Ushering in mobile broadband services

Pakistan Telecommunications Authority is, reportedly, preparing to auction the frequency spectrum for mobile broadband services in March 2012. The auction would be technology-neutral, which means that mobile network operators can bid for any data network technology, including 3G, 4G, and LTE. Pressed with its own fiscal concerns, the government would very much like to seal the deal at the earliest. MNOs do not really have a choice, as the 2G technology is slowly phasing out. It appears that authorities might distribute the 30 MHz frequency spectrum into three blocks of 10MHz each, and put up three licenses for auction. Details of the auction are yet to be announced and could differ from this scenario. Telecom experts believe that the imminent transition from 2G to 3G data networks would create a market for high-speed mobile broadband, which would remove the deficiencies of fixed broadband. This would present a growth opportunity for MNOs and offer great value to mobile subscribers. By accessing high-speed broadband internet on their 3G-enabled handsets, subscribers will be able to do social networking, view and upload images and videos, stream live channels, and make video conference calls (e.g., via Skype). Mobile subscribers may also access high-speed broadband on their personal computers, by using dongles. High-speed data services would be the name of the game. "One will laugh at the days of 2G after experiencing 3G services. It would be like driving a rickshaw and then suddenly hopping a Ferrari," exclaimed an enthusiastic telecom professional. Leading MNOs in Pakistan are preparing to make their network equipment compatible with 3G technology and their junior partners are also in the race. Yet, optimistic skepticism is still prevailing in the minds of many telecom experts and professionals, who cite customer adoption and impact on the Average Revenue Per User (ARPU) as the game changers. Customer adoption always takes time, and in this case, depends on various factors, including value-added services and penetration of 3G-enabled handsets. "MNOs would naturally concentrate on large cities, where the adoption of 3G-enabled services is expected to be higher. The overwhelming experience with GPRS and EDGE services is a reason enough to believe that," noted an industry professional. Though ARPUs are sure to improve in the post-3G milieu, the telecom sector is divided on the extent of the boost. However, a common view is that there should be no more than three 3G operators. "The data market should be developed first, and then competition should be content-centric rather than price-sensitive. MNOs won have to bring tariffs down to bare minimum for data services. The ARPU at the top is high, and one may not target the low-consumption segment," noted a telecom expert. All eyes are on the auction now, and the authorities need to be cautious. First, transparency and openness in this mega deal should not be compromised. Secondly, a fair and realistic auction price should be envisioned by the government. Thirdly, rollout obligations of the mobile broadband licensees should be strictly followed through by the PTA. Since a political transition may possibly occur in between the said auction (March 2012) and expected rollout of mobile broadband services (2013), there shouldn be any mismatch between what is committed and what could really be delivered to the stakeholders.