2004 South Asian Infrastructure, Fixed Voice and Data Market

Report Description
This annual report offers a wealth of information on the Infrastructure Fixed Voice and Data markets in Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, Sri Lanka. Subjects covered include:
Infrastructure Issues
Regulatory issues and government policies re infrastructure
Datacomms Infrastructure, Leased Lines, ISDN
Public and Value Added Data Services
Leased Lines, ISDN, Frame Relay, ATM
Brief overviews on all of the major telecommunications carriers and service providers in the region

Category
Telecoms & Computing Annual Research

Executive Summary

Key Highlights
After 20 years of war and civil unrest, Afghanistan now has a chance to start a recovery process. Telecommunications will certainly play a crucial role in the effort to rebuild the country’s shattered economy and society. The telecommunications infrastructure that has survived does not even support a properly functioning network. It will be a huge task to establish national telecommunications coverage.

There are few computers in Afghanistan and many areas do not have electricity. There is no accurate information on how many Internet users there are in the country. Those that have Internet access have been going online using telephone lines provided by neighbouring Pakistan.
By June 2003, growing off a low subscriber base, the country’s mobile network was increasing at a remarkable annual rate of more than 600%. Penetration was a low 0.2%.

Bangladesh is one of the poorest, most densely populated, least developed countries in the world. Apart from its lowly economic status, major impediments to growth have included frequent cyclones and floods, as well as the inefficiency of its state-owned enterprises and the slow implementation of much-needed economic reforms. These factors impact on the building of the country’s telecom infrastructure and the regulatory reforms in the sector.

Low fixed-line telephone penetration in Bangladesh is partly due to the fact that at least 68,000 villages remain isolated outside the major cities. More than 90% of Bangladesh’s telephone services are located in urban areas. Dhaka and Chittagong, the two major cities, have 15 million people with only 250,000 fixed phone lines.

By contrast, the mobile market in Bangladesh has been almost doubling on an annual basis over the last two to three years. If the government continues the deregulation process and more mobile operators are licensed, it is predicted that there will be around 10 million mobile subscribers in the country by 2006.

The Internet came late to Bangladesh with connectivity in 1996. In the last few years it has started to grow dramatically, although obviously from a very low base. With an estimated user base of more than 350,000 by the end of 2002, representing only a 0.3% penetration, the local Internet industry is preparing to move into the next stage of its development. The country’s first broadband service was launched in June 2001 using DSL technology. A cable modem service was also offered at about the same time. But, for the time being, broadband services remain a minor component of the country’s Internet market.

Until relatively recently, Bhutan was isolated in terms of its telecommunications capability, the country’s mountainous landscape having been a barrier to the development of any sort of infrastructure. Whilst the country had a basic connection to the outside world as early as 1974 with the introduction of trunk calls between Bhutan and India, it was not until 1999 that telecom services started developing. Over a 4-year period to 2000, this country of less than a million people invested US$15 million in telecommunications infrastructure to provide a modern fixed-line network.

Bhutan has been without a mobile network. However, in November 2003, the government initiated Phase One of what was called the ‘b-mobile’ network. It planned to connect the vast majority of Bhutan’s remote mountainous territory to a mobile network by the end of 2006. The network was set to initially provide coverage for five major towns including the capital Thimphu.

After a late start, Bhutan has been cautiously embracing the Internet. The Bhutan Government and the United Nations Development Program (UNDP) signed a project agreement in March 1999 to support the development of DrukNet, the country’s first Internet Service Provider (ISP).

India has a large telecommunications network comprising 29,000 exchanges. With its 42 million fixed line subscribers representing a teledensity of only 4%, the country has achieved a remarkable coverage with an estimated 98% of the population having access to a telephone. Despite the enormous investment in telecommunications infrastructure over the last decade, servicing the huge population has presented difficulties. Even the booming mobile phone market is still less than 3% penetration.

Domestic fixed-line telephony had traditionally been the preserve of the state-owned MTNL and BSNL. In 2001, the Indian government threw open the whole fixed-line telephone business to an unlimited number of operators in each of the 21 telecom circles. Prior to this, only one private company had been allowed to compete with an existing state-run player in each circle. VSNL, the former monopoly provider of international telephony, lost its exclusive status in April 2002 when the market was opened to competition.

