broadband book

Broadband Book

Document Revision History

Date Version Prepared By Reviewed By Approved By

Copyright © 2008, Wateen Telecom of 94Private & Confidential Information PLM 1.3.0.1 v1.0

Table of Contents

1. Introduction................................................................................................................4

1.1. Document Objective......................................................................................................4

2. Executive Summary.................................................................................................52.1. The Executive Summary................................................................................................5

3. Market Problem and Opportunity...........................................................................83.1. Market Problem.............................................................................................................8

3.2. Market Opportunity........................................................................................................9

4. Platform Description..............................................................................................114.1. OFC............................................................................................................................. 11

4.2. FTTX............................................................................................................................ 25

4.3. DSL.............................................................................................................................. 29

4.4. VSAT........................................................................................................................... 31

4.5. WiMAX.........................................................................................................................34

5. Market Overview and Analysis.............................................................................405.1. Market/Customer Overview.........................................................................................40

5.2. Market Size.................................................................................................................. 40

5.3. Market/Customer Segmentation..................................................................................46

6. Competitive Advantage.........................................................................................516.1. Competitive Advantage................................................................................................51

7. Barriers to Entry.....................................................................................................547.1. Barriers to Entry...........................................................................................................54

7.1.1 Marketplace Barriers to Entry....................................................................................547.1.2 Advantageous Barriers to Entry.................................................................................56

8. Competitor Analysis..............................................................................................598.1. Competitor Analysis.....................................................................................................59

8.2. Competitor Reaction....................................................................................................66

8.3. Company Counter Reaction........................................................................................67

9. Products / Service Offerings.................................................................................699.1. Products / Services offered..........................................................................................69

9.2. Product/Service Delivery.............................................................................................72

9.3. Customer experience...................................................................................................72

9.4. Bundling of Products....................................................................................................73


10. Customer Support Strategy.................................................................................7410.1. Customer Support Channels.......................................................................................74

11. Sales and Marketing Strategy..............................................................................7511.1. Target Customer..........................................................................................................75

11.2. Platform.......................................................................................................................75

11.3. Sales Channels...........................................................................................................75

11.4. Marketing Strategy.......................................................................................................76

12. Impact Assessment...............................................................................................8212.1. Business Impacts.........................................................................................................82

12.2. Operational Impacts.....................................................................................................82

13. Risk Assessment...................................................................................................8313.1 Platform Risks.............................................................................................................83

14. Financial Outlook...................................................................................................8614.1. Financial costs.............................................................................................................86

14.2. Financial Outlook.........................................................................................................89

15. Conclusions and Recommendations..................................................................9215.1. Conclusions.................................................................................................................92

15.2. Recommendations.......................................................................................................92

15.3. Platform Delivery Project Responsibility......................................................................92

16. Review and Approval.............................................................................................9316.1. Review Process...........................................................................................................93

17. Supporting Data.....................................................................................................9417.1. Assumptions................................................................................................................94

17.2. Research Information..................................................................................................94

17.3. Platform Diagram/Architecture.....................................................................................94


1. Introduction

1.1.Document Objective

This document outlines a business case, a key document, used by

management, to define, assess and evaluate the best approach to

strategize broadband business in Pakistan. This business case examines

the potential business opportunity, problems, competition, plan of actions

to achieve company objectives.


2. Executive Summary

2.1. The Executive Summary

Remembering TIME (Telecommunication, Information, Media and

Entertainment) concept given by CEO of Wateen Telecom couple of

years back, it is evident that digital divide in Pakistan can only be

minimized by achieving sustainable competitive advantage (SCA) in

broadband industry.

We have to ensure that:-

A small businessman should have high speed connectivity to compete

its counterpart in Korea, Japan or India

Students need reliable and speedy internet access to download state-

of-the-art animated tutorials

Entertainment downloads are available at cheaper rates

Digital prosperity kicks-in. It will not happen by accident, nor by

continuing the inertia, rather it will get materialized if we are smart

enough to leverage on our telecommunication infrastructure

This digital river we call broadband is the driving tool that can quench

our thirst for economic progress

Encourage investors to put their valuable money to bring-in quality

content, as presently content is not available in domestic

infrastructure and even if available, it is not in local language

Backhaul charges need to be at reasonably low levels as new

bandwidth providers expand and competition increases

Wireless access, like WiMAX, WiFi-mesh, Edge and EvDo etc. are

still in nascent stage in Pakistan and there are no affordable offerings

in the market

FTTx is a limited concept , targeted at high ARPU customers

VSAT is targeted toward Carriers and remote areas

Availability of low-priced CPE (customer premises equipment). Cable-

Modems, DSL terminals, media converters, etc. are now available at

relatively low cost, mainly due to global downward price trends. On


the other hand, Wireless CPE’s at affordable prices for average users

in Pakistan are not available as of yet

Sales force performance must match technological & product

improvements. Customized sales force (ladies sales force to hit

consumers in residential areas so they can interact with housewives)

will be helpful.

Create “Talk-Value” through TV shows, road shows, sponsorship (like

sponsoring of movie “Ramchand Pakistani”) by Wateen Telecom

Ensure that technological edge is converted into viable products

Create an impression of association. Just like “Indigo”, Wateen’s broadband platform should create a sense of platform giving birth to “Family Products”

Hit national segments. This can be done through reseller model

Identify emerging segments. Through broadband platform, housewife

segment can be attracted by making arrangements for “Beauty &

Fashion tips” either through phone line service or internet. It may

include guidelines on hair style, life style, quality personality etc

Seizing the opportunity by converting needs of the masses into

revenues. So it will be a win-win situation for both firm as well as

customers

Benchmarking needs to be done. For example different KPI’s need to

be developed for utility sales, staff/revenue, business centre head

count etc against known brand in telecom services

Promotional schemes are required to create a “buzz word” about

Wateen broadband services from all platforms. These motivational

campaigns can bring in positive word of mouth.

Advertisement alone is not sufficient. It must be supplemented by

sophisticated sales force, product availability (standard & tailored).

Last but not least, following proverbs reflect indicative roadmap for

Broadband:

“If you don’t have a competitive advantage, don’t compete”

-Jack Welch, GE


“If you don’t have strategy, you will be permanently reactive and part of

somebody else’s strategy”

-Alfred Toffler, the well-known futurist


3. Market Problem and Opportunity

3.1. Market ProblemBroadband can help accelerate socio-economic development by efficient

and cost effective access to information. It is an accelerator of economic

development because it provides:- easy and cost effective access,

provides direct and indirect benefits ranging from increased productivity,

creativity in job performance, more knowledge, economy jobs, bundling

of new services, higher efficiency gains, computer and network-related

equipment uptake, enhancement in skill based e-business takeoffs and

other ICT related services.

But we have to come out of dreams and dig out associated constraints

and come up with doable initiatives. On demand side we have factors like

affordability (prices), skill and uptake (low literacy rates, absence of social

capital), poor availability of local content and poor availability of quality

and need-based e-services. On supply side, constraints include; non-

availability of dependable power supply, relevant wireless coverage and

spectrum, quality of access and low corporate absorption strength.

Talking particularly about broadband penetration in Pakistan, it is evident

that this country is underserved. Different initiatives by Government of

Pakistan, in the form of USF, and entry efforts by different Telcos are

encouraging but not satisfactory. Businessman should be given an

opportunity to keep in contact with business community round the world.

On other hand, a student should have the privilege to download academic

literature. All this desperately requires broadband infrastructure.

Broadband being engine for economic-growth in country needs to be

proliferated. Market needs reliable, secure and in-expensive “always-on”

broadband platform.

Following are key pain pints related to broadband penetration:-

Right mix of features and pricing to appeal to consumers.


Business users require ubiquitous coverage.

Users are very interested in a wireless broadband service that will

allow them to connect multiple devices under a single service

plan.

Consumers require a service that can meet both their at home and

away Internet needs.

Wateen Telecom being pioneer in wireless broadband can create history

by fulfilling gap between demand and supply through multiple service

platforms: FTTx, Wi-MAX, VSAT, DSL etc. The broadband market

landscape shows that there is enormous opportunity to grow and

pioneering Wateen has wide scope to play its inning. The company has

been successful in brand activation through mass media advertisement.

Positioning is also there, i.e. customers perceive that Wateen is going to

cater for their broadband requirements. But challenge lying ahead is how

to optimize network and service offering, how to tackle customer

acquisition issues, customer support and after sale support. All these

factors are critical in broadband penetration in Pakistan and it is also

crucial for Wateen Telecom to enhance its market share.

3.2. Market OpportunityThe telecom industry is one of those richly interesting points in its history

where many different types of migration seem to be happening at the

same time. In the service provider back office, there is the migration to

the era of customer self-maintenance, in which automated network

management and remote self-service capabilities are changing how

broadband service is activated and administered. In the network core,

carriers are migrating to IP multimedia subsystem architectures that are

simplifying how different types of communications traffic are treated,

creating a more structurally open and operationally efficient network

environment. And at the access level, carriers are continuing to migrate to

new forms of broadband access, Wired: FTTx, DSL, HFC and Wireless:

WiMAX, CDMA, VSAT etc being among the latest.


Wateen Telecom Pvt. Ltd is in a position to capitalize on its assets &

capabilities (in the form of presence of national footprint comprising of

country-wide IP/MPLS core, SDH/DWDM based optical transmission

backbone, metropolitan optical fibre networks, well-accepted HFC

network in DHA Lahore). Company can get “first mover” advantage by

capturing major chunk of broadband market as company possesses all

infrastructure required to help broadband take-off is in place. Following

statistics are snapshot of broadband penetration in Pakistan.

Total broadband subscribers : Approx. 180,000

Wireless subscribers : Approx. 40,000

Overall penetration in Karachi : 0.319 %

Overall penetration in Lahore : 0.48 %

Overall penetration in Islamabad : 0.6 %

Smaller cities haven even 0% penetration or second degree of decimal on

maximum at best. Total landline line telephony is 4.5 Million and WLL are

2.3 Million.

Market size is assumed to be 1.6 Million by year 2010 and company has

enormous opportunity to create competitive advantage in broadband in

accordance with 1 % penetration as anticipated by Govt. of Pakistan by

year 2010.


4. Platform Description

4.1. OFC

Platform Description

Long Haul

The Long Haul Network was conceptualized in order to overcome

limitation introduced by PTCL’s outdated and congested network

for Warid traffic. The Optical Fiber Connectivity (OFC) network

was intended to act as a strategic advantage for Warid over its

competition and provide abundant capacity to ensure quality of

service for Warid Telecom.

Costing a total of $100 Million in capital expenditures, this fully

redundant trunk provides long distance data/voice transfer, out

running PTCL’s long haul in terms of both pricing as well as

quality. The total length of the Optic Fiber Trunk is 5,500 km, with

the ring being self healing. The Hybrid G652/G655 fiber for the

long haul trunk is imported directly from France, with the trunk

being designed with 24 pair fibers kept in mind. A total of 71 cities

are covered, catering to not only the telecom industry’s

requirements but also other media intensive activities such as

video transfer and data management.

Metro Network

Fiber Infrastructure is the backbone of any carrier. It is the asset of

the company buried in the ground as its value is achievement of

transport levels of 40 Gbps on a single pair of Fiber Spur. Cellular

Operators demand Extensive fiber footprints within Metropolitan

areas to stream capacities on these networks and pay a very high

cost to achieve quality which outlines a major retention plan for

their customers.


Objective of a fiber infrastructure in the Metro would be to provide

highest quality transport and communication needs to carrier

clients for data communication over a quality national scale

infrastructure owned and operated by Wateen. In result, Wateen

guarantees to ensure quality in businesses planned in Metro

Cities for its own products and services complimented.

Platform Objectives

Wateen Telecom focuses to de-monopolize PTCL in the carrier market

and offer high speed, reliable solutions at competitive prices.

Wateen intends to offer a secure networking solution to all those

companies in Pakistan who want to exchange data between different

geographically dispersed locations over fiber optic cable. These

companies require high-speed and reliable data connectivity and consider

it a strategic competitive advantage over their competition.

Strategic Alignment

Wateen Telecom is in a business of offering solutions, dark

fiber/managed capacity, over optic fiber as the core medium along with

Fiber/WiMAX/Ethernet Bridges as the last mile options. The above

mentioned products focus on the usage of same infrastructure,

comprising of the investment already made, targeting the carrier market

with minimal incremental costs.

Platform Delivery

Long Haul

Network Readiness


Point-to-Point and Protected Point-to-Point ProtectionJust as it normally takes a pair of wires to deliver electricity,

similarly, a pair of fibers is needed to deliver network connectivity.

In many common network scenarios, however, you may find that

you actually want more than two fibers; although in a pinch you

can actually make do with only a single fiber. To understand why,

you need to develop a pessimistic “network engineering mindset,”

recognizing that any fiber you deploy will exhibit a perverse affinity

for backhoes, brushfires, hungry rodents, and sundry other natural

disasters, all aimed at destroying your connectivity.

