Telecommunication Industry in the world Market:

The global telecommunications market refers to the provision of services

such as broadband internet, mobile internet, wired telephone and mobile
phone as well as standard, cable and satellite television. Telecommunications
companies provide services to various sectors from private individuals to
businesses. They operate in different categories, namely satellite, wireless,
wired and other types of telecommunications businesses. The global
broadband telecommunications industry continues to record strong growth,
with broadband satellite services expected to reach close to $6.4 billion by
2015, reports Global Industry Analysts.
The world mobile broadband market reached $85 billion in 2010, according
to Market Line. The number of industry subscriptions rose almost 47% in the
four-year period ending 2010, with more than 805 million people subscribing
to mobile broadband in 2010. Yearly market growth is expected to slow to
just over 41% between 2010 and 2015 to reach $480 billion.
Telecommunication companies providing Internet Protocol Television can
avail of broadband infrastructure and video compression technology
developments to broadcast live TV signals through private broadband
networks. The past decade of TV was about delivering the consumer a sitback experience and a push feed for the operator/service provider. Since
2000, we saw major changes in the world of TV as the global economies
were shifting from Analog to Digital Content. IPTV was becoming a big buzz
in the field of entertainment and since then, IPTV market has continuously
increased. As per our research, internet applications, for instance, VoIP, IPTV
and VOD, e-government: G4C (government for citizens), HTS (home tax
service), GePS (government e-purchasing service), e-education: Educational
Broadcasting system (EBS) broadcasting high school, education programs via
the internet, online video and gaming, E-banking, ubiquitous network, Ebusiness Integration (eBI) are fostering the need for high technological
convergence and interoperability. Globally, IPTV represents an opportunity
for telecommunication companies looking for new revenue streams beyond
data and voice services. With the necessary broadband infrastructure in
place and availability of new video compression technology, there is an
opportunity for broadcasting live TV signals to a television set or a PC via
private broadband networks. Besides, most IPTV markets have not reached
saturation, so there are many opportunities for growth.

 Key Market Segments:

The world fixed line telecommunications industry contracted by 1% in 2010
to just over $550 billion, reports Market Line. The market is expected to fall
almost 5% by 2015 to just over $524 billion. The markets volume is
expected to record an 8% drop between 2010 and 2015. Voice only
represents the leading market segment at more than 57% of the overall
market. The Americas hold just over a 34% share of the world fixed line
telecoms market in terms of value. Japan-based NTT Group is the number
one company in the fixed line telecoms market, accounting for over 13% of
the overall market in terms of value. RNCOS states the EU is the leading
regional market in the global IPTV market. The EU will likely be overtaken by
Asia-Pacific in terms of growth with rising numbers of subscribers and higher
service revenue. It is expected there will be close to 110 million IPTV
subscribers worldwide in 2014, representing 25% yearly growth between
2011 and 2014. The global Internet audience continues to grow rapidly, with
the worldwide base of broadband Internet users (including fixed and
wireless) in the 3 billion range as 2015 began. This vast base of high speed
Internet users encourages businesses to innovate in order to offer an everevolving array of online services. Sectors that are growing very rapidly online
include the sale of entertainment products, event tickets, travel, and apparel
and consumer electronics. Even groceries have finally moved into the fast
lane, as online grocery sales are growing quickly in the U.S.A. The most
powerful trends on the Internet include access via wireless devices, the
migration of entertainment to the web and cloud-based software as a
service. Today, consumers are more focused than ever on finding the best
prices, as consumer attitudes and shopping habits changed dramatically as a
result of the 2007-09 recession.

Trends that will shape the Telecom Sector by 2020:

Global Telecom industry will witness growth, a CAGR of 9.1 percent over the
period 2012-2016. Top key factors contributing to the market growth is
unlimited demand for bandwidth in wireless networks. Global Telecom
industry will also be witnessing an increased preference for greener
technology. Currently, there are 4.6 billion mobile users globally, and 1.7
billion Internet. Researchers forecast that by 2020, the number of mobile
users will reach 6 billion and the number of people accessing the Internet will

reach 4.7 billionprimarily through their mobile devices. The average person
in 2020 will live in a web of 200 to 300 contacts, maintained daily through a
variety of channels. By the year 2020, an entire generation will have grown
up in a primarily digital world. Computers, the Internet, mobile phones,
texting, social networkingall will be second nature to them. And their
familiarity with technology, reliance on mobile communications, and desire
to remain in contact with large networks of family members, friends,
business contacts, and others will transform how we work and how we
consume. This is the demographic group we call Generation Cthe C
stands for connect, communicate, change. Year 2020 will witness more than
half of employees at bigger corporations will work on virtual project groups.

