the-south-asian.com April 2003
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Pakistan – Markets in IT & Telecom Convergent Technologies
CONNECTIVITY = PRODUCTIVITY
This article is based on abstracts from a special Technology report undertaken for the-south-asian.com. The abstracts will be published in 12 parts over the next year. The complete unabridged report is available to interested readers for U.S. $300.00
1.0 Pakistan Telecomm - Introduction, Background History & Statistics .
In 1947 Pakistan’s Telecom sector inherited the British Post, Telegraph & Telephone [PTT] Departments with a miniscule base of 7000 telephone lines. For 30 years this entity lumbered and slumbered with its old mechanical, analog ‘Strouger" switches and analog telephone lines, protected in its monopoly, both local and global. By 1962 this PTT Department was split up into the Telephone & Telegraph Department and the Postal Departments. By 1991 this was further re-organized thorough the PTC Act 1991 opening this public sector to the private sector companies. Licenses were granted for non-basic services where the PTT had no experience base. These were Data Network Services, Paging, Manufacturing of Small Telephone Exchanges [ "Digital Communications" being the first company to do so].
Once [ 1995] the Internet exploded onto the Global Telecom scenario, it was evident that the old Pakistan Telecom monopoly was no longer able to cope with the influx of new revolutionary technologies . As recently as 1994, trained basically in voice telecomm technologies , a Divisional Engineer at a PTCL city exchange could not believe that data could also be sent over a telephone line. By 1995 PTCL General Managers were being advised by private sector telecom companies that Voice Mail and Email should be added to the services offered by PTCL.
The Pakistan Telecommunication Ordinance 1994 provides a legal framework for active participation of the private sector in the development of telecommunication services. The Act also provides a legal base for the establishment of the following :
For Whom the Phones Ring
By 1996 , PTCL management was operating in defense mode trying to play catch-up, which it did well to learn fast. It sent its engineers to various western countries and companies to learn new Data Networking and Internet and Wireless Technologies but the sheer size of this New Wave Technologies was of Tsunami proportions, as the western countries and companies also learned to their discomfort and loss of competitive advantage. It manufactures some basic Microwave technology cards in its factory in Haripur [ TIP].
No indigenous PTC digital telephone telephone exchange design or manufacturing capability was built during 1947 to 2003. Some local software expertise was created by Alcatel in its operations in Islamabad. But nothing took place as it did in India during 1985-1990, when Sam Pitroda , a U.S. venture capitalist and telecom entrepreneur[ originally from Orissa, India— made his money by selling his telecomm company in 1970’s to Rockwell in Chicago, USA . Pitroda found a receptive ear in Rajiv Gandhi . Rajiv Gandhi thanks to his basic telecoms exposure as an Airline Pilot was able to see the importance of an Indian Telecomm industry. Against a similar bureaucratic infra structure to Pakistan’s PTCL , Sam Pitroda created C-DOT [ center for the development of telematics . In doing so the first low-cost, non-air-conditioned , Rural Telephone Exchange [ called RAX]of about a 1000 to 5000 lines was made and later its license sold to many Indian companies. It was also exported to about 30 African and Asian countries earning valuable foreign exchange for India.
The subsequent moves by the PTCL management are noticeable in their "creative destruction" strategy.
PTCL Creative Destruction.- 1995-2003
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