The normal solution to this problem is to deploy fiber redundantly along

two physically separate routes, thereby insuring that if a backhoe cuts

the pair of fibers you happen to be using, traffic will automatically reroute

onto the backup (“protection”) pair. Clearly, this is not a particularly

elegant solution nor a particularly cheap one, but if the circuit is crucial,

or if it’s running through remote areas where quick repairs would be

difficult, it’s routine to spend whatever it takes to get the required backup

circuit deployed, even though that may mean doubling (or more than

doubling) the cost.


Optic Fiber PropertiesWateen has deployed a state-of-the-art optical fibre transmission

network with a vision to provide faster, more reliable and more

ubiquitous connections at lower costs (Error: Reference sourcenot found). Optical fibre, due to its superior transmission

capability, forms the foundation for today’s optical networks. In

order to unleash the vast potential of fibre, Wateen has decided to

opt hybrid configuration of fibres with upgraded specifications of

International Telecommunication Union (ITU) as G.652-D defines

a full-spectrum, low water peak with low Polarization Mode

Dispersion (PMD)1 along with G.655 NZ-DSF for long distance,

high data rates communications.

Metro Network

Network ReadinessIn Phase-I Wateen Telecom deployed 96 Core hybrid (12 G.655 &

84 G.652-D) Metro Optic Fiber Rings in major Metropolis i.e

Lahore, Karachi & Islamabad/Rawalpindi in order to extend optic

connectivity to majors’ corporate hubs and other Telecos

infrastructure sites. This connectivity subsequently extended to

Phase-II sites located at Faisalabad, Multan, Sukkar, Peshawar,

Gujranwala, Sargodha, Quetta, Gujrat, Hyderabad, Jehlum,

Sialkot etc. The deployment of this state-of-art-network plays a

major role to meet point-to-point media requirements of Telecom

market as well as to extend the services to the other corporate

1 Polarization mode dispersion (PMD) is a form of modal dispersion where two different polarizations of light in a waveguide, which normally travel at the same speed, travel at different speeds due to random imperfections and asymmetries, causing random spreading of optical pulses. Unless it is compensated, which is difficult, this ultimately limits the rate at which data can be transmitted over a fiber.


customer and strategic business partners of Wateen Telecom by

providing Quality of Service to the fullest satisfaction of its valued

customers.

Following are the details of the fiber lengths extended in metro cities:

S.# CityLength(m)

Existing Expansion1 Faisalabad 772 Jhelum 183 Sahiwal 144 Gujrat 275 Gujranwala 436 D.I.Khan 177 Sukkur 108 Quetta 499 Sialkot 49

10 Sargodha 2211 Multan 4612 Peshawar 4513 Abbotabad 2914 Hyderabad 3215 Karachi 118 3316 Islamabad 76 2517 Lahore 84 75

TOTAL 278 610G. TOTAL 887.6

Currently Wateen is in the mode of evaluating solutions to be

implemented to light the fiber for metro network connectivity. The

activation of the network can be done through either ‘Active’ or

‘Passive’ devices, where the former require no electrical power to

split the optical signals and the latter devices are powered.

Passive Optical Network (PON) solutions are devised for passive

device connectivity, whereas Metro-Ethernet (ME) solutions are

used for active device connectivity. Following is a brief detail of

the technologies:


Passive Optical Network (PON)A PON is a point-to-multipoint, fiber to the premises network

architecture in which passive optical splitters are used to enable a

single optical fiber to serve multiple premises, typically 32. A PON

consists of an Optical Line Termination (OLT) at the service

provider's central office and a number of Optical Network Units

(ONUs) near end users. A PON configuration reduces the amount

of fiber and central office equipment required compared with point

to point architectures.

Downstream signals are broadcast to each premises sharing a

fiber. Encryption is used to prevent eavesdropping. Upstream

signals are combined using a multiple access protocol, invariably

time division multiple access (TDMA). The OLTs "range" the

ONUs in order to provide time slot assignments for upstream

communication

Metro Ethernet (ME)A Metro Ethernet is a computer network based on the Ethernet

standard and which covers a metropolitan area. It is commonly

used as a metropolitan access network to connect subscribers

and businesses to a Wide Area Network, such as the Internet.

Large businesses can also use Metro Ethernet to connect branch

offices to their Intranets.

A typical service provider Metro Ethernet network is a collection of

Layer 2 or 3 switches or routers connected through optical fiber.

The topology could be a ring, hub-and-spoke (star), full mesh or

partial mesh. The network will also have a hierarchy; core,

distribution and access. The core in most cases is an existing

IP/MPLS backbone, but may migrate to newer forms of Ethernet

Transport in the form of 10G or 100G Rroad to 100G speeds.


Ethernet on the MAN can be used as pure Ethernet, Ethernet over

SDH, Ethernet over MPLS or Ethernet over DWDM. Pure

Ethernet-based deployments are cheap but less reliable and

scalable, and thus are usually limited to small scale or

experimental deployments. SDH-based deployments are useful

when there is an existing SDH infrastructure already in place, its

main shortcoming being the loss of flexibility in bandwidth

management due to the rigid hierarchy imposed by the SDH

network. MPLS based deployments are costly but highly reliable

and scalable, and are typically used by large service providers.

L2VPNs / Clear Channel Circuits

Wateen’s clear channel circuit or layer 2 MPLS VPN (also known

as L2VPN), will be a point-to-point “pseudo-wire” service. It will be

used to replace existing physical links based on TDM circuits. In

this scenario, an Ethernet wire will be handed to the customer who

will either connect it to a layer 2 switch or a router, depending on

which layer the customer wants to build the solution on top off.

This model will mostly be suitable for customers who have a

traditional hub and spoke network topology. All sites will connect

to an aggregation site which will serve as the regional hub

resulting in a point to multipoint link between the aggregation site

(the hub) and the remote sites (spokes). The following diagram

depicts a typical deployment at the customers’ end.


Layer 3 IP VPNs

Wateen Telecom’s MPLS Core provides ability to provide L3 VPN

services to its customers. Customers can start with at least two

offices connected to Wateen’s network. These two networks can

then be connected through MPLS based VPN across the MPLS

core. The last mile connectivity enables customer to reach nearest

PE router of Wateen’s MPLS Core. The last mile connectivity

between CE router and PE router is pure Layer 2 domain. Once

customer is connected to PE, PE initiates a separate routing

instance for that customer and populates virtual routing table

having routes for that CE node in it, this virtual instance is

associated to that dedicated instance for router for the customer.

A customer can selectively allow some other customer of Wateen

to have restricted access of its routes. This creates Extranets,

businesses uses extranets to take advantages of horizontal or

vertical integration.


L3 VPNs can be offered to the customers in both point-to-point

and point-to-multipoint configurations. This allows the customers

to have “any to any” connectivity on their network by creating a

mesh as given in the following illustration. This provides the

customers with the flexibility of designing the VPNs according to

their requirements.

IP/MPLS Security

This portion borrows heavily from Cisco’s technical

documentation. IP/MPLS VPNs can exist in a point-to-point, point

to multipoint, or multipoint to multipoint configuration. VPNs

always exist in the form of point to point links where data is

encrypted at the terminal equipment of one user which is

decrypted at the terminal equipment of the other user. The

following diagram illustrates how the VPN connectivity is

established between different sites. The diagram shows how two

different enterprises, using the same service provider, establish

two separate VPNs.


Data and Routing Separation between VPNs

It is a requirement for enterprises that the address space between

the MPLS core and all VPNs on the same shared network be

independent, so that each customer can use the same address

space without interfering with other customers. That is, every VPN

customer and the core itself must be able to use the entire IPv4

address range completely independently. Similarly, data traffic

from each VPN must remain separate, never flowing to another

VPN. A related requirement is that routing information for one

VPN instance must be independent from any other VPN instance

and from the core.

Routing Separation

To achieve routing separation among VPNs, MPLS VPNs apply

the following principles:

Each VPN is assigned to a Virtual Routing and Forwarding (VRF)

instance - Every provider-edge router maintains a separate VRF

instance for each connected VPN. Each VRF on the provider-

edge router is populated with routes from one VPN, either through

statically configured routes or through routing protocols that run

between the provider-edge and the customer-edge router.

Because every VPN is associated with a separate VRF, there is

no interference among the VPNs on the provider-edge router.


Unique VPN identifiers - To maintain routing separation across the

core to the associated provider-edge routers, unique VPN

identifiers such as the route distinguisher are added to the multi

protocol Border Gateway Protocol (BGP). VPN routes are

exchanged across the core only by multi protocol BGP. This BGP

information is not distributed again to the core network, but only to

the associated provider-edge routers, which keep the information

in VPN-specific VRFs. Thus, routing across a MPLS network

remains separate for each VPN.

Traffic Separation

MPLS-based VPNs adhere to the "true peer VPN" model—that is,

they perform traffic separation at Layer 3 through the use of

separate IP VPN forwarding tables. MPLS-based VPNs enforce

traffic separation between customers by assigning a unique VRF

to each customer's VPN. Forwarding within the service provider

backbone is based on labels; MPLS sets up label-switched paths

(LSPs), which begin and terminate at the provider-edge routers.

The provider-edge router determines which forwarding table to

use when handling a packet because each incoming interface on

a provider-edge router is associated with a particular VPN.

Therefore, a packet can enter a VPN only through an interface

that is associated with that VPN.

By maintaining separation among addressing plans, routing, and

traffic, the MPLS IP VPN core network architecture offers the


same security as comparable ATM- or Frame Relay-based

L2VPNs. It is not possible to intrude into other VPNs or the core

through the MPLS IP VPN network.

Resistance to Attacks

Resistance to attacks on a corporate network is essential for

business continuity. Therefore, it is important for enterprise

customers that the service provider ensures that its core network

routers cannot be reached from outside the network to perpetrate

a denial of service (DoS) attack. Service providers prevent their

routers from being reachable by using packet filtering, and

optionally by hiding addresses. Use of access control lists (ACLs)

limits access only to the port(s) of the routing protocol, and only

from the customer-edge router.

To attack an element of a MPLS network, the attacker must know

its address, which is hidden from the outside world. Therefore, an

attacker must resort to guessing at core router IP addresses and

sending packets to these addresses. Unfortunately for the

attacker, address separation mechanisms in MPLS result in each

incoming packet being treated as belonging to the address space

of the VPN customer. Therefore, it is not possible to reach an

internal core router even through IP address guessing.

Impossibility of VPN Spoofing

Both Layer 2 and Layer 3 VPNs must be resistant to

impersonation attacks, such as packet spoofing and replay

attacks. To launch a VPN spoofing attack, the attacker provides

false information about their identity to obtain unauthorized access

to a VPN and its associated services. The attacker usually

generates packets with bogus source addresses. Impersonation of

devices is attempted by sending data packets that the receiver

believes are valid but might have been spoofed. Typically, this


type of attack is used to change routing information, gain access

to authentication sequences, and then use this information to

attain unauthorized access

.

On IP networks, IP source address spoofing has been extensively

abused by hackers and is a major security concern. In an MPLS

environment, it is possible for a VPN customer to do IP source

address spoofing, but because there is a strict separation between

VPNs and between a VPN and the core, it is not possible to use

this mechanism to attack other VPNs or the core. IP spoofing of

this nature remains within the VPN where it originated.

Label spoofing is not possible in an MPLS environment. The

interface between any customer-edge router and its peering

provider-edge router is a pure IP interface without labels. If a

labeled packet is sent from a VPN to a provider-edge router, the

provider-edge router automatically drops it.

Summing it all up

Similar to L2VPN services, MPLS VPN networks provide full

address and traffic separation, and hide addressing structures of

the core network and the VPNs. It is not possible from the outside

to intrude into the core network or VPNs by abusing the MPLS

mechanisms. Neither is it possible to intrude into a properly

secured MPLS core. The table below summarizes MPLS VPN

myths and facts.

Myths True/False Explanation

"MPLS is IP-based and, therefore, intrinsically insecure"

False

MPLS augments native IP-based networks with a broad spectrum of data separation, route separation, packet filtering, and network concealment mechanisms. MPLS-based VPNs offer the same security as traditional VPN types, such as Frame Relay and ATM. An example of a popular MPLS-based service is company intranets.


"One MPLS VPN customer can intrude into another customer's VPN"

False MPLS VPNs are completely isolated. It is impossible to intrude into a VPN either from the Internet or another VPN.

"MPLS VPNs are susceptible to DoS attacks from the outside"

False

Pure MPLS VPN networks are fully secured. MPLS VPNs that share access with the Internet are completely safe from DoS attacks if the provider-edge router provides VPN access only.

"Even a provider-edge router used exclusively for the VPN is susceptible to DoS attacks"

FalseWhile this is true in theory, in practice it is false because it is very easy to identify and disconnect the offender and to prosecute.

Metro Fiber Rings

Owing to the ever increasing demand for high bandwidth

connectivity within the cities, Wateen is deploying Metro OFC

network in major cities of the country. Customers will be given last

mile on Fiber where bandwidth requirements are greater than 4

Mbps. Owning to Wateen’s own metro rings, the length of fiber to

be laid for a particular customer will range anywhere from a few

hundred meters to 10 kms or more.