Following trends are going to Re-shape the telecom

sector by 2020:

Rise of Cloud Services: Cloud-based offerings from telecom operators and

ICT providers will grow in future. Cloud Computing market size is expected to
grow by $241B by 2020. Decentralized computing, requires flexible, reliable and
secure connectivity solutions else No cloud without a network.
Wireless Network Infrastructure 2020: It will be driven by the

flourishing ecosystem, in coming 6 years, TD-LTE infrastructure

investments on macro cell and small cell equipment are expected to grow
at a CAGR of 15% and eventually reaching $13 Billion by the end of 2020.
Mobile traffic forecasts 2010-2020: Worldwide mobile traffic is
expected to reach more than 127 EB by 2020, representing a 33 times
increase compared with 2010. From 2010 to 2020, total daily mobile
traffic in the representative Western European country will grow 67 times
from 186 TB to 12540 TB. Well, it may lead to network congestion. But,
Operator will have a range of options having a significant impact on
CAPEX. They will also need to adapt backhauling capacity (FTTx, new
microwave links) and should opt for Traffic prioritization along with
improved Radio Access Network.
Mobile M2M: M2M (Machine to Machine) Industry to hit $4.5T by 2020.
M2M technology is beneficial in many ways and is applicable to a number
of industries and technologies. The most frequent examples include
automotive safety such as sending out a distress signal at the moment
a car impacts another car or object with GPS coordinates. The same
possibilities in healthcare and in other sectors are equally helpful. M2M
industry in India has the potential to reach $100 million by 2016. M2M
works as remedy for the basic challenges faced by India in terms of lack
of infrastructure for healthcare, education, banking etc. It could bring

about radical change in the traffic congestion, accidents, emergency

services, payments systems, ticketing etc.
The Telecom Consumer in 2020: Rapid progress in the affordability
and accessibility of technology will reshape the telecom consumer by
2020. Advancing telecom technologies will impact consumer behavior in
various ways like Consumer lifestyle will be impacted by greater
affordability of information and communications technology (ICT) goods
and rising awareness like Google Glass and Toshiba digital mirror. It
will be reflected through "smart homes", households that are integrated
with ICT, becoming relatively common by 2020, while handheld devices
will incorporate more tools, such as bank cards and car/house keys.
Enterprise Mobility Will Become $140 Billion Market by 2020: The
Enterprise ready App Market is expected to become as big as the Internet
by 2020. Later in this year we will see global mobile application download
have growth reaching up to 18.7 billion. National Association of Software
and Services Companies (Nasscom) released a report that predicts the
global enterprise mobility market will rake in $140 billion a year by 2020.
This means 15% annual growth in revenue for the next seven years. The
report suggests that the existing spend by enterprises on mobility will
grow to 10-12% of the total IT spend by 2020. Right now, that figure is
less than 5%. Impact of Enterprise Mobility will increase where in mobile
wallet market is expected to reach $5,250 billion by the end of 2020,
growing at a CAGR (compounded annual growth rate) of 127.5% from
2013 to 2020. The global mobile wallet market has been segmented into
applications like: mode of payment, stakeholders and geography. The
global mobile wallet applications market includes mobile commerce,
mobile ticketing, mobile coupons, mobile transfer, and micropayments.
On the basis of mode of payment, the global mobile wallet market is
categorized into remote and NFC (Near Field Communication) payments.

