Muhammad Saleem Shaikh has joined Apna Microfinance Bank where he has been nominated as Director of the bank to be approved by State Bank of Pakistan in the coming weeks.

He is likely to be given key position at Apna Microfinance Bank to expedite banking operations throughout the country.

Saleem Shaikh was CEO of the Rozgar Microfinance Bank which was acquired with 100 percent shares by Pakistan Telecommunication Company Limited at Rs 100 million to launch its branchless banking under the name of U-Microfinance Bank to be managed by Ufone, its subsidiary.

He left Rozgar Microfinance Bank after change of management/ownership and appointment of new CEO Mian Shaukat Arif Sirhandi at U Microfinance Bank.

AMFB is a private commercial microfinance bank licensed by State Bank of Pakistan under the Microfinance ordinance 2001 to operate in Karachi district in 2005. As of June 2012, it has 696 active borrowers, gross loan portfolio of Rs 28.7 million, 16,838 active savers with value of savings at Rs 130.7 million.

The bank has maintained its long-term and short-term entity ratings on the index of Pakistan Credit Rating Agency (PACRA) as “A3″ (A Three). Meanwhile its outlook for the ratings declared as remain “Positive”.

These ratings denote an adequate capacity for timely payment of financial commitments. The ratings of AMBL reflect expanding business operations, albeit gradually, followed by successful rebranding activity. The bank, in line with its revised business strategy, intends to obtain provincial level license within the current year. For this purpose, the sponsors are in the process of exploring options to inject fresh capital in the bank, including induction of a new equity partner.

Mobile phone handsets imports have recorded significant decline of 50 percent in the month of April after the Federal Board of Revenue (FBR) had imposed General Sales Tax (GST) of Rs 1,000 to Rs 500 on each unit of smartphone and medium/low end handset.

The mobile phone imports recorded at Rs 3.819 billion or $38.84 million in April which were stood at Rs 7.576 billion or $77.25 million in March 2013, Pakistan Bureau of Statistics (PBS) Reported.

Local market dealers and retailers said that the sales of mobile handsets did not continue its pace as it dropped more than 60 percent to less than one million units in April from 2 million recorded in March 2013 after the impact of taxes were imposed on customers.

Federal Board of Revenue (FBR) issued a SRO 280(1)/2013 imposing taxes of Rs 100 on each unit of Smartphone and Satellite phones and Rs 500 other than Smartphones which are medium or low end handsets.

It stated that Smartphones having features of touch screen, dual core, 5 or higher mega pixels camera, 4 GB Memory will be taxed at Rs 1,000 per units. Also, mobile phone sets having operating systems such as Android, iOS and etc,. Blackberry will also be taxed at Rs 1000 per handset.

Besides medium and low-end mobile phone handset will be charged at Rs 5,00 per unit. In addition to these taxes, the import duties have been increased to 5 percent from 1 percent.

It seems that mobile phone imports will continue to record drop in imports and sales however it will likely to be improved in the months to come on the customers’ demand and price adjustment.

The advent of latest technologies and demand of mobile handsets in the country has surged its imports and sales significantly as consumer of different age and income groups could utilize mobile phone service.

The demand and sales of mobile handsets have been increased due to availability of affordable mobile handsets in the market not because of high purchasing power of the customers, he said. The price of technology got increased through different brands of handsets though it is necessity of people not a luxury.

The mobile phone imports declined to 76 percent during the July to March in 2008-09 subsequently the government imposed Rs 750 custom duty on all type of mobile phones.

The imports value declined to US $139.480 million in Jul-March 2008-09 as against US $581.807 million in 2007-08.

However the government reduced the duty to Rs 250 per set besides the imports of handsets has been made through China under FTA in which Rs 15 per handsets are being charged till now.

Pakistan is one of the top leading markets of mobile phone handset sales due to huge population. It is volumetric market, no doubt, with 80 percent mobile phone handsets fall below the price range of $100 per unit.

Reference

FBR Rationalizes Tax On Telecom Sector

No New Taxes on Mobile Phone Handsets

GST on Handset and SIM

Pakistan Telecommunication Authority (PTA) has planned to roll out femtocells infrastructure network for cellular phone operators to introduce high speed internet or data services through their customers at reduced capital and operational cost which will not only increase their penetration to the customers at reasonable charges but it will also control the utility of spectrum in collaboration with its owners.

A femtocell is a small and low-power cellular base station, typically designed for use in a home or small business. It connects to the service provider’s network via broadband (such as DSL or cable). The current designs typically support two to four active mobile phones in a residential setting, and eight to 16 active mobile phones in enterprise settings.