From a customer standpoint, three of the most important problems

being faced by them are:

1) Lack of SLA driven approach in providing connectivity due to

poor support systems by existing service providers. Customers

expect an availability of 99% or higher, whereas PTCL was

previously offering only an availability of around 95%. Only after

PTA’s recent announcement on SLA requirements2 has PTCL

started offering more stringent SLAs. However, considering the

size of PTCL, it will take them quite a while to align themselves

2 Available on PTA’s website at http://www.pta.gov.pk


http://www.pta.gov.pk/

onto a more customer-centric approach. Additionally, ISP’s are in

effect limited in their service-delivery capabilities due to reliance

on PTCL. Wateen will address this customer requirement by

offering stringent SLAs delivering an availability of 99% or higher.

Our approach towards designing the SLA is attached as Annexure

A-1, and A-2.

2) The predominant mode of data connectivity that exists in

Pakistan is clear channel circuits. Clear Channel circuits, being

dedicated circuits, require a lot of investment in infrastructure for

point to point links. In addition, expansion capabilities of

organizations become somewhat limited, since new dedicated

circuits have to be established between sites. Wateen will address

this issue by providing IP-VPNs that lower the investment required

in acquiring and housing the equipment, while at the same time

providing “any-to-any” connectivity capabilities without any

investment in infrastructural support.

3) Currently, customers have to deal with multiple service

providers for gaining connectivity. This creates inefficiencies

across the communications chain, as dependencies exist between

different service providers for service delivery. In addition,

telephony, Internet and Data connectivity is typically being

provided by different service providers, thus making the task of

managing different accounts quite complex. Wateen will address

this issue by providing a one window operation for all connectivity

needs due to IP-convergence and availability of various last mile

delivery technologies suited to different terrains.

4.2. FTTX

Platform DescriptionFiber to the Curb (FTTC) is the installation of optical fiber to within several

hundred feet of the home or office. At that point, the optics is converted


into electronics for delivery into the premises, typically using Coaxial

Cables. Such a technology is thus termed as Hybrid Fiber Coaxial (HFC).

Apart from HFC, another technology that Wateen will be utilizing is the

Gigabit Passive Optical Network (GPON). GPON is a faster point-to-

multipoint, fiber to the premises network architecture in which non-

powered optical splitters are used to enable a single optical fiber to serve

multiple premises. GPON is an innovation unlikely to be replaced in the

near future, and the biggest advantage it enjoys over HFC is the

capability to transfer much greater bandwidth: 1 Gbps versus 37 Mbps on

HFC.

The products being offered through this network is primarily targeted

towards consumer segments. This includes

Broadband Internet

Telephony

Cable TV (Both Analog and Digital)

Security and Surveillance

VAS (Gaming and Portal)

Platform Objectives

Through bundling basic communication means into a package like triple

play services, Wateen Telecom will be able to benefit customers in such a

way that service quality and maintenance standards of these three

services are met. Customers will be able to enjoy tailor-made packages to

cater to their individual needs. Wateen’s triple play package will also

avoid the hassle of multiple bills with different deadlines hence saving

valuable time for the customers. Moreover, the high bandwidth offered on

GPON network ensures catering to high bandwidth requirements in future

to run bandwidth savvy applications.

Strategic Alignment


Wateen Telecom’s vision, evident from its proposition “We Connect”, has

been to revolutionize the means of communication for everyone. The

triple play service is the first step in starting such a process of revolution.

Wateen triple play service is indeed a one of a kind complete

communication bundle that will not only meet customers’ communication

requirements but hopes to exceed them on the reliability, affordability and

quality front.

FTTx and triple play will be complementing Wateen existing

infrastructure. They will simply be extending the platforms and products

that it has already established. The FTTx network will be connected to the

metro rings and will be extending connectivity to the neighborhood level.

Triple play will be providing all the WiMAX products (Internet and voice)

plus cable TV. Triple play will thus be providing the only product i.e. cable

TV that Wateen lacked in its previous products and needed to complete

its offering of basic communication services.

Wateen’s existing forays into telecommunication are going to provide both

the resources and the competencies needed to succeed in the

deployment of FTTx and the provision of triple-play. Wateen already has

the back-end infrastructure in the form of metro rings that it will be using

to extend its FTTx network from. Also, it already has the back-end

infrastructure needed to provide Internet and voice since it is already

using it to deliver these products on WiMAX. Therefore, the incremental

cost to Wateen of setting up the network and providing triple play will be

lesser since it will be able to synergize off its existing resources. Based

on this, we believe that the expansion of FTTx and the provision of triple-

play to consumers are in line with Wateen’s vision and existing

businesses and competencies.

Platform Delivery


HFC:

CMTS: Cable Modem Terminal System, used to

provide return path services to consumer like internet

& voice.

ONU (Optical Node Unit) Fiber cable terminates at

ONU, signal carries through co-axial cable beyond the

node.

Amplifier: Strengthen the signal to reach till customer

premises

Tap: Split signal into multiple outputs to connect drop

cable coming out from customer premises.

GPON:

Following figure shows Passive Network architecture;


OLT (Optical Line Terminal): The fiber link is terminated at

a Optical Line Terminal, It is interface to the fiber link

connecting the back end equipment to the customer

premises equipment or CPE.

Optical Splitter: splits signal into 64. Each splitter connects

with OLT through dedicated fiber and 64 customers can be

connected through 1-splitter.

ONT (Optical Network Terminal)/ ONU (Optical Network

Unit): Used at customer premises for the termination of

fiber. Both terms have the same meaning, but ONU is

IEEE terminology and ONT is ITU terminology.

4.3. DSL

Platform DescriptionDSL is trusted last mile solution deployed country wide by PTCL and

other players to capitalize unmet Broad Band demand of internet users.

DSL is capable to meet Hi Speed Internet demand of corporate users ,

SME’s , SOHO’s and MNC’s . High Speed Internet ranges from 256K to

2Mbps while covering 5Km to 6Km in planned areas like DHA , Army

Societies , Cantonment etc. Hence broad coverage is unique feature of

DSL and keep it as First Choice of customer


Platform Objective

Considering the market potential of Broad Band, Wateen has planned to

deploy DSL infrastructure in 91 sites of 22 Wi-max cities to provide back

up option to corporate clientele while serving high ARPU residential

areas in spillover.

Currently 928 sites of Wi-Max are serving 30K Broad Band customers in

22 cities which will increase to 70K with successful deployment of DSL

Platform. Hence company’s vision and mission will gain dramatic

reinforcement.

Strategic AlignmentWateen has planned to serve Wi-Max covered cities so that company

could gain 100% Broad Band penetration and prime market share.

Corporate clientele will get cost effective last mile back up solution for

their data centers and offices. Hence DSL will ensure 100% up time thus

fulfilling corporate demand and gaining customer satisfaction.

DSL deployment will incur nominal additional cost for HR hence saving

company resources for future investments.

Platform DeliveryBelow figure reflects generic core network architecture for DSL operators


All Rights Reserved. No part of this presentation may be reproduced, printed or transmitted in any form or by any means, without the prior written consent of Wateen Telecom.

DSL Architecture

Following is description of different components:

DSL modem is used to transport data from customer to DSLAM

DSLAM is used to split voice and data incoming from customer

BRAS is used to terminate PPPOA/E requests from DSLAM

DHCP server will assign IP to customer

AAA will authenticate, authorize and account customer information

Internet gateway will help user to access internet cloud

4.4. VSAT


VSAT is media to provide Satellite based multiple services to carry voice,

data, video and internet. Technology is formed to reach anywhere and

everywhere according to needs and wants of customers. VSAT is

primarily used in areas where no telecom infrastructures are available or

rapid deployment is required, its one of The most secure point to point

and point to multi point media. Some well known services being offered at

this platform are SCPC, MCPC, DVB-RCS and TV up-linking.


Platform Objectives

Company aims to achieve following objectives through VSAT platform:-

“Quick-Win”. Rapid rollout (as compared to any other media) to

tap existing market

Access anywhere and everywhere

Most reliable and secure media

Supporting GSM operators to operate in areas with Telecom

infrastructure

Encourage & promote wireless broadband access (WBA)

Becoming the largest VSAT services provider in this region

Strategic Alignment

Vision and mission of Wateen Telecom are being reproduced (in order)

below.

Vision

To launch Pakistan into the 21st century digital revolution by

providing complete communication solutions to Telecom

Operators, Corporate customers, Consumers and to be the

leading “Carriers’ Carrier” through world-class cutting-edge

network by delivering a broad range of reliable, affordable and

quality customer-centric services.

Mission

o To provide affordable communication services that meets

and exceeds customers' requirements

o To deliver high-quality, flexible and innovative solutions

that are cost effective and conducive

o To provide complete customer satisfaction on time, every

time

Management of Wateen Telecom has envisioned reducing the

digital divide. VSAT platform can help company to achieve its


strategic business goals. Abridging the digital divide is foremost

business goals of the company and in line with company’s vision

to bring digital revolution. Wateen Telecom is emerging telecom

leader in both corporate and consumer market segments. This

platform is aimed to strengthen company’s ambitions to provide

full range of nimble product & services.

Wateen Telecom is first telecom operator in private sector which

conceptualized and materialized country-wide optical transmission

network. In order to provide VPN connectivity across three

metropolitan cities, i.e. Lahore, Karachi, Islamabad, metro optical

fibre connectivity was established. This extended up to other cities

and now Wateen posses ring-structured metro optical network in

17 cities. This has given company an edge over regional telecom

operators. Additionally, company’s’ pilot HFC project in DHA

Lahore has obtained very good response and approx. 90 %

residents of this locality are enjoying triple play services at

affordable price.

VSAT platform is another success story on the telecom canvass.

This is consistent with company’s mission to promote cutting-edge

technology. This will be integrated with existing infrastructure.

With the presence of FTTx and DSL platforms, WiMAX and VSAT

is going to help company create an image of integrated services

provider where company is fulfilling needs of corporate customers

as well as consumers.

Additionally, concept of personal broadband is in congruence with

mission of the company to be customer-centric.

Platform Delivery

Below figure reflects generic core network architecture for GSM operators


Following are description of different components:

VSAT antenna: Are available with different dimensions starting

from 1.2M to 11M for both Ku and C-Band

Satellite Modem: Capable to carry data from 9.6KBps to 4xE1’s

BUC: Block up convertor starting from 2W to 1000W requirement

depends upon media size, used transmit data

Combiner / Splitter; To convert multiple carriers into single carrier

4.5. WiMAX


Below table shows matrix between novelty of markets and novelty of

technology.

N

ovel

ty o

f

High Technological:

New solutions to

existing problems

Complex:

Technology and market

co-evolve


tech

nolo

gy

Differentiated:

Compete on quality

and features

Architectural:

Novel combinations of

existing technology

Low High

Novelty of markets

Table 1: Technology and market maturity matrix

This matrix gives indication that we have new solutions to existing

problems especially for telephony and internet where novelty of markets

is lower however novelty of technology is high (WiMAX/FTTx/VSAT

platform). This comes under “Technological domain”. However, online

gaming, portal and security & surveillance describe “Complex” where

technology and market co evolve. As a whole WiMAX is new technology

which is supposed to provide a platform for the resolution of existing

problems by offering new solutions as well as giving birth to new markets

like gaming and security & surveillance. Problems of repeated

disconnects, lossy last mile copper lines by the incumbent are creating

space for new technology like WiMAX to be adopted and relied on,

whereas “iPod” generation is ready to embrace new technological

evolution.

WiMAX is the network industry term for a standard form of wireless

broadband networking. WiMAX is designed to support long-distance

wireless connectivity to the Internet in areas not serviced by cable modem

or DSL. It is the trade name for a family of new technologies related to the

IEEE 802.16 wireless standards. It has the potential for very long range

(5 - 30 miles) and high speeds.

The initial version, based on 802.16a, is designed for fixed (non-mobile)

applications only, such as a wireless replacement for home DSL or cable

modem service. Newer versions, such as 802.16e, add support for


mobility, potentially making WiMAX a competitor for certain 3G or 4G cell-

phone technologies.

Platform Objectives

Company aims to achieve following objectives through Wi-MAX platform:-

“Quick-Win”. Rapid rollout (as compared to FTTx) to tap existing

market

Encourage & promote wireless broadband access (WBA)

Provide state of the art products (voice & telephony)

Active participation in broadband penetration in Pakistan

Encourage narrowband users to convert into broadband

Phased introduction of wireless broadband. Initially platform will

provide broadband service in 22 cities. Later, network will be

expanded to 71 cities, where Wateen Telecom has carrier-grade

tele-housing facilities.

Strategic Alignment

Vision and mission of Wateen Telecom are being reproduced (in order)

below.

Vision

To launch Pakistan into the 21st century digital revolution by

providing complete communication solutions to Telecom

Operators, Corporate customers, Consumers and to be the

leading “Carriers’ Carrier” through world-class cutting-edge

network by delivering a broad range of reliable, affordable and

quality customer-centric services.

