Growth prospects, market challenges and policy measures: evolution of mobile broadband in Pakistan

Date08 January 2018
Pages42-61
Published date08 January 2018
DOIhttps://doi.org/10.1108/DPRG-04-2017-0014
AuthorMuhammad Shehzad Hanif,Shao Yunfei,Muhammad Imran Hanif
Subject MatterInformation & knowledge management,Information management & governance,Information policy
Growth prospects, market challenges and
policy measures: evolution of mobile
broadband in Pakistan
Muhammad Shehzad Hanif, Shao Yunfei and Muhammad Imran Hanif
Muhammad Shehzad Hanif
and Shao Yunfei are both
based at the University of
Electronic Science and
Technology of China,
Chengdu, China.
Muhammad Imran Hanif
is based at the Alfalah
Institute of Banking and
Finance, Bahauddin
Zakariya University,
Multan, Pakistan.
Abstract
Purpose The paper aims to explore the long-term prospects of mobile broadband adoption in a
developing country. The supply-side and demand-side policy measures are recommended to counter
the challenges to broadband adoption.
Design/methodology/approach Methodologically, this study uses document analysis to explain
secondary data including growth statistics, trade literature and previous scholarly research. Based on
the growth statistics of broadband and the informed market insights, the research discusses the
prevailing market threats and recommends counter measures to improve the long-term prospects of
broadband propagation.
Findings The growth of mobile broadband is settling down in Pakistan due to various barriers like
cost, literacy, security and unavailability of local content. Collaborative efforts are required by the
government, the service providers and the people to enhance the adoption of broadband service and
secure economic benefits of the broadband.
Practical implications The research offers useful implications for managers and policymakers in
Asian and African developing countries; the policy measures discussed here may serve as guidelines
for them in the design of their own policies regarding broadband supply and demand.
Originality/value The study makes an effort to examine the broadband growth in a developing
country on the basis of both quantitative and qualitative aspects. The research endeavors to fill the gap
on the particular scholarship of research covering potential uptake of broadband services and the
effects of constraining elements to broadband adoption in a developing country.
Keywords Broadband, 4G, 3G, Barriers to broadband growth, Pakistan, Teledensity
Paper type Research paper
1. Introduction
The huge growth of mobile broadband has curtailed the fixed broadband growth to mere
fractions, and there is no end. Powered by the integral features of portability, mobility and
device and applications universality, the data enabled smart phone subscriptions are
expected to reach 6.1 Billion mark in 2020- a point in time where the smartphones will finally
outnumber the active fixed phone subscriptions around the globe (Ingrid, 2015). A large
part of it is coming from the less mature markets in Asia Pacific and Africa regions, whereas
the developed US and European markets have been witnessing steadier growth patterns
for mobile broadband subscriptions in recent past.
The era of fifth generation mobile networks is fast approaching, and preparations are
already underway in the relatively developed and mature markets for testing of the
advanced air interface and software defined networking to enable the core networks
compliance for upcoming 5G mobile standards. The new developments in 2017 would
call for collaborative approach between over-the-top players and conventional
operators as the fall of traditional fixed line telephony is getting even deeper and
Received 2 April 2017
Revised 20 August 2017
Accepted 3 October 2017
PAGE 42 DIGITAL POLICY, REGULATION AND GOVERNANCE VOL. 20 NO. 1, 2018, pp. 42-61, © Emerald Publishing Limited, ISSN 2398-5038 DOI 10.1108/DPRG-04-2017-0014
steeper and extending the digital divide further until the governments in the developing
countries exercise the right strategies and plans for the provision of services to the less
developed market sectors (Developing_Telecoms_Trends_2017, 2017).
The role of government, insofar as a moderator, a facilitator and a regulator overseeing the
development and proliferation of broadband is well established; yet, the modes and means
of execution varies across the world (Cava-Ferreruela and Alabau-Muñoz, 2006;Falch,
2007;Picot and Wernick, 2007;Belloc et al., 2012). Although various researchers have
discussed the proliferation of broadband in developing countries from the perspective of
government role play and the demand side and supply side measures and the need for a
dedicated national broadband plan (Galperin et al., 2013;Jain, 2014;Jayakar and Liu,
2014;Shin and Jung, 2012); yet, the particular scholarship of research covering the
potential uptake of broadband services and the effects of constraining elements to
broadband adoption in a developing country is relatively under-researched.
Drawing on secondary data sources, policy documents, trade literature, past research and
analysis of broadband growth statistics, this study endeavors to meet this gap by analyzing
the market potential of mobile broadband service in a developing economy. The study
focuses on the launch, evolution and proliferation of broadband services in Pakistan and
demonstrate the growth trends of fixed and broadband services. The numbers although
being on the growing side, exhibit a slowdown. Reflecting on past research, informed
market insights and the industry best practices the study takes into account the major
challenges to broadband proliferation both from the supply and demand aspects and lend
policy guidelines for the government, communication service providers (CSPs) and the
society to leverage the full benefits of information and communication (ICT) for
the well-being of the people and society. The study has important policy implications for the
policymakers in other developing nations in Asia and Africa, where the mobile broadband
market is in nascent stages, and they are striving to adopt the digital life style and realize
the benefits of ICT regime.
1.1 Key research questions
The mobile broadband services were only introduced in 2014 in Pakistan and the people
adopted the new 3G and 4G mobile broadband services very quickly; with a record growth
rate of 345 per cent in the first year (PTA Annual Report, 2014-2015). With the launch of 3G
and 4G broadband mobile services in Pakistan, the era of digital life style has just begun
which will bring in whole new opportunities and facilities for both internet and non-internet
users in Pakistan. According to ITU-MISR report-2016, Pakistan is one of the countries
where the telecom operators are offering the cheapest mobile cellular services. The
average PPP$ price is US$7.04 in Pakistan as shown below in Table I (International
Telecommunication Union (ITU), 2016). Keeping in view the relatively saturated state of
Pakistan Telecom market where profit margins are very low and the service providers are
looking for mergers (PTA Annual Report, 2015-2016), several key questions arise.
Table I Pakistan is one of the countries with cheapest mobile services PPP$, 2015
Top three regions with lowest mobile service Prices in PPP$ (MISR-ITU 2016)
Asia and Pacific Europe Africa
Country Price in PPP$ Country Price in PPP$ Country Price in PPP$
Sri Lanka 2.45 Estonia 4.67 Kenya 7.96
Bangladesh 4.14 Lithuania 5.59 Ethiopia 8.70
Iran 5.43 Latvia 6.84 Mauritius 9.18
China 6.63 Austria 6.97 Namibia 9.54
Pakistan 7.04 Cyprus 8.56 Nigeria 10.17
Source: ITU MISR Report (2016)
VOL. 20 NO. 1 2018 DIGITAL POLICY, REGULATION AND GOVERNANCE PAGE 43

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