3G demand will be influenced by Affordability

The long anticipated auctions for high speed mobile spectrum are scheduled to begin in near future. The process of auction and launch of third generation networks and the immense supplement of high speed communication to the subscriber of mobile services to the Pakistan is about to begin and magic is still awaited.
Pakistan is primarily a voice market where it is not enough to provide the service at an affordable rate. To bring the data advantage of 3G, the operators have to bring the entire ecosystem. Consumers need to see the benefit of 3G through applications, be it browsers, touchscreen, email client or any other application. These are part of the entire ecosystem and  the service providers are robustly working on to ensure that when they launch, the phones have good form factors, affordable pricing and provide the reason to go 3G other than just voice. Today, everything above PKR 30000 is a 3G-ready Smartphone and consequently it doesn’t make any sense to buy anything else. There is a need in the industry of Pakistan to ensure that everything above PKR 8000 should be 3G-ready to make the 3G market larger. People who may otherwise buy a PKR 8000 phone might jump that category because 3G is an enabler. Regular feature phones with small 3G apps are clustering at around PKR 5000 whereas dongles and broadband wireless adapters that can be plugged into a computer, which started at around PKR 4000 are now trending towards PKR 2000. As expected, with new players are joining the upcoming 3G ecosystem all levels of the eco- system with affordable pricing and applications will kick into place. The competition for the consumer along with affordability would make 3G successful.
From the Pakistani consumer perspective, the first and foremost thing that one has to look at is that PC penetration is low – Therefore limiting broadband penetration. It is expected that 3G enabled general phones and Smartphone will become the dominant way for Internet access. Already in the youth demographic, the biggest amount of time on the Internet is spent on the computers. Internet access without giving up on voice is the value proposition of 3G. One most famous youth trend, social networking is becoming a key need, be it uploading pictures or tweeting. There is also entertainment content like music, TV on the go other than practical content such as maps, among others.
Then there is also a need of the rural application. Here not just the Smartphone, but also a need of the desktop being built on mobile chipsets in order to bring a computing experience that comes from the Internet to rural Pakistan. This is unlike the PC that came before the Internet and is complicated for a rural customer. People actually fear the computer as they don’t know how to use software and deal with a virus.
The most important thing is that the subscriber has to see value; they have to see that they can get on the Internet at an affordable rate. The operators would do it as voice revenues have gone down to almost zero and data revenues have grown some 15 times the incremental voice revenue. As per analysts, the mix in the next three years could be 50:50. The tradeoff between the analysts’ forecast and necessity of 3G networks is on its way.
The Pilot plan is to rollout the 3G services in the major cities of Pakistan just like the 2G   networks in past. Two or three operators would struggle for the more and more subscribers and special awareness campaigns are also expected. The demand is really a function of affordability and value, so when would all of Pakistan become 3G is really hard to predict.
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