Mission

o To provide affordable communication services that meets

and exceeds customers' requirements

o To deliver high-quality, flexible and innovative solutions

that are cost effective and conducive


o To provide complete customer satisfaction on time, every

time

Management of Wateen Telecom has envisioned reducing the

digital divide. Wi-MAX platform can help company to achieve its

strategic business goals. Abridging the digital divide is foremost

business goals of the company and in line with company’s vision

to bring digital revolution. Wateen Telecom is emerging telecom

leader in both corporate and consumer market segments. This

platform is aimed to strengthen company’s ambitions to provide

full range of nimble product & services.

Wateen Telecom is first telecom operator in private sector which

conceptualized and materialized country-wide optical transmission

network. In order to provide VPN connectivity across three

metropolitan cities, i.e. Lahore, Karachi, Islamabad, metro optical

fibre connectivity was established. This extended up to other cities

and now Wateen posses ring-structured metro optical network in

17 cities. This has given company an edge over regional telecom

operators. Additionally, company’s’ pilot HFC project in DHA

Lahore has obtained very good response and approx. 90 %

residents of this locality are enjoying triple play services at

affordable price.

Wi-MAX platform will be another success story on the telecom

canvass. This is consistent with company’s mission to promote

cutting-edge technology. This will be integrated with existing

infrastructure. With the presence of FTTx and DSL platforms,

WiMAX is going to help company create an image of integrated

services provider where company is fulfilling needs of corporate

customers as well as consumers.


Additionally, concept of personal broadband is in congruence with

mission of the company to be customer-centric.

Platform Delivery

Below figure reflects generic core network architecture.

Figure 2: WiMAX generic network architecture

Following is description of different components:

SS/MS: the Subscriber Station/Mobile Station

ASN: the Access Service Network

BS: Base station, part of the ASN

ASN-GW: the ASN Gateway, part of the ASN

CSN: the Connectivity Service Network

HA: Home Agent, part of the CSN

AAA: AAA Server, part of the CSN

NAP: a Network Access Provider

NSP: a Network Service Provider


http://en.wikipedia.org/wiki/AAA_protocol

http://en.wikipedia.org/w/index.php?title=Access_Service_Network&action=edit&redlink=1

http://en.wikipedia.org/wiki/Image:WiMAXArchitecture.png

Also there are number of interconnections (or reference points) between

these, labeled R1 to R5 and R8.

This architecture is flexible enough to allow remote/mobile stations of

varying scale and functionality and Base Stations of varying size.

End to end network description is given below.

Figure 3: WiMAX end to end platform description

5. Market Overview and Analysis

5.1. Market/Customer Overview

Two major market segments are corporate & consumers. Corporate may

include carriers, SME/SOHO, Enterprise & Govt. On consumer side, we


may have again classification of high end consumers and general

consumers. The customer value proposition can involve elements such

as providing to customers:

A good value of money in terms of perceived trust and satisfaction

Excellence on an important product or service attribute such as

crystal clear voice and always-on internet connection

Product line breath (from telephony, to internet, to cable TV, to

security & surveillance)

Innovative offering (future PCMCIA card built-into laptop)

Bundle Offering of products on different platforms

5.2. Market Size

GSM Operators

S/N Organization Licensed Region Brand Name PAKISTAN AJK/NA

1 M/s Pakcom Limited Yes No License Instaphon

e 2 M/s Pakistan Mobile Company Limited Yes Yes Mobilink 3 M/s CMPak Limited Yes Yes Paktel 4 M/s Telenor Pakistan Limited Yes Yes Telenor 5 M/s Warid Telecom Limited Yes Yes Warid 6 M/s Pakistan Telecom Mobile Limited Yes Yes Ufone 7 M/s Special Communication Organization No License Yes SCO

With reference to the offered Wateen product portfolio, the heavy bandwidth requirement by the GSM Operators is catered by dark fiber (Long Haul & Metro) or Lambda light-up. As such, CMPak and Warid have already contracted one and two pairs respectively from Wateen on the long haul network and now opting for metro dark fiber in various cities. On the other hand, Mobilink has emerged as direct competitor to Wateen as it is deploying its own long haul fiber network. And, Telenor has contracted with Multinet for long haul connectivity and Worldcall for metro connectivity. Lastly, Ufone being a subsidiary of PTCL follows the policy of not contracting with its parent company’s competitor.

As a result, the GSM Operator market has reached saturation where SCO and NTC remain as the only option to attract towards Wateen’s network.


Government Institutions

S/N Organization1 Higher Education Commission (HEC)2 Water And Power Development Authority (WAPDA)3 Embassies (US/UK/UAE etc.)4 Pakistan Meteorological Department5 Pakistan Software Export Board (PSEB)6 Sui Northern Gas Pipelines Ltd. (SNGPL)

Recently, HEC has opted for dark fiber connectivity over long haul and

metro networks. In light of a similar comparison, WAPDA/SNGPL are

expected to generate heavy bandwidth requirements to be fulfilled

through either dark fiber or lambda light-up.

WLL/ LDI/ ISP

Previously, WLL/LDI operators had high bandwidth requirements to

entertain their prevailing customer base. However, in past 2-3 years,

small operators (like Callmate) have been driven out of the market due to

the drastic decrease in prices by PTCL. Eventually, the current market

consists of few large operators who can afford bulk bandwidths and

competitive prices steadily moving ahead with an approximate 5-10%

growth rate. Moreover, these operators are moving towards releasing

their dependency from PTCL collocations and opting for IP connectivity

rather than electrical interfaces. Hence, this sector had core requirements

relating to managed capacity which are now redirecting towards IP/MPLS

Data VPNs.

On the other hand, the ISPs have suffered a similar fate due to the drastic

decrease of prices by PTCL for IP Transit. This segment pie is not

expected grow, rather large mergers/acquisitions (similar to acquisition of

WOL and Dancom by Orascom) are expected in the near future to

consolidate the market.

WLL Operators


S/N Organization Licensed Regions 1 Pakistan Telecommunication Company Limited All Fourteen Regions 2 Telecard Limited. All Fourteen Regions 3 Burraq Telecom Limited All Fourteen Regions

4 DV Com Data (Pvt.) Limited CTR, HTR, ITR, KTR, LTR, NTR-I, NTR-II, RTR, WTR

5 WorldCall Telecom Ltd. All Fourteen Regions 6 Wateen Telecom (Pvt.) Limited All Fourteen Regions 7 Great Bear Int'l (Pvt.) Limited All Fourteen Regions 8 Cyber Internet Services (Pvt.) Ltd KTR, LTR, ITR

9 Link Direct International (Pvt.) Ltd.

FTR HTR, ITR, KTR, LTR, MTR, NTR-I, NTR-II, RTR, STR-I, STR-V, WTR

10 Super Dialogue (Pvt.) Ltd. FTR, RTR 11 MyTel (Pvt.) Ltd. NTR-I 12 Metrotel (Pvt.) Ltd. GTR 13 Ertibatat (Pvt.) Ltd. NTR-II 14 Defence Housing Authority LTR 15 Sachal Satellite Communication (Pvt.) Ltd. STR-I 16 Sachal Softec (Pvt.) Ltd. STR-V

Legends: Following are the Telecom Regions:

i) Central Telecom Region (CTR). ii). Faisalabad Telecom Region (FTR). iii). Gujranwala Telecom Region (GTR). iv) Hazara Telecom Region (HTR). v). Islamabad Telecom Region (ITR). vi). Karachi Telecom Region (KTR). vii). Lahore Telecom Region (LTR). viii). Multan Telecom Region (MTR). ix). Northern Telecom Region - 1 (NTR-1). x). Northern Telecom Region - 2 (NTR-2). xi). Rawalpindi Telecom Region (RTR). xii). South Telecom Region - 1(STR-1). xiii). Southern Telecom Region - 5 (STR-5). xiv). Western Telecom Region (WTR).

LDI Operators

S/N Company Name 1 TeleCard Ltd. 2 DV Com Ltd 3 Wise Communication Systems (Pvt.) Ltd 4 Dancom Pakistan (Pvt.) Ltd 5 Wi-Tribe Pakistan Ltd 6 Wateen Telecom (Pvt) Ltd 7 Telenor LDI Communications (Pvt.) Ltd


8 Circle Net Communications Pakistan (Pvt.) Ltd. 9 4B Gentel International (Pvt) Ltd

LL Operators

S/N Company Name1 Dancom Pakistan (Pvt.) Ltd. 2 Blue Tel (Pvt.) Ltd. 3 World Online Previously (Cyber-Soft Technologies (Pvt.) Ltd). 4 Wise Communication Systems (Pvt.) Ltd. 5 NetSol Connect (Pvt.) Ltd. 6 Air Track Telecommunication (Pvt.) Ltd. 7 Call 2 Phone (Pvt.) Ltd. 8 WEB Concepts (Pvt.) Ltd. 9 Zari Telecommunications (Pvt.) Ltd.

10 Vision Telecom (Pvt.) Ltd. 11 Metrotel (Pvt.) Ltd. 12 Albadar Etisalat (Pvt.) Ltd. 13 Brain Ltd. 14 Hazara Communications (Pvt.) Ltd. 15 ION (Pvt.) Ltd. 16 Noman & Tanveer Telecommunications (Pvt.) Ltd. 17 Sohail & Inam (Pvt.) Ltd. 18 Telenex (Pvt.) Ltd. 19 Union Communications (Pvt.) Ltd. 20 Unified Technologies (Pvt.) Ltd. 21 Velocity (Pvt.) Ltd. 22 Z-Communication (Pvt.) Ltd. (CCZ) 23 Eagle.Com (Pvt.) Ltd. 24 Naya Tel(Pvt.) Ltd. 25 City Links Communications Ltd. 26 Cyber House (Pvt.) Ltd. 27 Poleax Telecom (Pvt.) Ltd. 28 Multinet Pakistan (Pvt.) Ltd. 29 Whistler Telecom (Pvt.) Ltd. 30 Global Touch (Pvt.) Ltd. 31 Frontier Telecom (Pvt.) Ltd. 32 Globecomm Wireless (Pvt.) Ltd. 33 Satcomm (Pvt.) Ltd. 34 IBEX Telecommunication (Pvt.) Ltd. 35 Habib Rafique International (Pvt) Ltd

ISP


S/N Company Name1 BrainNet2 Cybernet3 Nexlinx4 Supernet5 Worldcall

Data Connectivity

The market for data connectivity comprises of various industrial sectors.

The role of IT is changing from one of a support function to that of a

strategic investment that adds value across the value chain. These

industrial sectors span, but are not limited to:

Banking and non-banking financial institutions

Manufacturing industries

Retail industry

Educational institutions

Governmental and semi-governmental organizations

Oil & Gas

Media

At present, Wateen caters to data connectivity through a multitude of

platforms (spanning WIMAX, DSL, DVB/RCS, wireless bridges, and

metro fiber) to ensure that it can meet all sorts of connectivity

requirements with respect to bandwidth and location diversity. Due to

these reasons, Wateen faces direct competition from ISP’s and the

incumbent player, PTCL.

Consumer Broadband Internet

Internet is the newest technology on the communication frontier in

Pakistan. As a consequence it has the least penetration of all the three

products being offered by Wateen. The market for Internet is limited by

accessibility to a personal computer as well as the ability to use it.

Because of this, most of the market for Internet is in the urban centres

where income levels and literacy ratios are higher.

Internet Users 17 million


Internet Subscribers 3.5 million

Broadband Subscribers 0.15 million

In the future, with new technology companies entering the market and

competition increasing, Internet tariffs are expected to decrease

dramatically, enabling more people to start using it. This change will be

reinforced by increasing income levels and a proliferation in computer-

usage skills.

Telephony

Fixed-line telephony has the second largest penetration, after TV,

amongst the three product categories that Wateen triple-play is involved

in. The current subscriber base for fixed-line telephony in Pakistan is

around 4,806,206. Given that there are 22.5 million households in

Pakistan, 21% of all houses have access to fixed-line telephones.

Total Fixed-Line Telephones 4,806,206

Fixed-Line Telephony Penetration 21%

By global standards, the teledensity in Pakistan is still very low. The

primary reasons for this low level is lack of infrastructure in rural areas,

low purchasing power, and a long and tedious process for obtaining a

fixed-line telephone. With economic conditions improving, living standards

are rising all over the country. Consequently, demand for fixed-line

telephones is bound to increase.

Cable TV

Television is one of the oldest and most prevalent technological

communication mediums in Pakistan with a very high penetration level.

Currently in Pakistan, there are 22.5 million households, 7.5 million of

which are urban while 15 million are rural. In total, over 12.5 million, i.e.

56%, households own a TV. Out of these, 6 million are urban households

and 6.5 million are rural households.


The penetration of cable TV is around 6 million, meaning that 48% of all

TV owners have access to cable TV. Most of these 48%, however, are in

the urban centers where availability of cable TV is nearly 100%. In the

rural areas, the reasons for low cable penetration are, primarily, non-

availability of a cable network, and, to a lesser extent, the inability to pay

the monthly tariffs due to low incomes.

