M. Somasekhar

Recently in Islamabad

While India and Brazil with over $4 billion and $5 billion, respectively, collected under the US Funds (Universal Services), grapple with how to use them to improve telecom services in rural areas, Pakistan with a much smaller fund seems to have made good progress.

Pakistan has been able to spread and roll out services from its roughly around annual $200 million fund under its focussed rural telecom and eServices programme, said Mr Parvez Ifthikar, Chief Executive Officer (CEO) of Universal Service Fund (USF), based in Islamabad.

The USF has targeted 12,000 un-served Mauzas (of the total 60,000) in the country this year. A Mauza is the smallest, administered unit in Pakistan. Having divided under 26 lots for promoting rural telecom, the bidding process has been completed for 10 lots and sold, he told an Expert Forum Meeting on Mobile 2.0, organised by LIRNEasia, a Sri Lanka-based telecom think-tank recently.

Interestingly, while in India, a telecom operator has to contribute 5 per cent of its annual revenue to the USO Funds, Pakistan charges much less at 1.5 per cent. In India, the funds go to the national budget and the Department of Telecommunications has to make projects to source them, in Pakistan a separate company has been created to utilise the funds.

Renewable energy mandatory

In a bold move, the Pakistan Telecom Authority, the telecom Regulator has made it mandatory that all bases stations being set up with support from the USF should be ‘Green Sites' or renewable energy powered, especially solar and wind as the case may be. The reason being that there is currently, a huge shortage of electricity in rural Pakistan.

In India, renewable energy players, especially the solar energy industry has been making a strong plea that solar power should be encouraged to power the telecom towers in rural areas and the USO (universal services obligation) Funds could be utilised for it.

The USF has also taken up a project to lay OFC cable network in 31 Tehsils. About 8,000 km of cable route was needed, Mr Parvez told Business Line.

USF structure

One of the reasons for the early take off of the utilisation of USF in Pakistan could be attributed to the creation of a separate entity registered as a company with 50 per cent private sector participation on the 10-member board. It has a Chief Executive Officer, in Mr Parvez Ifthikar, who was earlier country head of Siemens Telecom.

Broadband Services

Pakistan launched the broadband services in 2009. It now has about 50,000 connections and has targeted to reach out to 450 towns. Already five agreements have been signed with operators, he said.

At present, the country's broadband penetration level is lowest among the neighbouring countries. With the special focus on development of these services, the target is to reach 59.65 million subscribers by end of 2014 from the 643, 892 at the end of December 2009.

(This article was published in the Business Line print edition dated May 7, 2010)
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