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BR Research

On broadband uptake

Published October 1, 2019 Updated October 23, 2019

Official numbers tell a promising story of broadband uptake. As of August end 2019, the PTA data show that there were 73 million broadband subscriptions in Pakistan. That’s an impressive broadband density, which policymakers like to tout in their meetings with foreign donors. But the portrait is not as perfect as it looks.

The strength of a country’s broadband infrastructure lies in its fixed-line broadband that is powered by fiber optic cables. In Pakistan, however, 97 percent of all broadband subscriptions are “mobile broadband” (3G and 4G). As of August end 2019, there were 71 million mobile broadband customers. That, in itself, is not bad, for close to half of cellular subscriptions now have high-speed internet to go with basic calls and sms.

But an overwhelming policy focus on mobile broadband is apparently hurting the prospects for fixed broadband uptake. Thanks to fixed-mobile substitution since the early 2000’s, the cellular mobile companies quickly occupied policymakers’ imagination as people took to mobile communication, cellular companies started making billions, and the government had another golden goose in its sight.

Thanks to years of neglect, in front of mobile broadband, fixed broadband variants have continued to fade. For instance, DSL broadband subscribers stand at 1.6 million, (a flat line for some time), as PTCL is unable to significantly expand its network. The woes are topped-up by a secular decline in land subscriptions since 2005. The promise shown by wireless phones (WLL) once upon a time also peaked earlier this decade.

Meanwhile, fiber-to-the-home (FTTH) continues its slow path to gain a critical mass and fulfill its potential. But the last decade has just about one lac FTTH subscriptions to show for progress. As for wireless broadband, variants like Wimax and EVDO are on their way to slow oblivion. All in all, fixed and wireless broadband subscriptions stands at less than 10 percent of households, an abysmal show that continues.

The limited policy focus on and incentives for fixed broadband expansion eventually drag the prospects of mobile broadband as well. The telcos are able to grow their 3G and 4G subscriptions mainly in the large and second-tier cities, where a glut of fiber optic cables exists to meet the backhaul needs of an expanding and data-hungry network.

But to expand beyond the metros and towns towards the countryside and the hinterlands would be asking for a decent fiber optic footprint, which does not exist at scale. That lack of investment in rural areas is one of the main reasons why the cities have far better broadband speed. As a result, the geographic divide is being compounded by a digital divide. This is a new form of exclusion that needs to be highlighted.

The government needs to turn towards developing a fixed-broadband backbone of the country by facilitating extensive rollout of fiber-optic networks. It needs to address policy issues like right-of-way procedures, high duties on hardware imports, and broadband tax. Only then can large and small businesses bank on high-speed, reliable and affordable Internet and rural areas can also enjoy the fruits of technology.

 

 

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