Total Households 22.5 million

Total Households with TV 12.5 million

Total Cable TV Subscribers 6.0 million

5.3. Market/Customer Segmentation

Cellular and Government Sector

The combined size of cellular and government sector is approximately US

$107.5 million at the current PTCL rates. The government sector still

needs to be explored and the bandwidth requirements are expected to

grow exponentially for this sector. The products targeted at this sector

are:

LDI and WLL Sector

This sector can only be captured through complete end-to-end solution

delivery through Digital Transit Exchange (DTE) connectivity as shown in

diagram below and sizable discounts over PTCL. The operators are ready

to sign exclusivity for this solution.


ISP and Corporate Sector

Wateen offering to these sectors will be primarily based on Ethernet and

Leased Circuits solution as indicated in the following table. The capacity

requirements of these sectors are concentrated towards lower bandwidth

circuits but number of potential customers in these segments is

significant.

VSAT

Wateen currently holds a reasonable share in VSAT market. With the

addition of DVB-RCS network in Wateen the expected revenue is to rise.


Consumer Sector

Demographics play a key role in determining the business viability of any

telecommunications network. Traditionally, demographic regions are

divided into urban, suburban and rural areas. In our analysis a fourth area

has been added called exurban. Exurban areas are primarily residential

and compared to suburban areas are further from the urban center with

lower household densities. DSL availability is limited due to the distance

between the end-user and the switching center and cable in many cases

is simply too expensive.

Rural areas for the purpose of the business case analysis are defined as

small cities or towns that are located far from a metropolitan area.

Customer densities can be fairly high in these areas but they tend to be

underserved due to their remote location. The following table summarizes

the characteristics that will generally be encountered in each of the four

geographical areas under consideration for a new wireless service

provider.

Area Characteristics

Urban • Highest density of potential FTTX (GPON) and WiMAX


Telcos CorporateMarket Size (Satellite Bandwidth)

700 MHz

Major Competitors

Supernet, Pak Data Com,

Cybernet,AZMT,BTC, PTCL

Supernet, Pak Data Com,

Cybernet,AZMT,BTC, PTCL

Primary Product Offering GSM back hauling Data connectivity

Brand Loyalty/ Stickiness Low Low

Price Sensitivity Very Low Very Low

Major Problems being Faced by the Target Market

Availability of Satellite Bandwidth. Equipment limitation

Limitation on skilled resource Quality Services

Primary DMU CTO IT Head/ Owner

customers

• Many multiple tenant office and residential buildings

• Smaller WiMAX cell sizes to meet capacity requirements

• Strong competition: Drive by market size and availability of

alternate access technologies

Due to the competitive environment a new operator can

expect:

• Lower market penetration

• Higher marketing and sales expense

Other considerations:

• Licensed spectrum would be desirable to minimize

potential for Interference

Sub-

urban

• Higher percentage of single family residences also

• Business parks, strip malls, etc

• Cable and/or DSL may not be available universally

• Increase in WiMAX cell radius but still capacity limited with

limited spectrum assignments

New operator can expect:

• Somewhat higher market penetration compared to urban

Exurban • Upscale residential neighborhoods with moderate to low

household density

• Fewer business establishments

• High concentration of computers, cell phones, etc.

• Cable and/or DSL not universally available

• Larger WiMAX cell sizes, more likely terrain & range

limited

• Requirements of architectural boards, environmental

impact studies, etc. may add to BS site development costs

• High percentage of commuters to suburban & urban areas

Rural • Distant from major Metro Areas

• Residential and small business

• Very little if any, cable or DSL (rely on dial-up or satellite)

• High pent-up demand for internet access


• Limited competition

New operator can expect:

• Very high WiMAX market penetration & rapid adoption rate

Other considerations:

• High capacity backhaul may be a challenge

Table 2: Demographic Characteristics


6. Competitive Advantage

6.1. Competitive Advantage

Corporate – Long Haul & Metro Network

Next Generation Compliant Architecture

Wateen’s next generation optical fiber infrastructure (1.6

TeraBytes Core) is ready and capable to fulfill high bandwidth

needs of its customers as compared to PTCL’s fiber infrastructure

which is still in its deployment phase. Moreover, the new optic

fiber strands result in fewer data losses ensuring the following:

Quality of Service

Connectivity

Scalability

One Window Operation

Catering for all data solutions, Wateen serves as a “One Window

Operation” attracting a heavy customer base (Carriers/ISPs/WLLs

etc.)

Long-term Strategic Partnership

Wateen’s size of business is highly attractive for vendors to

partner a deal with the company, resulting in reduced costs and

affordable prices to the customers.

Corporate – Data Connectivity

A number of players providing data connectivity to corporates already

exist in the market. However, Wateen will be unique in that its portfolio of

products and services will be quite comprehensive. Wateen’s competitive

advantage over others can be listed as:


Support of integrated telecom footprint: OFC long haul, LDI, IMS

core (enabling multiple services)

Own Longhaul/Metro media as a profit center, positions Wateen

as highly competitive in prices for broadband operations as it

lowers transmission costs

Wateen’s ability to guarantee QoS and enter into SLA’s since we

will be offering end-to-end solutions using entirely our own

network.

Since Wateen will be providing connectivity using almost entirely

its own network, the level of security available to corporates will be

much higher as compared to traditional ISPs that have to rely on

third party infrastructure to deliver secure solutions.

Since Wateen is deploying Metro rings across 17 major cities, for

high bandwidth needs, Wateen can offer Fiber for last mile

delivery. In most of the cases, corporate head offices would

require very large bandwidths (8 Mbps or more) which at present

only a few competitors are in a position to offer at affordable

prices (PTCL, World Call, etc…). Other solutions for providing

broadband access rely on radio connectivity which is much more

expensive and difficult to maintain.

Low time to market in extending reach due to extensive

OFC/Metro infrastructure

Bundled services such as voice and Internet will provide

converged billing.

A one-window operation for all Internet, voice and data related

issues.

Value added products and services such as data centers, disaster

recovery sites, co-location, tele-housing, and contact centers,

etc… that leverage economies of scale and help in growing our

customers’ business.

Layer 3 or IP/VPNs will provide a flexible, scalable and affordable

solution to customers that are in an expansion phase, as


compared to traditional TDM circuits that require significant

investment for expansion.

All the latest IP-centric value added applications will be fully

compatible with Wateen’s network thereby enabling Wateen to

offer such applications that other service providers are not able to

offer (e.g. telephony, surveillance). Thus, Wateen will be in a

position to address a wide spectrum of customer needs with this

latest network.

Consumer Sector

Company can take lead in following ways:-

One stop shop for multiple service bouquets

State of the art IEEE 802.16e based network providing

standardized interoperable technology

Provisioning of rich IP based applications

Alternative technologies allows simultaneous targeting of both

high-end and low-end customers

Only alternative network to support high bandwidth services

DSL offering enables low-end customers to be brought onboard

and migrate to WiMax / FTT (x)

Maximized coverage on multiple platforms enables to cater all

requirements of corporate solutions

Triple play service on FTT(x) on national level in high ARPU

regions; Worldcall has only provided in few areas of Karachi

Offering the bundled services like blend of video calling, security &

surveillance and portal.

Introducing value added services, soon after basic product

offering overcomes teething problems.

Creating Total value proposition (TVP). Company being “carrier’s

carrier” also spearheading on access side

Customer intimacy through infomercials

Availability of country-wide sales channels


Lowe recurring charges as compared to competitors like PTCL,

LDN

7. Barriers to Entry

7.1. Barriers to Entry

7.1.1 Marketplace Barriers to Entry

Corporate – Long Haul and Metro Network

PTCL Monopoly

The prevailing market has been highly monopolized by PTCL

causing its customers to be highly dependant for all kinds of

connectivity solutions. This has resulted in a large number of

customers co-locating in PTCL exchanges with the following

repercussions:

Customer is not able to interconnect Wateen at the

exchanges as it is not supported by PTCL.

Customer is not willing to re-invest the heavy amount

already paid.

Wateen has to bear high CAPEX to facilitate its customers

move out from the collocations.

Saturated GSM Market

The GSM market has been nearly saturated with reduced

requirements of bandwidth to ensure activation of new

subscribers. Hence, the focus of the operators now is towards

providing consistent, reliable and high quality service and not

towards increasing subscriber base. This would require Wateen to

come up with high product innovation to effectively tap the market.

CAPEX Intensive Operations


Services, like dark fiber, managed capacity (E1/E3/STM-1 etc.),

require high CAPEX for delivery to the customer. Since the market

behavior is more price conscious, delivering cheap solutions

becomes very difficult.

Corporate – Data Connectivity

The biggest barrier to entry for Wateen as far as data connectivity market

is concerned, is PTCL’s massive reach across Pakistan. PTCL, being

Wateen’s biggest competitor in the data connectivity market, may create

hurdles for Wateen in provisioning for co-location. In addition, data

connectivity through DVB/RCS will be an expensive alternative to PTCL’s

infrastructure, thus hindering our penetration ability.

Another barrier, which is present in all industrial marketing practices, is

the importance of personal relations of service providers with customers.

Years of such relationships has resulted in a certain comfort level that

exists between the customer and the service provider. This may pose as

a barrier for Wateen; however, given the vast difference in terms of the

quality and sophistication of Wateen’s services, it should be easy to

overcome.

Corporate – VSAT

There are already number of DNOPS providers for data which are

providing SCPC and DVB-RCS services to consumers. Wateen’s real trial

would be to make the prospected users realize that Wateen’s services

are more reliable, cost effective and provides real customer services.

Wateen Telecom has a major challenge from Pak Datacom. Pak

Datacom being the oldest satellite service provider and a subsidiary of

PTCL which was a government owned and the only telecom infrastructure

in Pakistan has taken advantage of this fact and has gained a lot of

customership due to it. Pak Datacom Limited is the pioneer in Pakistan in

providing high speed data communication circuits both within the country


and abroad. Pak Datacom Ltd. is also the first company providing data

networks via Optical Fiber, Packet Switching and VSAT technologies. Pak

Datacom Limited has established a Data Network by the name of

TRANSLINK, which employs a number of technologies to provide high

speed and reliable data communication service. It employs the

technologies of Satellite Systems VSATs, Optical Fiber, Packet Switches,

Frame Relay, Digital E1 add/drop and cross connect equipment, TDMA

and Speed Spectrum Video. These all have been interfaced to form one

homogenous network which transparently provides high quality data

services to users. Pak Datacom Limited also plans to provide value

added services of E-Mail, Fax and Video Conferencing. The company is

installing a large 9.0 meter trackable antenna and high powered Satellite

Earth Station in Karachi. This will provide a large capacity of direct circuits

to its users.

Consumer

Following are significant entry barriers which prohibit conversion from

market space to market place.

Availability of reliable media required for backhauling

Allocated frequency spectrum (3.5 GHz). This requires extensive

deployment of base stations in order to get blanket coverage.

Higher costs of CPE

Adoption ratio of Wi-MAX and FTTx (GPON) technology

High Capital Investment required to set-up network infrastructure

Non-compatibility of CPE with core network. Network elements of

a manufacture accept CPE only made by them.

EBITDA will turn to positive after 3-4 years

7.1.2 Advantageous Barriers to Entry

Corporate

Industry Leading SLAs


Industry leading and trend setting SLAs can only be delivered by

an operator such as Wateen. This is so because Wateen is an

end-to-end connectivity provider, as opposed to other service

providers who remain dependant on third party infrastructure to

deliver end to end solutions. Reliance on third-party creates

dependencies and hence inefficiencies across the value chain.

CAPEX Induction

The scale of investment required to become an end-to-end service

provider such as Wateen is quite high. Even though Mobilink and

Multinet are planning to setup a long haul network throughout

Pakistan, an early lock in of customers through long-term

contracts will make Wateens’ market entry timing critical to long

term success.

Potential to Acquire other Businesses

Being the first player of such kind in the market, Wateen can enter

into long term partnership contracts with solution integrators (a

recent example of Wateen acquiring NE), and third party solution

providers such as Engro Innovative, Microtech Labs, etc. to

expand its skill set. Such partnerships with leading companies in

their respective domains / industries will ensure Wateen is the

preferred connectivity provider in the long run.

One-Window Operation

Due to Wateen’s IMS, IP convergence will provide the ability to

offer a number of value added services to potential customers.

The shear breadth and depth of services that can comprise

Wateen’s product portfolio will have learning curve implications for

competitors, and will provide a one-window operation for all

connectivity needs, and thus eliminate customers’ hassle of

dealing with multiple service providers and vendors. An early time


to market will thus be extremely important to Wateen’s long term

success.

