From 3G to 4G: a leap of faith

When the Indian government successfully sold a 3G technology license last year and raked in $14.6 billion in the process, Pakistani authorities smelled the opportunity. So in the FY11 budget, the government announced, it would also auction 3G licenses to telecom operators in the country.
However, the envisioned proceeds of Rs51 billion have so far been elusive as ten months have come and gone since the announcement without any progress. In fact, some industry insiders do not share the governments optimism over this technology as they feel that the country has missed the 3G band wagon due to the delay.
So what is the hold-up? For starters, only five percent of the countrys existing mobile users currently access the internet via cellular phones. Average revenue per user (ARPU) is low at about $2-$3 in the country relative to the region, further testing the feasibility of the sizeable investment necessary for 3G technology.
A recent World Bank report puts the total number of internet users in the country at about 12 percent of the population, further dampening prospects of increased traffic in the near future.
Besides subdued demand, the telecom operators are themselves ill-equipped to take on the cutting edge platform. Telcos are currently undergoing consolidation with major players actively seeking mergers and acquisitions.
Some players have already placed their bets on alternate technologies as Mobilink has invested in Wimax and Pakistan Telecommunications Company Limited (PTCL) in broadband internet. For a technological up-gradation, operators would require cooperative willingness and capability from their vendors and contractors - a critical issue in itself.
While the government and telecom sector deliberate over the 3G technology, the next generation of wireless technology, 4G has already been implemented in countries such as the United States, Russia and Saudi Arabia. Now Pakistan Telecommunications Authority (PTA) appears to be rising from its slumber.
Fielding questions from local media, PTA chairman Dr. Mohammed Yaseen recently hinted that technology neutral licenses may be granted to telecom providers. This would let each licensed operator choose between establishing a 3G or a 4G network.
While many industry insiders have criticised the government for fumbling the chance to implement 3G technology in a timely manner; they are hopeful that the new found flexibility shown by PTA will help introduce the next generation technology, sooner.
However, now that the authorities are finally moving in the right direction, the onus has shifted to the countrys telecom providers who must now take a leap of faith so that their customers may experience services like e-health, e-education and e-banking. For the intensely competitive telecom sector, this technological leap could prove to be a historic boon for customers and shareholders, alike.