Asia - Key developments moving into 2015:

With some 3.3 billion Asians using mobile phones - almost half of the
number of mobile subscribers in the world spread across a diverse range
of markets, the region is already rapidly advancing in its exploiting of
mobile data/wireless broadband services. This will provide the basis for
key developments into 2015. Growth across Asia in high speed access to
the internet by mobile wireless has been largely driven by highly
competitive markets combined with boldness in the embracing of new
generation mobile technologies. With 3G and 3G+ platforms extensively
covering the region, mobile broadband services are already well
established. The rapid take up has been underpinned by increasingly

cheaper smartphone prices and lower airtime tariffs combining to support

even wider adoption. And now, of course, we have 4G/LTE providing a
fresh impetus, especially in the regions pace-setting markets.
Symptomatic of this impetus we are seeing exponential growth in data
usage in the major markets. This explosion in mobile data is set to
continue.
At the other end of the market, there are the laggards. A number of
countries in Asia have been slow to issue 3G licenses and/or have fallen
into regulatory difficulties. Obviously the underlying issues are already
being addressed; the coming year will no doubt see an ongoing effort by
governments, regulators and operators to ensure that these markets
overcome the various shortcomings and problems that have confronted
them. This report looks at initiatives and developments already started in
Asia during 2013 and that are set to further evolve in 2015 and beyond.
The issues discussed provide a clear view of the focus across the various
countries of the region and clearly demonstrate what can be expected to
take place over the coming year or so.

Telecommunication Industry in Pakistan. An Overview:

In Pakistan, currently five cellular mobile operators i.e. Telenor Pakistan,
Pakistan Mobile Communication Limited (PMCL/Mobilink), PTML (Ufone),
Warid Telecom and China Mobile Pakistan (CMPak) are providing services
using GSM technology whereas the sixth operator i.e. Instaphone was
providing CDMA services had its license cancelled in 2011. All the GSM
operators have also launched GPRS/EDGE services. In the core network,
some operators have deployed and some are in advanced stage of
deployment of R4/NGN network. As a result of progressive network rollout by
the operators, the facilities are now available to over 95 % population of the
country. In Azad Jammu and Kashmir (AJ&K) and Gilgit Baltistan (GB), there
are six cellular mobile operators, the five above are Pakistani GSM operators
and Special Communication Organization (SCO) providing services. SCO is
the incumbent mobile operator since 2003. After the earthquake of 2005,
mobile licenses were issued to operators of Pakistan. Now, the AJ&K and GB

are at par with the Pakistan in terms of mobile facilities & competition in the
sector. The operators have covered most part of the AJ&K and also extended
services to main localities of GB. Now, as a result of this, mobile services
with data facilities are available in far flung mountainous areas of the
country. The process for Next Generation Mobile services Award will
commence soon.
Pakistans telecom market had been struggling for a long time with the
transition from a regulated state-owned monopoly to a deregulated
competitive structure. The government set out plans to increase fixed-line
teledensity from 2.5% at the end of 2002 to 7% (around 10 million fixed
lines) by 2010. This target became impossible to achieve in time and by
2012 the fixed subscriber base was actually declining. After peaking at 4% in
2008, fixed penetration had fallen to 3% came in by the end of 2014. In the
meantime, though, the focus had changed; the whole telecom landscape in
Pakistan had shifted with the phenomenal expansion of the countrys mobile
market. Over the same planning period 2002 to 2010 the number of
mobile subscribers jumped from less than two million to 100 million. Despite
a tightening of the national economy during 2009 the mobile market
continued to expand at an annual rate of between 5% and 10%. And it had
increased to 140 million by end of-2014. (The market had even sustained a
contraction over that period following the tighter control of registration of
SIM cards.) While mobile penetration had reached 75%, internet penetration
remained low. Broadband growth had almost been negligible for some years,
but 2008/09 saw the start of a promising upsurge in broadband
subscriptions. This pattern in broadband growth looked to be continuing,
boosted by the spread of competition throughout the market and the steadily
increased adoption of mobile broadband solutions. The granting of 3G
licenses and the first moves on 4G services in 2014 was certain to see the
mobile broadband segment move into major expansion mode. GSM
technology is currently used by the mobile operators in Pakistan, and Next
generation Technologies will now be preferred like UMTS/LTE. The Federal
Government has issued policy directive for auction of Next Generation Mobile
Services Spectrum Award, where spectrum in 2100MHz, 1800MHz and 800
MHz (For new entrant only) will be auctioned in an open and transparent
auction process. Information Memorandum and draft license templates have
been prepared and published. The auction is expected to be conducted in
end of April 2014 which will ensure that Pakistani telecom consumers will be
able to use the latest communication technologies in coming months.