Growth in India’s mobile telephone sector, from a humble beginning in the mid-1990s, has really picked up pace in the past few years, aided by higher subscriber volumes, lower tariffs and falling handset prices. Now home to a clutch of global mobile operators working with local companies, India’s mobile market has been experiencing annual growth of more than 100%. Analysts predict that the market will continue to grow strongly, moving at a compounded annual rate of more than 50%.

Despite the considerable popular interest in Internet in India, the Internet Service Provider (ISP) market has been in disarray. According to the telecom regulator, there were 189 operational ISPs in the country, but 10% of the ISPs have 90% of the subscribers. The growing popularity of cybercafes has been playing a big role in fuelling Internet development in India. Whilst there is tremendous enthusiasm amongst the dial-up users, an estimated 60% of users regularly access the Internet via the country’s 9,000 cybercafes. But the take-up rate of high-speed broadband Internet access has been slow. By end-2003, broadband subscribers accounted for less than 4% of the total Internet subscriber base.

The Maldives boasts an efficient, up to date telecommunications system. In fact, the country’s telecom infrastructure is excellent, the Maldives boasting one of the most advanced communications systems in the region. Through the recent efforts of Dhiraagu, its monopoly telco, there is now full telephone service coverage of the archipelago. As well as the fixed-line network, the company also operates a GSM cellular mobile service and was, until recently, the country’s sole licensed provider of Internet service. A second ISP licence was issued in 2002. The move took advantage of the fact that Dhiraagu’s exclusive licence did not include Internet, thus providing an ideal starting point for the government’s plans to liberalise the wider telecommunications market.

The country’s mobile market has been grown quickly, boosted by Dhiraagu’s prepaid service offering. By March 2004, out of a total subscriber base of about 75,000, there were just over 60,000 prepaid mobile subscribers.

Telecommunication services have been growing steadily in Nepal over the last decade, but supply has not been able to meet demand, some 50% of which remains unmet. Rural services have been neglected, as they require higher investments in infrastructure. More than 60% of the telephones remain concentrated in Kathmandu, more than 98% of the population has no telephones, and 55% of villages still have no access at all. A number of factors have been slowing development. Nepal’s topography has made it extremely difficult to develop the telecommunications infrastructure. The country has been struggling under the adverse economic situation caused largely by political instability. The activities of the rebels operating throughout the country had also been a serious and direct threat to telecom infrastructure. Despite the difficulties, the country has made progress in its effort to meet the growing demand for telephone services. A second national mobile licence has been awarded and, under the terms of the licence, the operator has an obligation to invest at least 15% of its revenue in rural areas.

The licensing of a relatively large number of ISPs, combined with the liberalisation of the VSAT data market, has created excellent conditions for the Internet to thrive in Nepal. On a positive note, the population have been able to access Internet for some of the lowest prices in the region.

Since 1990 the number of fixed-line services in Pakistan has almost quadrupled. However, the majority of working lines are in urban areas, but 70% of Pakistan’s population lives in rural areas. A more balanced distribution needs to be considered for the longer term. Efforts by the government of Pakistan to promote the development, modernisation and diversification of its telephone infrastructure over the last decade have met with mixed success.

The government has been trying to stimulate growth in the data communications segment of the market. Data communication network licences have been issued to 15 operators and the cost of high-speed data transmission for software houses and information technology companies has been cut to make Pakistan the cheapest country in the region for bandwidth transmission. Despite all this the market remains sluggish.

With an annual growth rate of the order of 70%, the mobile market in Pakistan is experiencing a period of strong and sustained development. Subscriber numbers have increased from 68,000 in 1996 to 3.3 million by end-2003. However, by international standards, penetration remained very low at around 2%, suggesting that there was plenty of room for further expansion.

Although Internet access has been available in Pakistan since 1995, Internet penetration was still under 2% by early 2004. Following the military regime of General Pervez Musharraf taking control of the country in October 1999, an aggressive IT policy was pursued, aimed at boosting Pakistan’s drive for economic modernisation and creating an exportable software industry. Whilst this has been helping boost the popularity of the Internet, there is a long way to go.
The broadband Internet market in Pakistan is almost non-existent.

