Micronet Broad Band – First Mover Advantage

Chat with Mr. Aqeel Malik, CTO of Micronet Broad Band on the technological changes in the market

What is your educational and professional background?

I have completed my bachelors fromUniversityofLahorein electrical engineering. After graduation, I joined Pakistan Oil Fields. In 1996, I started working in Pakistan Telecommunication Company Limited (PTCL). After working there for 4 to 5 years, we started Mirconet Broadband in 2002.  I resigned from PTCL and started working full time in Micronet. Currently, I am one of the Board of Directors of Micronet.

Please give us a brief summary on Micronet’s Technology?

At present, our company is using two technologies; Digital subscriber line (DSL) and Fiber technology. We are the pioneers of DSL in Pakistan. In 2002, we started providing internet service through DSL. Second technology is fiber technology by the name of Nayatel.

We mainly have two competitors: Pakistan Telecommunication Company Limited (PTCL) and LINKdotNet. PTCL is a big company in terms of finances and it is available in every city, but they are having problems in providing the after sales service. We claim to be better than PTCL in after sale services. Our level and quality of services are far better than PTCL. LINKdotNet has recently entered the market by acquiring Dancom and World Online, owning a good market share.

How do you see other wimax or wireless companies entering in the market?

The other technologies like Wateen, wi-tribe and Mobilink are providing wireless services. They are not our direct competitors because of the technology they are using. Their technologies have a band width of only 1 MB. Moreover, if the customer load increases, the issue of quality of services also arises.

These companies are not our competition in terms of speed. They provide users with only up to 2 MB of speed, but we provide the users a speed of more than 2 MB.

We however have been influenced by PTCL. In DSL customers, there is no loyalty as different companies are providing different packages.

We have a very clear edge in the fiber technology. Our connectivity is on fast Ethernet. In Nayatel, we have the option to give our customers bandwidth ranging from 1 MB to 100 MB. The after sales services of Nayatel are excellent. However, one major bottleneck is market penetration which is our massive upfront cost. Customers have to pay big monthly payments but they have no issues because of the quality of service we are providing. Around 50% of our nayatel customers are residential.

In this field, what are the technological limitations in Pakistan?

If we talk about the internet services, they are not bad. The costs are very high in getting the internet bandwidth from the main source. These companies have started price wars, they are lowering the prices and trying to increase the bandwidth, but they have to cover their costs. Cost cutting comes from the after sales services. Like PTCL has an aggressive marketing campaign, but if there is any complaint from the customer, then that is the consumer’s problem.

Another technological limitation is the usage of copper wires.  The quality of the internet speed is affected in broadband DSL. These days a new company should use copper wires.  New fixed line technologies are using on optical fiber. Copper has a theoretical limitation of 25 MB but practically it is much less than that.

Are there any major technological problems in the fiber optic project?

Yes, there were few issues as many government offices were involved in that project. The Pakistan Telecommunication Company Limited (PTCL) and Water and Power Development Authority (WAPDA) have not followed the proper corridors (path) for their wirings. It was difficult for us to find the right corridor (path) of our wires.

Most of the technology is being imported from other countries. We have developed many products internally with the help of our own skilled workforce.

What are your future plans with the fiber optic project?

As companies are trying to move to 3G and LTE technologies, we are looking to connect the 3G or LTE Provider’s Base Transceiver Station (BTS) with their offices through optical fiber network, so that they can transfer the required bandwidth which would be much higher than wireless networks.

What business opportunities are available for an investor in your field of work?

There are plenty of opportunities in this field of work. One can hire skilled persons from the market and produce products locally which are being imported from other countries. A large investment is not required in these ventures. There are many small products which can be developed locally. For instance if I am importing a cabinet for $ 100, it can only be made for $30 here.

Governments and Universities should provide opportunities for students to be experienced in the corporate sector. We have involved many students in our designing process of the products and then later on we also hire those students. We are helping the students and our selves by designing small products locally to reduce costs. The good students who graduate every year, most of them get jobs abroad and they leave the country because of the overall environment and less opportunities.

Local service providers in telecom sector should identify products that can be made inPakistanand they should work on it by involving other manufacturing units.

InPakistanthere is not much research and development which is used in designing of equipment. We have manufacturers but not designers (engineers/technicians).

We have a scarcity of skilled persons.

Do you think that there is still potential in this field?

If we talk about broad band, yes there is potential in that area depending on the condition that good quality service is provided to the consumers. New companies should focus on their quality of service because in the coming years, even residential customers would require more speed and better quality in internet usage. Moreover, the consumers are becoming more aware of the technologies. New companies should not compete on prices but on the quality of service.