Overall telecom indicators remain positive in 2014:

In term of total telecom revenues, each passing year saw increasing trend
but Rs.465.5 registered in 2014 were the highest in last 11 years. The
telecom revenues registered during 2003-04 were Rs.116.8 billion. During
the above mentioned year, the revenue registered from cellular mobile
phone were Rs322 billion, Local Loop Rs88.8 billion, Long Distance
International (LDI) Rs43.6 billion, Wireless Local Loop (WLL) Rs6.2 billion and
Value Added Services (VAS) Rs4.1 billion, the latest provisional stats issued
by Pakistan Telecommunication Authority (PTA).
The other indicators for Pakistan's telecom industry during the year 2014
showed that teledensity increased to 79.8 percent, telecom investment
crossed US$ 1.816 billion including US$ 903 million Foreign Direct
Investment (FDI) inflows and broadband penetration crossed 2 percent mark.
With regard to telecom contribution to national exchequer, the stats revealed
that this sector is a significant source of revenue generation as during the
last three years, telecom sector was contributing an average of Rs124.8
billion annually to the national exchequer in terms of taxes, regulatory fees,
initial and annual license fees, activation tax, and other charges.

Telecom sector contribution in Government Revenue

Tax:
During 2014, telecom sector has contributed an all-time high Rs243.5 billion,
annually to the national exchequer in terms of taxes, regulatory fees, initial
and annual license fees, activation tax, and other charges. This much
contribution is due to auction of 3G and 4G cellular mobile licenses in April
2014.
PTA has deposited to the government Rs96.5 billion out of the total value of
US$ 1.11 billion of the Next Generation Mobile Services spectrum auction
and the remaining amount of US$ 147.5 million along with markup @
LIBOR+3 percent per annum will be paid by the operators in equal annual
instalments in the next five years. Effective from July 1, 2014, Federal
government reduced GST/FED on telecom services from 19.5% to 18.5% and
Withholding Tax (WHT) from 15% to 14%. This tax reduction is applicable to
Islamabad, Baluchistan, FATA, AJK and Gilgit Baltistan regions. The provincial
tax departments of Punjab, Sindh and Khyber Pakhtunkhwa did not reduce
taxes.
In term of telecom investments, in year 2014, cellular mobile operators
invested US$ 1.790 billion on account of acquiring 3G and 4G spectrum and
deployment of advanced telecommunication networks. The overall telecom
investment reached US$ 1.815 billion in 2014. PTA auctioned spectrum in
April 2014 for 3G and 4G cellular mobile services from which significant

further FDI was received. The auction concluded with a total value of US$
1.11 billion. During year 2014, record imports of US$ 544 million of cellular
mobile handsets and US$ 682 million worth of telecom equipment was
witnessed, registering growth of 20.7 percent and 30.3 percent respectively.
Overall, the telecom imports crossed the mark of US$ 1.23 billion, of which
44.4 percent is for the imports of consumer items i.e. cellular mobile
handsets.
Telecom Companies Spending and their Contribution in National Exchequer
in Pakistan as per bellow:

 Key developments:

Tighter restriction on number of SIMs permitted per person introduced by

PTA;
The PTA held the auction of 3G concessions in April 2014;
One 4G license was sold at auction at the same time;
The year 2014 saw a series of 3G network launches with all four licensees
operational by July;
Zong launched its 4G offering the first of its kind in Pakistan in
September 2014;
Total investment in the countrys telecom sector picked up in fiscal 2013
after hitting a low point in 2012;
Pakistan has launched its first communications satellite, Paksat-1R;
By 2013 the broadband subscribers was expanding at a strong rate of
around 25% annually;
PTCL announced plans in 2013 to help fund a new submarine cable
system linking the Far East to Europe;
A task force from the National Response Centre for Cyber Crimes (NR3C)
had shut down more than 30 illegal VoIP providers in 2013.