Consumers, on the other hand, could benefit from improved coverage and potentially better voice quality and battery life.

The rising trend of smartphone among the customers and their need of speedy bandwidth is the issue in Pakistan since the expected launch of 3G services have yet to be made. On the other hand, cellular phone operators are looking for options to lessen their expenses to provide high speed data services at competitive rates.

The deployment of femtocell network could serve the purpose of the customers and cellular phone alike before the launch of 3G services if the industry stakeholders mainly landline and cellular phone operators agree to launch new technology based on high speed internet.

The telecom authority has sought feedback of the industry stakeholder to roll out the new network through adjustable regulatory requirement to facilitate service providers.

The present regulatory regime encompasses on a split licensing regime, such as LDI, FLL/WLL, Cellular and Value Added Services. As per this setting, separate license for local loop and cellular service exist, however, no converged/unified license is in place which allow any operator to provide both these services.

The telecom regulatory study stated that the cellular operator can have an interconnection agreement with the broadband provider for delivery of femtocell based services to the end user. The responsibility of broadband will be borne by the fixed line operator whereas other portions of the network by cellular operators. This also means that the broadband connection be of standard and will ensure uninterrupted services to the end user.

The cellular operator can provide femto based services through existing DSL/ Broadband connection of the end user without going into any interconnect agreement with the ISP/Broadband service provider, however performance of such services will not be the responsibility of cellular services provider or the ISP provider, however other means to ensure continued service must be thought of, it stated.

There are integrated licenses held by PTCL, NTC and SCO. For instance, PTCL fs license covers many services including, local loop, LDI and value added services. Being the incumbent in fixed line sector, PTCL fs effect on overall market is significant. This will be the driving factor for transport of femtocell traffic over broadband.

Since the femtocells deployment means merging of mobile network and fixed network, the existing licensing regime is split over service based categories, therefore it will be of concern how the two operators (Fixed line and Mobile) will cope up.

However the merger of two operators for the deployment of femtocell network could be possible through inter-operator service level agreements and mergers and acquisitions between two companies.

Whereas inter-operator agreements between fixed and mobile are concerned, the certain elements of the whole network and services will have to be defined to the extent of responsibilities of each operator towards delivery of femtocell solution.

In the second scenario of mergers and acquisitions, this could result in companies having both fixed and mobile licenses. Mergers & acquisitions can be seen across the globe, and in a way helpful for those operators who want to provide multiple services and hold multiple licenses, in such an event it will be worth a look at a possibility of introduction of unified licenses.

PTA study said that spectrum holders and license holders can be relieved from having separate licenses for femtocell deployment. Other than this, no other entity can be allowed to establish, maintain or deploy femtocells even if they do not hold cellular license.

However, entities having fixed local loop licenses having interconnect for backhaul with the cellular operators can be allowed to install such devices having cellular operator on forefront for making application for permission from the telecom watchdog.

The complete study of the PTA could be viewed here

Pakistan Telecommunication Authority (PTA) has said Zong to delay its launch of Long Distance and International (LDI) calls operations for a couple of months till the hiring of top level executives are not carried out by the new government.

Officials sources at Zong said that PTA had responded the cellular phone operators recently on the response of its application for LDI license saying the authority is clueless to take action on cellular phone request as there is no decision making official at the regulator that could proceed the process of license bidding and auction.

It seems that new government will be formed in a month but the appointment of the members and chairman of authority will be taken place in the subsequent months. Afterward, the process of bidding and auction of license will be carried out which could take two to four further months.

Zong has reapplied for LDI license in April 2013 which is estimated to provide an earning to the country for the upfront cost of $0.6 million besides recurring revenues in terms of Access Promotion Contribution (APC) and annual charges.

The Chinese based operators is one of the fastest growing network in terms of subscribers since the current years though its average revenue per users stood low among different operators of the industry.

We have planned to continue our investment in the country but none is here in the government that could take investor seriously and facilitate them in the pursuance of their business plans, Zong official said.

Zong’s subscribers are surging on each coming days however it failed to provide them international calling service on their network at reduce cost, rather it paid heavy amount of calls and SMS to different operators having LDI license and network.

LDI license will be a big business venture of Zong because it will provide the company various opportunities to earn handsome revenues in the future. We can launch international calling services and enterprises solutions to corporate sectors within two months if license is awarded to us in near future, Zong official added.