Consumer

Wateen has pioneered in this technology and has first mover advantage

Wateen has lesser operational costs as compared to wi-tribe

Use of multiple platforms provide backup support to each other

e.g. DSL is a back-up support platform for Wi-MAX

Strong mixture of ATL & BTL activities creating high Brand equity

Economies of scale & Economies of scope

Synergy realization with other platforms like FTTx, DSL,

multimedia

Creating High switching costs for consumer


8. Competitor Analysis

8.1. Competitor Analysis

Corporate

Long Haul & Managed Capacity

In light of the above mentioned industry status, Wateen is

expected to face strong competition. Mobilink, Multinet and PTCL

are identified to be direct threat, whereas the foreign investment

being induced into the country through PTA regulations can easily

instill more competition in the broadband connectivity market.

A comparison of the competencies of the three companies is

presented below:

PTCL Wateen Multinet Mobilink

Long Haul of 9800 KM

Length


Length (100%

complete)


Length (<50%

complete)


Length (40% complete)

Extensive Coverage 71 cites covered 40 cities covered 67 cities covered

15 year old deployment New deployment Under deployment Under deployment

16 Fiber Network 24 Fiber Network 48 Fiber Network 48/24 Fiber Network

DWDM lit up to full

capacity

2 lambda of DWDM lit

up (Full Network)

Dead Network Some Sections lit up

Full occupancy Warid, Wateen & FUT

Traffic

No occupancy Mobilink traffic in some

sections

Badly Damaged Virgin Network Incomplete Network Incomplete Network

Limited future

expansion

Mega expansions

planned

Unknown Unknown

Limited renewal taking

place

O&M teams active 24

hours

No O&M setup yet Limited O&M setup

Project completed over Project completed in Project delayed, started Project delayed, started


a decade record time prior to Wateen prior to Wateen

No SLA Strong SLA SLA planned SLA planned

Traditional O&M

practices

Modern O&M through

OTDR components and

NOC

No O&M setup yet O&M setup not

comprehensive

PTCL

PTCL made several investments in infrastructure development

and added network capacity to enhance services and expand its

reach across the country. It has introduced Vfone, the new CDMA-

based WLL platform of PTCL. On the wireless broadband front, a

major upgrade of the WLL CDMA network was rolled out in order

to provide wireless broadband services in 17 major cities.

On the technical front, PTCL has laid an Optical Fibre Access

Network in the major metropolitan centers of Pakistan and local

loop services have started to be modernized and upgraded from

copper to an optical network. PTCL has invested in the capacity of

two SEA-ME-WE submarine cables to meet the increasing

demand of international traffic. Additionally, PTCL is also part of a

consortium that will put in place a high-capacity fiber-optic

submarine cable that stretches from India to Italy and France via

the Middle East, named I-ME-WE, in addition to the existing cable

systems (SMW3 & SMW4). PTCL has also signed an agreement

with Huawei Technologies Pakistan and Hewlett Packard (HP) to

jointly launch the ‘Network Operation Center’ project which has

fault detection and resolution technology. This project would

establish one main network operation center and three regional

ones with the implementation of an alarm management system

across the entire PTCL network in an integrated manner.

In light of the above-mentioned infrastructural uplift, PTCL has

adopted an aggressive stance in the market by offering heavy

discounts on its current prices for E1, E3 and STM-1 connectivity.


After sufficient pressure by PTA, PTCL has simply slashed its

voice rates by 30%. However, it is also offering an overall discount

of 50% on personal, client-to-client, negotiations. Furthermore, the

company still focuses to monopolize its existence where its

competitors’ (Wateen, Mobilink, Multinet) network has not

stretched yet by charging twice as much rates. In addition to this,

ISPs and WLL operators who are co-located with PTCL are not

being given the chance to interconnect with any other operator to

share their bandwidth load and increase network reliability. Having

invested a handsome amount as bank guarantee for licenses to

PTCL, neither do the operators have enough strength to re-locate

with any other operator.

Mobilink

Mobilink has invested over $2.5 billion in infrastructure, network

rollout and franchise, retail and customer services network across

the nation. Mobilink has progressed from voice to carrier-class

nationwide services by completing its own 6,500 km redundant

fibre optic backbone network across Pakistan. It now plans to

provide high-speed data connectivity in the urban and rural sector

of Pakistan through WiMax services.

In addition to this, Mobilink recently entered into an agreement

with four companies viz. DVCOM, DanCom, Zarco and WOL to

consolidate its operations aimed at providing better wireless and

broadband facilities for its customers. Leveraging on the assets

and expertise of these acquired companies Mobilink plans to

provide data services in the country in 2008. The company is set

to exploit opportunities in other fields like broadband (optic fibre,

DSL, WiMax), LDI etc.

Mobilink has already started contacting carrier customers by

offering DPLC solutions with microwaves as the last mile


connectivity. Despite of the market need for high bandwidth fiber

connectivity, it is attracting customers by providing immediate FUT

links so that the connectivity can be practically experienced.

Furthermore, Mobilink has also benchmarked PTCL for its prices

and, as such, offering a straight 40% discount.

Multinet

Inaugurated in 2005, Multinet’s Project Ittehad (Nationwide Optic

Fiber Backbone) links 107 cities of Pakistan with a 4,100 km high-

capacity fiber optic link. The company already intends to target

Mobile phone operators, LDI operators, LL operators, WLL

companies, Broadband Service Providers and Internet Service

Providers with this high capacity link.

According to the recent market update, Multinet has sealed a 20-

year capacity contract and a service contract with Telenor

Pakistan. The deal, in total, is estimated to be worth $40 million.

The capacity contract will allow Telenor to use fiber-optic cable

pairs and associated co-location facilities along Multinet Pakistan's

national long haul transmission network. The service contract

entails maintenance and associated services from Multinet for the

duration of 20 years. Moreover, Multinet is contractually bound to

provide on-ground connectivity to Telenor within a period of one

year, on failure of which the contract would remain null and void.

VSAT


Consumer

FTTX

In the fixed line businesses major competitors are PTCL,

WorldCall, Nayatel (Islamabad) and other local operators. Wateen

is following a strategy whereby a single customer can be targeted

using different platforms.

PTCL has the most extensive network laid throughout

Pakistan and it has the largest penetration of fixed line

network in Pakistan with around 5.3 million customers and a

long haul network of around 10000 km. PTCL can easily use

the currently deployed network and ensure that it gets the first

right of refusal from existing customers especially due to its

availability of service in a large number of households.

WorldCall over the years have grown into a considerable

force by deploying its network in major urban areas

throughout Pakistan. Currently, WorldCall has a customer

base of around 200,000 in major urban areas. With a OFC

network and an N + 3 architecture, the company is well

placed to compete with major operators such as Wateen,

PTCL, Multinet etc. WorldCall has recently entered into deals

with major carriers (Telenor) and is deploying its metro


network in major cities. This will ensure that WorldCall has

connectivity for its services throughout these selected cities.

Nayatel has deployed its fiber optic in Islamabad and has

quite an extensive coverage of entire Islamabad region. It has

deployed a PON network and is serving the needs of

corporate and consumers using the same network. One of the

major problems that Nayatel has is the non availability of

infrastructure outside Islamabad. Hence, it will always be

dependent on third party arrangements to become a national

service provider.

WIMAX

Four networks (PTCL, Worldcall, Telecard and Great Bear)

in roll out phase (CDMA EVDO) and two more operators

(Mobilink, Wi-Tribe) planning to deploy WiMax

o Wateen is capitalizing on it’s first mover advantage

and also has a differentiated USP

PTCL could venture into this arena by capitalizing on its

laid infrastructure by offering IPTV/DSL/VoIP (POTS),

o Poor health and high maintenance cost of copper

lines is a barrier to entry

Initial cost of the CPEs is a challenge

o Wateen is testing low cost CPE of different

vendors, including Motorola and expecting its

availability in June 2008

Dependency on incumbent for O&M of local loop (DSL)

o Not main product offering

Long development time for FTT(x)

o Wateen will capture market through WiMax and use

its previous experience and influential contractors

resources to expedite the deployment

M/s Mobilink after facing technological problems during

country-wide operations has limited its operations to


Karachi, where again response is not satisfactory. Other

active competitor is M/s wi-tribe which is a joint venture

between Qatar Telecom (Qtel) and the A.A. Turki

Corporation (ATCO), together with a proactive technical

partnership with the Clearwire. Wi-tribe Jordan is the first

operation to launch followed by a plan to launch in other

emerging markets.

Porter’s model for Industry Competitive Analysis is depicted in

below figure.

Figure 4: Industry Competitive Analysis

Following table shows impact of constituent forces.

Force Elements Impact (Low, Middle, High) on Platform

Substitute

Platforms

DSL High (Due to aggressive exploitation of

copper network by PTCL and in-


Competitive Intensity

MotorolaITS

First-mover advantageLowest costsTechnology pioneering

SME/SOHOEnterprisesStudentsResellers

Mobilinkwi-tribePTCLSuppliers

Entry Barriers

Buyers

Competitors

DSLFTTx3 G

HSPALTESubstitute

Platforms

progress of DSL by Wateen)

FTTx Middle as platform needs more time to

market

3G/HSPA/LTE Low till year 2010, high after that

Supplier

Motorola High (being single vendor for platform,

monopolistic approach may hamper

CPE cost reduction efforts)

ITS High (billing system is very crucial in

order to maintain first mover advantage)

Competitors

Mobilink High (Synergy between Mobilink,

Mobilink infinity and Link Dot net will

give tough time to this platform)

w-tribe Low (absence of media will have high

operational costs and it will be very

difficult for them to place competitive

pricing)

PTCL High (exploitation of existing

infrastructure)

Buyers

SME/SOHO High (they can spread positive or

negative word of mouth)

Consumer High (They are in decisive position to

adopt/reject platform’s offering)

Corporate Low (platform can’t offer much services

to corporate in presence of long

haul/metro fibre)

Resellers High (their well-established distribution

network can help in early adoption of

platform’s services)

Entry

barriers

First mover

advantage

High (sustainable competitive

advantage is essential)

Lowest cost High (Price-sensitive market expects

lower cost from this platform)

Technology High (Imitation may destroy this


pioneering endeavor)

Table 4: Impact of competitive forces on platform

8.2. Competitor Reaction M/s Mobilink is actively increasing its long haul and metro network in

major urban areas. This coupled with the acquisition of WOL has allowed

Mobilink great flexibility in terms of operations and products that can be

offered for both consumers and corporate sector. Currently, Mobilink is

not considering entering directly into the fixed lines or corporate

businesses but with investments in infrastructure, it may well be an option

for Mobilink for the future.

8.3. Company Counter Reaction

For company counter reaction, company can work on ERRC (Eliminate,

reduce, raise, create) model. Salient features will be:-

Eliminate price difference

Company needs to offer prices lower than its present (Mobilink) and

potential future competitors like wi-tribe. This should be kept in mind that

market is price-sensitive, so they have to play on volume base.

Reduce 4 I’s

Four I’s are Intangibility, Inconsistency, Inseparability, and Inventory. As

services can not be tasted or touched, so we have to reduce intangibility

through trust and certainty. Inconsistency can be removed by automation,

standardization. We can use our portal by showing standard tariffs, FAQs,

procedure for changing 512 Kbps bandwidth to 1 Mbps and so on. To

ensure that services are produced and consumed simultaneously, we will

have to encourage supplier relationship. Company must undergo market

research to have idea of demand forecast, thus reducing inventory as well

as reduction in lost sales opportunity.

Raise platform awareness


As the technology is new and company needs to invest on platform

awareness. Efforts are required to present WiMAX platform as a

broadband service provider. This can be done through brand activation.

Viral marketing is very much popular among internet users. These tier-1

non-customers need simply hand-holding. For tier-2 and tier-3 non-

customers, referral/influencer markets will be effective.

Create competitive advantage

Four elements constitute sustainable competitive advantage: the way you

compete, basis of competition, what you offer and where you compete.

Wateen Telecom having long haul optical fibre network, metro optical

fibre cable, triple play network in DHA Lahore is well-positioned to

leverage its assets and capabilities to create sustainable competitive

advantage. Wateen Telecom can provide country-wide high capacity

bandwidth. Usage of country-wide transmission media by three telecom

operators (Warid, China Mobile, PTCL) is testament of its competitive

advantage. So, they can take lead in following ways.

Wateen Telecom should adopt passive strategy rather than reactive

strategy. Having more than 30,000 customers on its wireless

platform, company has already shown its strength. Pricing models

are required to be simple and easily conceivable by the consumers

as well as corporate customers.

In order to ensure effective counter propaganda, Wateen Telecom

may create threads on internet, proliferate positive word of mouth.

On public domain, testimonials of corporate users like banks can be

displayed in print media.


9. Products / Service Offerings

9.1. Products / Services offered

Long Haul and Dark Fiber

This platform offers Managed Capacity service to Carriers for managing

their Voice and Data traffic.

Leased Circuits

Wateen Leased Circuits offer managed capacity connectivity

solution for sites all across Pakistan. With its ADM sites in 71

cities, Wateen provides leased circuit services from 2Mbit/s up to

622 Mbps, based on the DWDM fiber network covering all four

provinces of Pakistan. This connectivity is available between

Wateen ADM sites and the service is dependant upon Metro

Network to offer connectivity up to customer premises.