Sri Lanka’s telecommunications sector has been struggling to develop in the difficult context of a nearly two-decade-long conflict between the government and separatist Tamil Tiger rebels. With the hope of an enduring peace and a general improvement in the country’s social and economic wellbeing, the telecom sector is well positioned for vigorous growth. Some major initiatives have been put in place to boost the building of national infrastructure and open the market to more competition. While still far from adequate, Sri Lanka’s telecommunications infrastructure has already been improved thanks to liberalised policies that have rapidly allowed significant private sector participation. The Bureau of Infrastructure Investment (BII) has been the primary authority for promoting and developing private sector participation.
Within a highly competitive market, the overall annual growth in mobile services has been running in excess of 30%. Although mobile penetration is relatively low at 7%, the number of mobile subscribers has already raced past the number of fixed-line services and is set to continue this strong growth. The market has no doubt benefited from the competition that comes with having four operators competing with each other, despite the fact that one of these – MTN – has around 60% market share.

Internet and other forms of data services have been starting to take off in Sri Lanka, but coverage and accessibility is limited (Internet user penetration is less than 2%) and the sophistication of the services available remains low. Until 1999, there were only six Internet Service Providers in Sri Lanka. The number has jumped to 23 and includes a number of innovative operators. Early moves to offer broadband Internet in the country have met with limited success and it will be some time before there is a viable broadband market.

Table of Contents

1. OVERVIEW OF FIXED VOICE, INFRASTRUCTURE AND DATA MARKET
1.1 Key developments
1.1.1 General
1.1.2 Infrastructure
1.2 Market overview
1.3 Telecommunications infrastructure
1.3.1 Overview
1.3.2 International infrastructure
1.3.3 Satellite networks
1.4 Data market
1.4.1 Overview
1.4.2 ISDN
1.4.3 Frame Relay and Leased Circuit
1.4.4 ATM
1.4.5 Value Added Networks (VANs)
1.4.6 VSAT networks

2. AFGHANISTAN
2.1 Telecommunications market
2.1.1 Overview of Afghanistan’s Telecom market
2.2 Fixed network operator
2.2.1 Afghan Wireless Communications Co
2.3 Telecommunications infrastructure
2.3.1 Overview
2.3.2 Infrastructure projects

3. BANGLADESH
3.1 Telecommunications market
3.1.1 Overview
3.2 Fixed network operators
3.2.1 Bangladesh Telegraph and Telephone Board
3.2.2 Bangladesh Rural Telecommunications Authority
3.2.3 Grameen Telecom Co
3.2.4 Sheba Telecom
3.2.5 Other operators
3.3 Telecommunications infrastructure
3.3.1 National telecom network
3.3.2 International infrastructure
3.4 Data market
3.4.1 Data infrastructure and services

4. BHUTAN
4.1 Telecommunications market
4.1.1 Overview
4.2 Fixed network operator
4.2.1 Bhutan Telecom
4.3 Telecommunications infrastructure
4.3.1 Domestic
4.3.2 International

5. INDIA
5.1 Telecommunications market
5.1.1 Overview
5.1.2 Growth forecasts
5.1.3 Foreign investment
5.1.4 Universal service
5.2 Fixed network operators
5.2.1 BSNL
5.2.2 Bharti Telenet
5.2.3 Hughes Telecom
5.2.4 MTNL
5.2.5 Tata Teleservices Ltd
5.2.6 Reliance
5.2.7 International operators
5.3 Fixed network market
5.3.1 Overview
5.3.2 National long-distance market
5.3.3 International market
5.4 Telecommunications infrastructure
5.4.1 National telecom network
5.4.2 National infrastructure
5.4.3 International infrastructure
5.4.4 Infrastructure development
5.5 Data market
5.5.1 Data infrastructure
5.5.2 Data services

6. MALDIVES
6.1 Telecommunications market
6.1.1 Overview
6.2 Fixed network voice services
6.3 Telecommunications infrastructure
6.3.1 Domestic
6.3.2 International
6.4 Data market

7. NEPAL
7.1 Telecommunications market
7.1.1 Overview
7.2 Fixed network operator
7.2.1 Nepal Telecommunications Corporation
7.3 Fixed network voice services
7.3.1 International
7.4 Telecommunications infrastructure
7.4.1 Introduction
7.4.2 Domestic and international infrastructure
7.4.3 Wireless Local Loop (WLL)
7.5 Data market
7.5.1 Data infrastructure

8. PAKISTAN
8.1 Telecommunications market
8.1.1 Overview
8.2 Fixed network operators
8.2.1 Introduction
8.2.2 Pakistan Telecommunication Company Limited
8.2.3 WorldCALL Telecommunications Group
8.3 Fixed network voice services
8.3.1 International voice traffic
8.3.2 International prepaid calling card services
8.3.3 Value-added voice services
8.3.4 VoIP
8.4 Telecommunications infrastructure
8.4.1 National telecom network
8.4.2 International infrastructure
8.4.3 Submarine cable networks
8.4.4 Infrastructure developments
8.5 Data market
8.5.1 Data infrastructure
8.5.2 Data services