The Cabinet Committee on Regulatory Bodies put a watch hold on the new licensing since 2006, which has been still intact despite the period of seven years have been completed on March, 23, 2013.

Zong approached telecom authority again after five years in order to scale up its business through different telephony and corporate services.

The management is looking forward to availing license of LDI in two regions as the contract between the two nations has been ended as if March 23. The acquisition of license by Zong will enhance its revenue streams, curtail in operations and better service of international calls to its customers at competitive rates.

Zong management has requested the government to review its demand and implement the recommendation of cabinet committee as a due right of investor which will help strengthen confidence in Pakistan’s government and allow telecom operators to continue their investment plans in future.

The cellular operator initially requested for the license back in 2008, which has been approved by the then federal cabinet and parliament as well. However the license has not been awarded to Zong after lapse of five years due to strategic deal between Pakistan and UAE on the privatization of Pakistan Telecommunication Company Limited (PTCL) by Etisalat.

A software developed by a class 9th student from Lahore has won silver medal in the e-biko International Project Olympiad held recently in Ankara, Turkey.

Muhammad Abdullah Abid son of Muhammad Ismail Abid, a student of PakTurk School Lahore developed a software ‘Rush Hour Controller’ which can change traffic signals according to the number of vehicles on the road after collecting data through a normal webcam.

Subsequently, he was sent to participate in the global information and communications technology competition where 176 projects from 48 countries including USA, Thailand, India, Afghanistan, Turkey, Nigeria, Albania, Brazil etc. were presented.

Abid stood second in the category of software development to bag second prize and additional reward of US 300 dollars from the organisers of the contest.

His software uses a webcam or any security cam to take pictures of roads continuously, it calculate the number of cars on the roads and give more green light time to the rush direction.

If a road is empty, the programme gives less time to green light and more to red one. It also caters for pedestrians and send signal to drivers if road is blocked.

This programme can also be effetely used in car parking, if a parking areas is empty it send SMS to  registered drivers by using SMS while it has an FM radio option too to send audio message to drivers. The programme sends SMS and radio signal to police if it finds something suspicious.

Commenting on the success, Director Education Pak Turk Kamil Ture said that a general symbol of development is technology which helps individuals and societies meet their needs more easily.

Societies having completed their technological developments and keeping up with the age have higher levels of life and culture.  Like many innovations, technological innovations should be firstly conveyed to education institutions, said Ture.

We should encourage ambitious of Pakistani students to become technology literates to build the future with their dreams.

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Ufone a leading cellular company in Pakistan launched ‘Uth Pack’, which has been tailored specially for the youth. Uth Pack is designed to target the urban youth which is looking for a lot more than just Voice, SMS and Data. The focus of its positioning “On Kar” revolves around the digital at heart and for those who wish to have a redefined cellular service.

Uth Pack is the country’s first youth centric offer which is offering a wholesome product that is far beyond just the basic cellular offerings. The addition of numerous affinity partners offering discounts in more than 250 branded outlets across the country make this the most triumphant brand in the country. The discounts being offered are sure to ignite the lifestyle value for the youth and shall help save ones pocket money with the amazing discounts being offered.

Salman Wassay, Chief Commercial Officer, Ufone said ‘On Kar’ is a belief of today’s youth which will enable them to shift their life in to top gear. Whatever they do is backed up by energy and self-drive and will help give their best for everything. From enjoying life, living the young at heart fun moments to being socially responsible and extending their helping hand in the society, the ‘On Kar’ belief gives our youngsters a hope and a lot of positive energy.

The launch of Ufone’s Uth package is going to bring to the Pakistani youth an amazing & unmatchable bouquet of offers and surprises, which will delight our youth and offer them a cost effective package that will surely bring a smile on their faces, he said.

Muhammad Rafiquddin Mehkari has stepped down as President and CEO of Askari Bank after serving it for more than two decades since the commercial launch of the bank with his crucial role for the commencement of branchless banking services with Zong “Timepey”.

M R Mehkari with his team has played a tremendous role to launch branchless banking with Zong at rapid pace expanding business operations of the bank and partner Zong towards a new direction last year.

He is one of the pioneer members of Askari Bank. His career spanned more than 40 years of international and domestic banking.  In 1971, he started his career with UBL and in December 1974. He carries extensive experience in all banking dimensions including operations, treasury, fund management and investment banking, in international and domestic banks.