Synchronous Digital Hierarchy (SDH) clear channel protected

connections ranging from 2Mbit/s up to 622Mbit/s are available

and managed end-to-end by and based on Wateen fiber

infrastructure.

Ethernet Connectivity

Wateen Ethernet connectivity service supports point-to-point

transparent Ethernet, delivering 100% throughput and guaranteed

full-duplex bandwidth between the selected end points with low


latency and jitter. Suitable for voice, data and Internet based

applications.

The Ethernet connectivity service is designed to meet the

customer’s demands of flexible bandwidth capacity, just-in-time-

bandwidth, lower cost and Quality of service. The service is fully

based on the Ethernet standards and is delivered over Wateen

Long Haul fiber network supporting capacities from 10Mbit/s up to

1Gbit/s.

Dark-Fiber Service

Wateen’s Dark-Fiber or ‘unlit’ fiber is defined as an actual point to

point physical fiber along a right of way, but is unused and does

not include transmission equipment lighting the fiber. Wateen

provisions and maintains fiber optic capacity between selective

locations where the equipment necessary to power or light the

fiber are provided and maintained by the customer.

Dark-fiber is lightened up by the customer. Regeneration is

required for long distance depending on the kind of technology the

customer will use. For a ‘long’ distance dark-fiber Wateen offers

the fiber combined with Wateen co-location service to re-light it

with regeneration or repeater equipment at Wateen’s facilities. At

Wateen facilities additional services are available depending on

the type of facility like: onsite support, cabling services,

interconnection. etc.

Wateen dark-fiber service includes:

Provision and maintaining fiber optic capacity between

selective ADMs where the equipment necessary to power


Circuit Type Bandwidth Interface Physical Presentation Circuit CharacteristicsFast Ethernet 10-100 Mbps 100BaseT IEEE 802.3Giga Ethernet 100-1000 Mbps 1000Base LX - 1000Base SX IEEE 802.3

or light the fiber are provided and maintained by the

customer.

In case of a “long distance” dark-fiber delivery over multiple

Wateen facilities, these facilities can be used for re-

lighting. For additional services then re-lighting the Dark

fiber service is combined with Wateen’s co-location

service.

Lambda Service

Wateen Lambda service provides 10Gbps connectivity over fiber,

by lightening up a wavelength from the full optical signal (total

capacity of 40 lambdas), stretching up on the whole Long Haul

network. This service does not cater for the last mile connectivity

from Wateen’s ADM to the carrier’s location. Hence, separate

connectivity is required through metro solutions to connect upto to

the exact location of the customer.

The allocation of bandwidth over the lit-up lambda is targeted to

serve as the secondary/redundant link for the carrier, ensuring

high reliability and availability imposed through the Service Level

Agreement (SLA).

Backhauling Solution

Wateen provides access/backhauling solution to its customers

through variety of technologies depending upon customer

requirements and bandwidth constraints. The offered solutions in

this regard are as follows:

Metro Fiber Rings

WiMAX

Microwave

Fiber, Metro Ethernet and GPON


This platform offers Managed Capacity service to Corporate sector for the

purpose of Data Connectivity and VPN

Wi-MAX

This platform has the privilege to offer following products:-

Telephony (voice, video)

Data (Internet, VPN)

Value added services (gaming, security & surveillance)

FTTX

This platform has the privilege to offer following products:-

Telephony (voice, video)


TV (Analog, Digital)

Value added services (gaming, security & surveillance)

DSL

This platform offers following products:-


9.2. Product/Service DeliveryFollowing mechanism to be adopted:-

Business dimensioning by Product & Service dept.

Network planning & design alongwith rollout by Engineering dept.

Pricing models by P&S dept.

CRM module by IT dept.

C&C policy making by Finance dept.

Establishment of sales channels by sales dept.

Positioning/segmentation/brand activation by marketing dept.

Ensuring platform delivery by enterprise office


9.3. Customer experienceCustomer expects following from the platform:-

Always-on broadband internet

Noise free voice communication

Picture Quality and rich choice of Multimedia content on cable TV

service

Customer-friendly touch points

Scalable service provisioning

Minimum downtimes

Customer intimacy with respect to capability of platform to offer

new services

Quality of service

Cost leadership

9.4. Bundling of Products

FTTX/ Wi-MAX

Following are different ways to bundle different product:-

Telephony & internet

Telephony, internet, TV

Telephony, internet, TV, portal

Telephony, internet, TV, portal, gaming

Telephony, internet, portal, security & surveillance, online gaming

However, in order to avoid cannibalization of voice due to telephony

or vice versa, we may de-couple voice and internet for certain areas

based on market research.


10. Customer Support Strategy

10.1. Customer Support Channels

Contact centre is the foremost customer support channel. This is first

contact point for the customer. Customer can launch its complaint at

helpline. Contact centre agent will greet customer and request

complainant certain preliminary questions for “soft troubleshooting” of the

problem. Once it is assured that complaint requires physical visit of field

engineer and trouble ticket will be issued and conveyed to the customer.

The problem will be routed to service delivery team and physical visit of

field engineer will resolve the solution. Accordingly ticket will be closed.

As indicated before, company needs to focus on relationship rather than

transactional marketing. Outbound calls can be originated from contact

centre to customers to greet them at different occasions. Also special gifts

can be sent to high revenue generating customers so that company

maintains relationship with its valued customers.


11. Sales and Marketing Strategy

11.1. Target CustomerCustomer on this platform will be a broadband user. This ranges from

students to young professionals, seasoned professionals and even

housewives. Professionals can further be divided into young

professionals and seasoned professionals.

11.2. Platform

WiMAX gives brings value to the customer in following ways:-

Faster broadband speed

Not having to lay cables reduces costs

Easier to extend to urban and suburban areas

Can be used as overlay to enhance backhaul capacity

Much wider coverage than Wi-Fi hot spots

Higher throughput but with lower cost and lower latency

Indirectly, WiMAX is going to help customers in following

manner:-

Range of technology and service level choices from both fixed

and wireless broadband operators

DSL-like services at DSL prices but with portability

Rapidly declining fixed broadband prices

No more DSL “installation” fees from incumbent

11.3. Sales ChannelsFollowing are the sales channels required for this platform:-

Franchise

SME/SOHO

Corporate/Enterprise

Reseller models like Genuine Intel dealers


In addition to these regular touch points, platform’s product and services

can be offered on specific exhibitions and expos like ITCN.

11.4. Marketing Strategy

Following will be key constituents of marketing strategy:-

Blue Ocean Strategy

For this platform blue ocean strategy will be most suitable. Under this

market strategy, platform will attract non-customers. Tier-1 non-

customers can be brought on board while providing promotional

packages like waivers on installation or upfront charges. Tier-2 & Tier-3

non-customers can be attracted through mass medial campaigns.

As part of the blue ocean strategy, Wateen Telecom needs to think

beyond industry dimensions for WiMAX success. Company needs to

continue focus on existing segments like Corporate, SME, SOHO, Kids,

Housewives, Urban/Rural etc. However, as strategy’s ultimate purpose is

“the reduction of resistance”, so we have to exert our efforts to convert

non-customers to customers. Here, it is suggested to use bundling

technique to target tier-1 non-customers. For all segments, payment is

recommended though pre-paid scratch cards or credit/debt cards. It will

eliminate hassle of post-paid bills or cheque etc.

Choosing between growth & Profitability

From shareholders perceptive, ROA is very important, which is

defined below:

ROA = (profits/sales) x (sales/assets)

ROA is combination of two parts. First one is related to profits with

respect to sales and second one is sales with reference to assets.

Higher profit does not mean that organization is prosperous. As

Pakistan is under-served in broadband market, huge potential exists

for growth. So, organization should look towards second part of ROA


equation. As company has pioneered in WiMAX technology so efforts

are required to expand customer base rather than thinking to make

profits. This is also in-consistent with ambitions to get first-mover

advantage. As Wateen has a very poor presence in voice and internet

market, so it is good opportunity to leverage on its assets and

capabilities (deployment of WiMAX in 22 cities).

Broadband scorecard

Company needs to take up measures that could form a potential

broadband scorecard measuring the overall development of the

broadband market. These measures include:

Average price per Kbps/Mbps, Average speed

Coverage and Take up

Infrastructure concentration

Retail/distribution concentration

Wholesale DSL/Dial-up/Cable competition

Such scorecard will help company to look into what is happening in

the broadband market and what can be done differently to outclass

the competitors.

PoD & PoP

PoD (Point of differentiation) means favorable, strong and unique brand

association based on some attributes or benefit associations. Let

customers be given a choice to bundle different options. For example,

512 Kbps internet package may be bundled with “night free” telephony

and so on. Back end support at billing and customer services should

facilitate such attributes.

PoP (Point of Parity) reflects an association that is not necessarily unique

to the brand. PoPs may be necessary to have a credible offering within a

certain category. As “common man” segment are technology pessimists,

so sustainable competitive advantage can only be achieved for such


segment to provide reliable service so that they start trusting the

technology.

A PoP might also be designed to counter (or negate) a competitor’s point

of distinction. Say a low-cost product by PTCL can be negated by giving

premium quality of service, so quality-conscious user will be willing to pay

a premium price if they are happy with quality attitude about quality is

“Must Have” whatever the price is).

Eye on ball

As indicated earlier that company needs to be proactive rather than

reactive, so continuous improvement on internal weakness is very

important. One such weakness is the AC-operated CPE for WiMAX.

Present energy crisis seems to be worsening in coming days. Under

such circumstances, company needs to work with M/s Motorola to

develop battery-back up system. Otherwise, it’s feared that any SCA

can rescue company out of such situation. Negative word of mouth

will damage hard-earned marketplace.

Understanding the demand drivers

Corporate market landscape suggests that bandwidth capacity, dark

fibre provisioning and other products are required by all segments. It

shows that, for broadband industry, these are essential requirements.

Gaining a sustainable competitive advantage requires an

understanding of both competitive weaknesses and emerging

consumer demand. Consumer demand drivers in the video

entertainment and communication categories are changing.

Specifically, respondents want increased personalization, interactivity

and optimized accessibility to enrich their existing video experience.

Accordingly, the incumbents can tap into this emerging demand while

exploiting the weaknesses of the fixed broadband service providers in

order to build a sustainable competitive advantage.


User-centric broadband services

Company can have sustainable competitive advantage (SCA) by offering

services centered on the users (consumer and business user) which

simplify their broadband experience such that users can access them

using any device, any broadband connectivity, with a single sign-on,

consistent personalization and transparent synchronization across the

devices. Services in which users feel unique and known, and do not have

to think about where to access them, can lead towards SCA.

Tangibilizing the intangibles

Positioning can be defined as below:

Positioning=differentiation (what + how) + segmentation (to whom)

A product or service has a position or image or perception in the

customer mind and this influences the purchase decision. Wateen

Telecom needs active positioning as passive positioning is not likely to

work under these circumstances. On organization level the positioning

has to be based on the theme “We Connect”. On product and service

level, positioning should be different for each product and service. Such

positioning will help company to move towards “tangibilizing the

intangibles” by developing trust and reliability. The company has to think

beyond boundaries just like MCI Communication outclassed AT&T by

introducing “Friends & Family” sales promotion.

Relationship Marketing rather than transactional marketing

Company has to move from transactional relationship to relationship

marketing. Relationship market models include internal, supplier,

influence, referral and recruitment markets. A smart marketer should

try to build up a “long-term win-win relationship with valued customers

as well as all other stakeholders”. In the context of present situation,

following ideas may work.

Internal markets


Employee should be considered as just an extension of customer.

Functional integration is required between CRM, billing, after-sale

service etc.

Supplier markets

Motorola (equipment provider) has invested USD 100 Million in this

project. Their stakes are very high in this venture. Also Intel (chipset

provider) is an important player. Wateen Telecom should strengthen its

ties with these two prominent suppliers. WiMAX got successful in Japan

for the reason that they tried to relocate their supplier closer to them.

Other than Japan, this strategy is being opted by AT&T (on the name of

vendorship partnership); at electronics group Philips in Europe (called co-

makership). This strategy of perishability will help Wateen in (i) matching

capacity and demand, and (ii) adjusting capacity to demand.

Referral markets

Following are potential referral markets:-

Bank Alfalah: This bank is a sister company being member

company of Abu Dhabi Group (UAE). They have about half million

customers having credit/debt cards. Wateen can pitch this affinity

market through bank. There will be no payment hassle.

Employees: Wateen Telecom can initiate a scheme where

employee can refer customers. Employees should be ranked on

the ratio of matured versus referred customers and highest ranker

should enjoy the bonanza.

Customers: Existing customers can refer to other customers.

Upon successful acquisition of new customers, referring

customers should be given discount on their bill or extra free

minutes for phone/internet usage etc. Customer with maximum

referral can also be portrayed on company’s website.

Influence markets


Following influence markets may be used to get favorable “word of

mouth”.