9. SRI LANKA
9.1 Telecommunications market
9.1.1 Overview
9.2 Fixed network operators
9.2.1 Overview
9.2.2 Sri Lanka Telecom
9.2.3 Suntel
9.2.4 Lanka Bell
9.3 Telecommunications infrastructure
9.3.1 National telecom network
9.3.2 International infrastructure
9.3.3 Telecom City Project
9.4 Data market
9.4.1 Overview
9.4.2 ISDN

10. GLOSSARY OF ABBREVIATIONS

Exhibit 1 – Major submarine cables in the Asia-Pacific region - 2004
Exhibit 2 – Satellite launches in Asia region – 2003 and beyond
Exhibit 3 – APT satellites in orbit – April 2004
Exhibit 4 – AsiaSat satellites in orbit - 2004
Exhibit 5 – BSAT satellites in orbit - 2004
Exhibit 6 – JSAT satellites in orbit - 2004
Exhibit 7 – New Skies satellites in orbit (Asia footprint) - 2004
Exhibit 8 – PAS footprint
Exhibit 9 – Major telecommunications players
Exhibit 10 – ISRO satellite network - 2004
Exhibit 11 – PTCL subsidiary companies
Exhibit 12 – Joint ventures and affiliated companies
Exhibit 13 – Telecommunications system operator licensees

Table 1 – Top 10 carriers in the Asia Pacific region – July 2002
Table 2 – Total WLAN equipment forecasts for Asia – 2003 - 2007
Table 3 – Asia Pacific ISDN growth – 1998 - 2003
Table 4 – Telephone network statistics – 2002
Table 5 – Main telephone lines in operation – 1994 - 2002
Table 6 – Distribution of telephone lines - 2002
Table 7 – Telephone network statistics – 2003
Table 8 – Fixed telephone line targets – 2010; 2025
Table 9 – Fixed-line growth – 1995 - 2003
Table 10 – Telephone network statistics – 2003
Table 11 – Telecom revenue and investment statistics – 2002
Table 12 – Fixed-line growth – 1995 - 2003
Table 13 – Telephone network statistics – April 2004
Table 14 – Telecom revenue and investment statistics – 2002
Table 15 – Telephone services to villages - 2003
Table 16 – Basic services by operator – 2003
Table 17 – Fixed-line subscribers* – 1996 - 2003
Table 18 – Fixed-line subscribers by operator – 2003
Table 19 – Fixed-line growth – 1995 - 2004
Table 20 – Growth of VPT scheme – 2002 - 2003
Table 21 – Limited mobility subscribers – 2002 - 2003
Table 22 – Limited mobility subscribers by operator – 2003
Table 23 – International undersea cable capacity – 1997 - 2004
Table 24 – Telephone network statistics – 2003
Table 25 – Telecom revenue and investment statistics – 2002
Table 26 – Fixed lines in service – 1995 - 2003
Table 27 – Fixed-line distribution and subscribers – 2003
Table 28 – Telephone services to inhabited islands – 2002
Table 29 – Telephone network statistics – 2003
Table 30 – Telecom revenue and investment statistics – 2002
Table 31 – Fixed-line growth – 1995 - 2003
Table 32 – Telephone demand forecasts – 2007; 2012; 2017
Table 33 – Telephone services to villages – 2001
Table 34 – Telephone network statistics – 2004
Table 35 – Telecom revenue and investment statistics – 2002
Table 36 – PTCL network status – March 2004
Table 37 – Growth in Public Call Offices – 1999 - 2003
Table 38 – Fixed lines in service – 1991 - 2004
Table 39 – Telephone services to villages* - 2003
Table 40 – Telecom revenue and investment statistics – 2002
Table 41 – Telephone network statistics – 2003
Table 42 – National network status – 2003
Table 43 – SLT subscribers – 1999 - 2003
Table 44 – Suntel subscribers - 1999 - 2002
Table 45 – Lanka Bell subscribers – 1999 - 2002
Table 46 – Fixed lines in service – 1995 - 2003
Table 47 – WLL subscribers – 1996 - 2003

Date Published：2004-8-3

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