Telenor Company Background & History in Pakistan

Telenor Pakistan is 100% owned by the Telenor Group, an international
provider of high quality voice, data, content and communication services.
The official opening of Telenor Pakistan was held in Islamabad with former
President of Pakistan General Pervez Musharraf as guest of honor and a
Telenor delegation headed by President & CEO Telenor Group Jon Fredrik
Baksaas along with then CEO Telenor Pakistan Tore Johnsen.

The company acquired the GSM license in 2004 and began commercial
operations
on
March
15,
2005.

So far, it has invested over USD 2.3 billion in the local economy and has
created 2,400 direct and 25,000 plus indirect jobs. It also has a network of
over 200,000 retailers, franchises and sales & service centers, thus providing
means of livelihood to thousands of Pakistanis. Telenor Pakistan has reported

a subscriber base of over 36 million, making it Pakistan's second largest

mobile operator.
Over Rs. 147 billion in various forms of direct and indirect taxes have been
contributed to the national exchequer by Telenor Pakistan since the
beginning of its operations in 2005. Telenor Pakistan's corporate
headquarters are in Islamabad, with regional offices in Karachi, Lahore,
Faisalabad, Multan, Hyderabad and Peshawar. Following are the Services of
Telenor in Pakistan;
Mobile Financial Services
Telenor Pakistan acquired 51% of Tameer Microfinance Bank in November
2008 and in 2009, launched Pakistans first and to date the largest Mobile
Financial Services with the brand name of 'Easy paisa'. In February 2014,
Easy paisa won two GSMA awards at the Mobile World Congress in Barcelona
Spain. It was honored the Best Mobile Money Service in the World and Best
Mobile Money Service for Women in Emerging Markets.'
Internet Services
Telenor Pakistan took part in the spectrum auction held on April 23, 2014 and
acquired the license to launch 3G services in Pakistan for USD 147.5 million.
With the ambition of bringing INTERNET for all, the company started
aggressive rollout of 3G services across urban and rural areas of Pakistan.
Today, Telenor Pakistan is the fastest growing 3G network in Pakistan and
expanded the 3G coverage area to 45 cities by the end of October 2014.
Telenor Pakistan currently serves over 1.3 million 3G customers across
Pakistan.
Telenor Pakistan provides also wide EDGE connectivity across the country. It
has one of the largest data networks (GPRS) in Pakistan providing Internet
services to customers.
Corporate Social Responsibility (CSR)
Telenor Pakistan contributes to society through selected social investments
that are focused on everlasting change in areas like; Disability, Education,
Health, Emergency Response and Employee Volunteerism.
Currently, Telenor Pakistan is partnering with Plan international to
rehabilitate 44 partially damaged, flood affected, government middle schools
across Pakistan to benefit more than 10,000 students. PKR 145 million have
already been allocated to improve the infrastructure of school buildings,
provide water sanitation & hygiene (WASH) facilities, construct IT labs, install
solar electrification and in house maintenance of the facilities. The school
improvement plan also includes teacher/student training on use of ICT for

EDUCATION and improved conceptual clarity through Telenor m-learning

service as well as e-education content.
Khuddar Pakistan is Telenor Pakistan's flagship corporate responsibility
program which aims to create dignified opportunities for persons with
DISABILITIES. The purpose is to become the most disabled-friendly
organization in Pakistan in terms of employment, service, and community
support.
Operations of Telenor in Pakistan:
Areas: Telenor covers more than 3,500 cities and towns throughout
Pakistan. The company has over 8,000 3G-ready cell sites throughout the
country and offers GPRS.
Sales and Distribution: Telenor Pakistans distribution network has over
200,000 touch points across Pakistan that include company-owned customer
sales and service centers, franchises, Sahulat ghars and retailers that offer
GSM products and Easy paisa services.
Third Generation Services: Telenor Pakistan is providing 3G services as
the company has acquired a 3G license in an auction that took place on 23
April 2014 in Islamabad, Pakistan and expanding services rapidly. Telenor
Pakistan has Pakistan's largest 3G coverage currently in 73 cities.
Mobile Banking and Easy Paisa: In 2008, Telenor acquired majority shares
of Tameer Microfinance Bank Limited for its mobile financial services
project. They named the branchless banking service "Easy paisa" and
launched it in October 2009. In a country of over 190 million people, with
only 10,000 bank branches and approximately 15 million bank accounts,
Easy paisa was Pakistan's first branchless banking deployment aimed to
increase access to financial services for the people of Pakistan, with over
25,000 Easy paisa shops across the country. It was also reported by CNN as
the "model to follow" in launching mobile banking services.
Easy paisa is Pakistans first and largest mobile money service and third
largest in the world, catering to 6 million customers every month. It currently
has over 40,000 agents in 750 cities and towns across Pakistan. Moreover, in
October 2014 Telenor Easy paisa has introduced 3 types of accounts for
every class of users. They have named them as Level-2 Basic Account, Level2 A Type Account, Level-2 B Type Account and Level 2 C Type Account, all
accounts have their own deposit limit and distinct rules.

