficiency of network and its outreach and pricing are generalized and made common to most operators, the challenge in infrastructure-sharing model will be beating the competitor through sheer value addition. Does Pakistani market offer such creativity, one has to wait and see.