M. R. Mehkari is joined State Bank of Pakistan on secondment and performed as Director, Exchange Policy Department from April 2000 to April 2004, where he took several major initiatives like liberalizing Foreign Exchange Regime etc. He was also a member of Corporate Management Team and Monetary & Exchange Rate Policy Committee at State Bank of Pakistan.

Mehkari is also a member on the board of Khushali Bank and Askari Investment Management Limited, a subsidiary of Askari Bank. His reason of resignation has not been confirmed yet but is reported that he will be inducted in the financial team of the new government or he may join different bank in Pakistan or abroad.

He has been replaced by Tahir Aziz as acting head who has been serving the institution as SEVP of Corporate & Investment Banking Group (CIBG).

Acting President and CEO joined Askari Bank in 2005. He was also responsible for the formation of the Corporate Banking as a distinct business from Commercial/Branch Banking, and positioning it as one of the bank’s largest and fastest growing businesses.

Prior to his current assignment,  Aziz was with Union Bank Ltd. where had had joined after working several years at the ANZ Banking Group (ANZ). At ANZ he gained rich experience by leading large transaction undertaken in Australia, United Kingdom, and the Middle East.

He was also a member of the ANZ’s Global Risk Management team, which consisted of select members from the bank’s global resource pool that developed and implemented a proprietary Risk Integration Model that was used by ANZ to evaluate and monitor the bank’s project and structured finance and large corporate assets globally.

LDI operators are seeking support of the new government to avoid penalty and support for the establishment of ICH through policy decision of Ministry of Information Technology and Telecommunication (MoITT) and Pakistan Telecommunication Authority (PTA).

LDI operators and PTCL in particular will convince the government to back them in order to attract investment mainly the transaction of $800 million on the account of pending privatization amount and different expansion projects.

Though it seems that the formation of International Clearing House (ICH) again will be difficult for the new government as CCP had nullified it subsequent orders of Supreme Judiciary, and the government as well will not be interested to form a system that hurt overseas Pakistanis. But the penalty might be waived or to be deferred for the long time period with the involvement of policy-makers.

Competition Commission of Pakistan (CCP) issued its verdict for nullifying the arrangement of ICH arrangement on April 30^th which means the period of half months has been over with a month left to deposit penalty amount, otherwise, an additional Rs 100,000/day penalty will apply on each of the LDI operators after the deadline expires.

Besides, LDI operators have the option to appeal before a Tribunal comprising a retired Supreme Court and High Court Judge with two other various representatives also comprising the bench. However industry players  suggest that the Tribunal option is not in effect and that an appeal of the  penalty imposed and nullifying of the ICH agreement but going into Tribunal will linger on the matter as it has been the case recently  with Fertilizers (FFC, Engro) and, in the past, with Cement manufacturers.

So, though it will be a ‘wait and see’ game in the coming days to know the legal medium the LDI operators use to appeal against the decision and what further can be speculated next in the ICH saga, what is most pertinent is to note that the ICH level incremental rates will continue to be charged despite CCP order and penalty.

With the added support of MoITT and PTA, both of whom had given the initial orders of the implementation of the ICH to LDI operators (they also collect higher Access Promotion Charge from higher call rates), this can be viewed as significantly positive.

Another possible argument in favor of the LDI operators is that int’l incoming and outgoing calls in Pakistan have been historically relatively lower vis-à-vis other countries, with several countries perators even charging incoming calls which has discontinued long back.

It is dissapointing to note here that new ICH call rates is still prevalant in the industry as the caretaker government failed to implement the orders of CCP backed by Supreme Court of Pakistan, which could be deemed as contempt of court.

LDI operators are still charging an average USc 8.8/min from an average USc 2.04/min average Jan-September 12.

The traffic of and outgoing and incoming calls dropped significantly by 228 percent to 592 million monthly minutes in February 2013 from 1,946 million in September 2012.

Cellular phone operators have failed to provide timely information to voters on the dedicated SMS service “8300” through their networks due to heavy traffic of inquiries by the subscribers for polling.

A number of mobile phone customers complained that they were unable to get responds against the SMS sent to code number of Election Commission of Pakistan (ECP) facing difficulties to search their polling booth through technology. Instead, they went for various camps of political parties or different sources to know the places of voting in their constituencies.

Zafar Ullah, a senior citizen said he did not receive SMS from ECP despite made several attempts on the dedicated number of ECP although he did not make any mistakes.

I sent an SMS on 8300 with CNIC number on early hours of the elections’ day but I have not received SMS afterwards which seemed the mobile phone services or information system of ECP got chocked or blocked.