Regulators/Govt. agencies: Company can approach PTA

(Pakistan Telecommunication Authority), the telecom regulator in

Pakistan for lobbying its product & services. The fact that Wateen

Telecom has pioneered this technology in Pakistan should get

endorsement from Regulator. Similarly, recently Wateen Telecom

has joined hands with Higher Education Commission (HEC) for

provisioning of Optical Fibre connectivity to major universities all

across Pakistan (like LUMS Lahore, IBA Karachi, GIKI Topi). This

platform can be used for proliferation of WiMAX product &

services.

Resellers: So far, Wateen has used Franchise model for

consumer segment but it did not work as per expectations.

Another model is to use influencer, say resellers of computers.


12. Impact Assessment

12.1. Business Impacts

Multiple Platforms delivery will bring following business impacts:-

Company can provide novel product & services

Better image of the company in masses as company has

pioneered in this technology and took risk by introducing

under-trial platform

Division will be able to promote customer-centric broadband

applications

12.2. Operational Impacts

Multiple Platforms delivery will bring alongwith it following

operational impacts:-

Better utilization of existing human resources

Pass on experience curve to the new ventures by the

company for off-shore operations. Customer experience can

be shared with international business so that new operations

are run efficiently & effectively based on the best practices

observed in Pakistan

Lessons learnt can be put on central repository and new

ventures can get benefit in terms of “Do’s and Don’t”

Platform will give an opportunity to build cross-silo teams.

Team can communicate plans among themselves, foster

understanding, exchange best-practice experiences and

develop working relationships.

Cross-subsidization: Company can use resource accumulated

in one part of the world (say Pakistan) to fight competitive

battle in another (say Bangladesh, Georgia)


13. Risk Assessment

13.1 Platform Risks

OFC & Managed Capacity Unable to fulfill the SLA due to lack of HR and training

o Operations should be ramped up slowly so as to ensure

Wateen’s reputation does not get damaged

Price War gets triggered in the market

o Wateen’s focus should be to compete on quality of service

and the complete “experience” and not price. If the market

goes into a downward spiral, Wateen should hold its

ground, and lower prices only as a last resort. As a point of

comfort, Wateen’s operating margins are reasonably high,

so as to provide cover in case such a situation arises.

Decision making process slow

o Wateen needs to align itself structurally for rapid decision

making and action. Telecom sector, being extremely fast

paced will require that decision making authority is kept as

low as possible in the command chain.

FTTX

The expansion of the FTTx network across Pakistan is going to involve a

huge investment. The basic characteristic of the triple-play over FTTx is

that fixed-costs are extremely high. Most of the cost is assumed during

network deployment. Conversely, the incremental cost of adding a new

customer to the network is very less. The high operating leverage of the

project results in a significant risk exposure to the company. The reason

is that any deviation from the projected customer-base would have a

magnified impact on profitability.

The second risk that the company will be exposed to is the probability that

it may not be able to meet its expansion targets. A major source of


Wateen FTTx revenue will come from advertisements that will be aired on

either its in-house channels or those channels on which it has acquired

lending rights. The advertisement revenue depends entirely on the

number of subscribers a cable operator has. This, in turn, will depend on

the coverage of the network. Inability to expand the network as per plan

could result in a serious set-back to the revenue stream.

The third risk will arise from the penetration that triple-play can achieve in

the areas covered by the network. The initial targets are going to be easy

to meet since Wateen will be going after the low-hanging fruit first i.e. the

affluent societies. But afterwards, maintaining the penetration targets will

not be easy since it will be difficult to churn price-sensitive consumers

from SEC B to acquire Wateen’s premium services. Added to this is the

fact that unlike rival operators, some of Wateen’s services require the

customer to acquire a CPE (Customer Premises Equipment). This is a

further barrier to entry for the customer.

DSL Desired Colo might not available for installing DSL infrastructure

Delay in Colo Acquisition

o Hire consultant from PTCL who will help Wateen in early

acquisition of Colos

Slow Equipment Deployment by Vendor Huawei

o Engineering has to push vendor for early deployment in

acquired co-locations

Wi-MAXFirst risk is high initial outlay. Initial investment is required for installation

of equipment as well as procurement of CPE. The adoption of platform

may take 3-4 years. Expansion of network will reduce coverage problem,

however. This initial expense will be at stake during this period and

subject to acceptability of the platform. Risk can be mitigated by making

efforts that platform gets acceptability as soon as possible. Once platform


pulls customer, economy of scale (incremental cost will be less once

platform enters into break-even) and economy of scope (introduction of

online gaming and security & surveillance) will reduce this risk factor.

Second risk is giving CPE against PKR 2000 only. This amount is not

going to recover cost of CPE in any ways. For customers who may not be

using platform’s services may not return CPE to the company. As a result,

CPE’s cost will not be recovered fully. This risk has very high impact. In

order to mitigate this loss, its better to ensure that customer is kept live for

longer period. On other hand, win-back campaign id required to covert

sleeping customers into revenue contributors.

Third risk is related to competition of WiMAX versus LTE across the

globe. Both technologies in race to cater for next generation broadband

requirements. Big giants are putting their efforts to take lead. Failure story

in Australia has also psychological impact over the promoters of WiMAX.

But, in parallel, we have success stories as well like in Korea. Company

needs to get involved with Motorola and other WiMAX technologists in

order to cope with threats/risk to this platform.

VSAT


14. Financial Outlook

14.1. Financial costs

Dark Fiber

Average Fiber Length

The expected length (in km) of dark fiber required by the

customer. These requirements have been separately speculated

for Long Haul and Metro, keeping in view the historical

requirements of the GSM Operators since major portion of their

infrastructure feeds on dark fiber requirement.

No. of Pairs

The number of fiber pair(s) required by the customer. In light of

the industry scenario, the requirements never exceed greater than

one fiber pair which is virtually unlimited in bandwidth. Hence,

revenue generation has been calculated based on one fiber pair.

No. of Cities

The expected number of cities where dark fiber for Metro will be

required by the customer. These requirements have also been

speculated in light of the requirements by the GSM Operators as

Metro fiber is also included as part of their infrastructural

requirement.

Managed Capacity

Point-to-Point Connectivity

Point-to-Point connectivity relates to the requirement of the market

in terms of E1s, E3s and STM-1s. Expected revenue has been

calculated based on expected number of E1, E3 and STM-1 links

and average DPLC distance per link.

L2/L3 VPN Connectivity


L2/L3 VPN connectivity is precisely to cater for the data

requirements of the market. Expected revenue has been

calculated based on the number of links and average price per

link.

Microcell/BTS Backhaul

Microcell/BTS connectivity solution specifically targets GSM

operators to backhaul their voice traffic over either WiMAX or

fiber. The expected revenues from this business have been

derived from the number of sites and average revenue per site.

Lambda Service

In light of the above mentioned scenario, the dark fiber

requirement is not expected to follow an increasing trend. Hence,

a lambda (10G bandwidth) will substitute this connectivity for large

government institutions.

FTTX/ WiMAX

Direct costs will comprise of:-

Equipment costs

Commissions on sales

CPE Inventory costs

Vendor payments

Indirect costs include but not limited to:-

Marketing and advertising expenses

Network maintenance costs

General & administration costs at ADMs/hubs

Costs related to Customer relationship management

Contact centre expenses

Initial costs will have key components as:-

CPE


WiMAX base station equipment

OLT and ONT Equipment

Signal Transportation Cost

Edge and core equipment

Site acquisition and civil works

Spectrum license

PEMRA license

Channel license fee

Billing platform

Establishment of sales channels

Ongoing costs will consist of:-

Leased media costs

Space and Power costs for Co-locations

Site leasing fees

PTCL Royalty fees against DSL ports

Network operations costs (like energy bills, security of sites)

Equipment maintenance cost

Sales/Marketing & HRM costs

Customer acquisition costs

Firmware up gradation costs

Allowance for bad debts and churn

General and administration

Who will incur these costs:-

Engineering will incur costs on infrastructure and

preventive/corrective maintenance

Sales & Marketing will have on-going expenses

IT will require budget on development of state of the art Customer

Relationship Module (CRM)

Certainty of costs:-


Must-incur costs include expenses on networks, establishment of

touch points, brand activation/marketing costs

Uncertain costs include subscriber acquisition costs, network

expansion costs, marginal /incremental costs. These costs

depend upon acceptability of products & services offered by the

platform.

14.2. Financial Outlook

Dark Fiber

Managed Capacity

Data Connectivity The assumed bandwidth for the projected ARPUs is 2Mbps keeping in

view the usage by Enterprise on average. Wateen plans an extensive roll-

out plan for FTT(X) which includes further extensions in cities where

Metro is already deployed as well as other cities where fiber is not

available yet. There is a slight decrease in ARPU annually due to various

offerings by the competition. However, Wateen intends to lower its costs


as much as possible and the efforts for this objective have already started

by deploying Metro Ethernet. Still, higher bandwidths will be pushed to

the customers so that ARPU could be maintained as much as possible, if

not increased.

Keeping in view the extensive roll-out plan for FTT(x) expansion, the

number of links, per year, keeps increasing for both Enterprise and SME

markets Such an expansion plan, along with enhancement in technology

(Metro Ethernet) will result not only in more accessible fiber for customers

in potential markets but also lower One Time Costs.

VSAT

FTTX


Wi-MAX2007-08 A 2008-09 F 2009-10 F 2010-11 F 2011-12 F 2012-13 F 5 Year

PROFIT & LOSS $'Revenue 3,251,537 25,793,969 76,055,546 131,589,109 173,596,946 197,828,712 604,864,281Cost of Sales (2,534,362) (8,054,863) (27,229,416) (43,135,282) (56,773,063) (64,974,127) (200,166,752)

Interconnect (2,313,270) (5,922,804) (19,233,831) (36,181,801) (49,333,340) (57,943,743) (168,615,518)Subscriber acquisition costs (177,737) (1,499,587) (6,183,270) (3,911,361) (3,479,154) (2,573,654) (17,647,026)Subscriber management costs (19,897) (36,337) (107,664) (179,902) (232,660) (260,181) (816,745)Royalty (23,458) (596,135) (1,704,651) (2,862,219) (3,727,908) (4,196,549) (13,087,463)

Contribution 717,175 17,739,106 48,826,130 88,453,826 116,823,883 132,854,584 404,697,530Contribution Ratio 22.1% 68.8% 64.2% 67.2% 67.3% 67.2% 66.9%

Operaing Expenses (7,034,162) (31,591,912) (42,422,548) (52,153,673) (60,480,872) (66,478,270) (253,127,274)Marketing (166,615) (5,696,048) (5,982,805) (5,918,295) (5,332,842) (6,200,123) (29,130,113)HR & Admin (1,462,413) (5,676,615) (10,543,843) (13,345,086) (15,963,929) (18,107,511) (63,636,984)Customer Services & Operations (1,646,082) (3,174,345) (5,309,833) (6,801,614) (7,675,923) (24,607,797)Media (3,279) (772) (2,236) (4,407) (5,623) (6,923) (19,961)Network Cost (5,239,193) (17,282,633) (18,916,544) (20,996,575) (23,697,048) (24,596,345) (105,489,145)Management Fee (162,577) (1,289,698) (3,802,777) (6,579,455) (8,679,847) (9,891,436) (30,243,214)Other

EBITDA (6,316,903) (13,852,744) 6,403,580 36,300,175 56,342,980 66,376,324 151,570,315EBITDA Ratio -194.3% -53.7% 8.4% 27.6% 32.5% 33.6% 25.1%


15. Conclusions and Recommendations

15.1. Conclusions

Wi-MAX platform is a promising venture. It’s going to help engulf digital

divide in Pakistan. Once teething problems are over, primary product and

services will get acceptance and value added services will bring

additional revenue streams.

15.2. Recommendations

It is recommended that company must go for this platform in order to

capitalize on its pioneering advantage in this technology. This platform

will help company in converting market space to market place specific to

broadband penetration in Pakistan.

15.3. Platform Delivery Project Responsibility

Product head will be the project sponsor and one person out of the

product managers will be the project manager. Project Manager will

create checklist of all deliverable, get buying in from all stakeholders and

ensure integrated delivery of the platform.


16. Review and Approval

16.1. Review Process

Senior Management team will review the business case and approve it. In

case, approval is not accorded, rationale behind rejection will be recorded

in this document.

In order to keep an eye on market dynamics, this document will be

revised time to time so that it reflects current situation. Revised version

will be circulated to all concerned for seeking valuable suggestions

followed by freezing the document after approval.


17. Supporting Data

17.1. Assumptions

Broadband penetration is assumed to take leapfrog during coming

years

Wireless broadband will lead fixed broadband

Bundled packages are going to get acceptability

Platform is assumed to bring new solutions for existing problems

17.2. Research Information Help obtained from reports by PTA, Ministry of Information

Technology

Information gathered through outgoing calls to existing customers

as well as potential customers

WiMAX forum was also source of information for this platform

book

17.3. Platform Diagram/Architecture

Para 4.4 describes core network and end to end network description.


broadband book

Documents

broadband business

market opportunity

market problem

business impacts

market overview

platform risks

platform diagramarchitecture

platform description