Telenor Pakistan won Awards:

In 2011, it won the Prime Minister of Pakistan Trophy for Largest Foreign
Direct Investment (Telecom Sector) which was awarded by the Lahore
Chamber of Commerce and Industries.
Telenor Pakistan & Tameer Microfinance Banks Easy paisa was awarded
the Shaukat Khanum Social Responsibility Award 2011 by Shaukat
Khanum Memorial Cancer Hospital & Research Centre, Lahore.
Easy Paisa has also won the Best Mobile Money Transfer Entrant of the
Year Award at the worlds first Mobile Money Awards in 2011.
Easy Paisa was declared as the third largest mobile money service in the world by Consultative
Group to Assist the Poor (CGAP) in 2012. That was a global partnership of 34

organizations housed in the World Bank whose goal is to advance financial

inclusion.

Telenor Pakistan was presented the "Best Place to Work Award" by

Pakistans HR associations; and the Best Practices Award, presented by
The Data Warehousing Institute.
Telenor Pakistan has also won the "Super brand of the Telecom Industry
Award", a recognition supported by the international brand arbiter Super
brands that operates in 55 countries.

Key Executives of Telenor Pakistan:

Mr. Michael Patrick Foley is the Chief Executive Officer.

Mr. Gabor Kocsis is the Chief Financial Officer.
Mr. Jan Fredrik Baksaas is the Chief Executive Officer of Telenor Group and
President of Telenor Group.
Mr. Irfan Wahab Khan is the Deputy Chief Executive Officer and Chief
Marketing Officer.
Mr. Khurrum Ashfaque is the Chief Technology Officer.

Earning Results of the Telenor Pakistan for the First

Quarter of ended March 31st 2015.
Telenor Pakistan reported earnings results for the first quarter of ended
March 31, 2015. Total revenue was approx. to 2 billion against approx. to 1.4
billion last year. EBITDA before other items was approx. to 0.9 billion against
approx. to 0.5 billion last year. Operating profit was approx. to 0.6 billion
against approx. to 0.4 billion last year. Capital expenditure approx. to 0.3
billion against approx. to 0.2 billion last year. Total revenues in local currency

increased by 10%, mainly due to growth in the subscription base, increased

revenues from incoming international traffic and financial services. Capital
expenditure increased due to further expansion of the 3G network with more
than 900 sites added during the quarter, thereby expanding the 3G coverage
to 78 cities.

Mission of Telenor:
We exist to help our customers get the full benefit of being connected. Our
success is measure by how passionately they promote us.

Vision of Telenor:
We provide the power of digital communication, enabling everyone to
improve their lives, build societies and secure a better future for all. Our
vision to empower societies is a clear call to action. We bring vital
infrastructure, new services and products that stimulate progress, change
and improvement.

Values of Telenor for Customers:

Our values serve as a guide for our everyday work. They describe how we
should serve our customers and work together as colleagues. In this Regard
we must be;
Respectful: We acknowledge and respect local cultures and want to be a
part of local communities wherever we operate.
Keep Promises: We are delivering, not overpromising. We are about
actions, not words.
Make It Easy: We dont complicate things. Everything we produce should
be easy to understand and use.

Be Inspiring:

We find new ways to improve and create value.