A youngster, Ahmad Rashid, said that he did not get reply SMS from ECP on his network for many hours however he took help of his friends to reach the polling station on the day of elections.

It is merit mentioning here that Ishtiaq Ahmed Secretary ECP pointed out in various media briefing that ECP received high inquiries through SMS from voters but the cellular phone operators’ capacity is limited to entertain them.

He said that ECP processed 40 million requests through SMS a day before elections that went increasing on the elections’ day. He added that overall 50.5 million queries were recorded via SMSes by voters to know their voting booth.

It is disappointing that cellular phone companies’ quality of services to facilitate customer in the high time remained poor at the time when the nation got aware of adopting technology for information but unfortunately like many different moments in the past, they could not avail the benefit of technology due to limited capacity of mobile phone operators.

Previously the mobile phone companies showed bad quality of services on the occasions of Eid days due to their failure of managing heavy traffic of SMSes on their networks. Even few of the companies suspended their bundle packages not only to earn revenues but to avoid congestion of high text traffic on their networks.

Telecom sector analysts said that mobile phone companies witnessed congested on networks because of high demand of voice and text communication since a day before election to conclusion of polling process.

They added political parties and mobile phone users’ demand of SMSes already crossed to 1 billion per day but the SMs service of ECP has made their network incapable to provide respond to the customers and voters.

Cellular phone operators should update their networks for providing standard services to their customers on special occasions but they are reluctant to enhance their capacity against one time expenses, Saeed  Azfar.

He said the complaints of bad services were reported in the urban and populated areas particularly in Karachi, Lahore, Peshawar, Faisalabad, Islamabad and different metropolises where the turnout of the voters become surged significantly to cast their votes.

Azfar said that BTS towers of the mobile phone companies have specific limit to route SMS but if the number of request by the customers increases, the system sees congestion of text delivering late or no SMS in response to customer’s query.

Despite poor services, mobile phone users have made millions of rupees after earning huge revenues from voice calls and text mainly because of high communication needs in the country.

Cellular phone operators have incurred a loss of more than Rs3.75 billion through blocking of 15 million unregistered, unauthorized and unused SIMs on the directives of Pakistan Telecommunication Authority (PTA) in the past few months.

The operators losses of these SIM from their networks primarily on the account of activation charges of Rs 250 per SIM paid to the government from their own pockets on the behalf of their customers who are no more with them due to illegal ownerships and prolonged inactivated subscriptions.

The operators were asked to expedite the process of rectifying the data of the subscribers along with cleansing of the unauthorized SIM from the overall base in order to prevent misuse of SIM and keep control over criminal activities in the country.

The directives were made in the end of November 2012 by the outgoing government in the high level meeting of CEO’s with the then Prime Minister Raja Pervaiz Ashraf in which they agreed to update data of their customers while eliminate all subscription which have been unregistered.

Sources inside PTA said that five mobile companies identified subscribers of 20 million out of 123.5 million SIMs on their networks however they have failed to complete their tasks and continue to work on the rectification of the data till yet.

The operators have blocked millions of SIMs of the identified number of SIMs and initiated aggressive drive to bring back their customers through calls and SMS warning subscribers to avoid blocking of SIM through registrations at their respective franchises.

As per PTA data, the companies have provided them data of the reactivated and deactivated SIMs which was done in the period of December 2012 to February 2013 however the operators continued to add new subscribers as well and pay extra activation taxes to retain their bases.

The operators previously added almost 2 million new customers ahead of the deadline month after that they were not allowed to sale their SIMs at retail shops but they were given permission to sale SIM at franchises and customer care centers. Hence they invested Rs 50 million with the addition of SIMs.

The number of overall cellular phone subscribers decreased to 120.9 million by February-end from 121.9 million from November 2012 which showed that all operators lose their customers who were not documented in their systems.

Meanwhile, the cellular phone operators have continued  their drive to registered SIMs on the CNIC of the person having connection in use. In this regard, the cellular operators have been doing extra efforts at their franchises and call centers to meet the target of update data of 20 million SIMs.

Industry sources said that cellular operators are reluctant to contract their bases in documentation because of their position in the industry hence they could not block such a big number of illegal SIM despite awareness drive on media , SMSes and calls.

They added the operators have been buying time in the recent months because the interim government did not follow-up the process started by previous government on the high demand of former interior minister Rehman Malik.

The telecom watchdog may take strict action against the operators having failed to comply with the orders of the authority which was issue of deep concern to control the bad law and order situation through misuse of mobile phone.