Cellphones: Engines Of Growth
According to the latest figures, Pakistan has a population of 180,854,781; until last week, there were a total of 140,000,000 cellphones in use. The coverage, according to these statistics, was 77 connections per 100 citizens. When it comes to landlines, PTCL has issued a total of 6 million connections so far, which comes to 3 connections per 100 citizens. According to the latest figures, over 30%, or approximately US$2 billion, of the foreign direct investment that comes to Pakistan is intended for the communication sector - & this spike in interest in Pakistani investment ventures came after cellphones were introduced in the country around the turn of the century. The Information & Communication Technology (ICT) industry currently nets approximately US$3 billion per annum & is expected to cross the US$10 billion mark by 2018.
Things were looking very positive for the ICT industry & the economy in general - until April 13, 2015. On that Monday, approximately 12 million SIMs were blocked. In a few seconds, nearly 10% of the law-abiding cellphone subscriber market was shut out, in the name of national security.
When it comes to life in the Developing World, nothing is perfect. In terms of cell service, cellphone batteries frequently had to be replaced, voice quality was unreliable, texts were slow, signals were jammed in honor of nearly every public event & holiday; but people still had the assurance that when all was said & done, they would still have the option to communicate long distance with family & friends, without having to rush to the nearest Public Call Office.
Past Experience
But this isn't the first time that cellphones were blocked to see whether cell service has a causative link to criminal intent or psychopathy in general. The last time this experiment was carried out was during the 2008 Financial Crisis. Considering that the blocked SIMs were quietly re-activated without any fanfare after a few months, it is assumed that no such link was found. Or perhaps the headlines in every major newspaper about the possibility of getting up to 6 Computerized National Identity Cards (CNICs) per head (for a price), triggered a flash of insight. But the experiment did cause countless people plenty of inconvenience during the application period.
When it was over, the positive thinkers told themselves that now that the authorities had satisfied their curiosity & documented the experience for posterity, the common man would not have to contend with this source of botheration a second time. But, in an odd interpretation of the Circle of Life, here we are again!
Future Economic Ramifications: PTCL & The Banking Sector
The PTCL is under the microscope these days on a series of charges related to importing signals equipment deliberately mislabelled either to avoid paying a higher amount of tax, or to conceal the real purpose of the imported equipment. If proven guilty, the costs are expected to be huge. PTCL's most profitable venture is its landline business. The SIM blockage project will definitely increase the importance of telephones, which were becoming increasingly irrelevant in the last few years.
Banks, especially brands like Allied Bank Limited & Askari Bank Limited, which are facing fraud investigations or shrinking customer bases, will take on renewed importance, because the increasingly-popular mobile banking market is expected to take a noticeable hit from the new policy.
Future Economic Ramifications: The Cell Service Providers
Assuming this policy is here to stay (this time), it spawns a number of very important (& currently unanswered) questions:
1. "To err is human." (Alexander Pope)
Every policy is supposed to have a shelf life, during which its efficacy is judged: what happens if (as most legal experts predict) SIM blockage is as ineffective an anti-crime measure this time as it was the last time?
2. "Everything has a price." (Harry Browne)
Each cellphone service provider is issued a specific quota of numbers they sell to their subscribers; if 12 million of those numbers are going to be blocked, how will the authorities compensate for that reduction in their legally-permitted number of customers?
3. "There is only one boss: the customer." (Sam Walton)
Each cell service subscriber in Pakistan spends at least US$2 per month on cell charges. Many spend far more than that, but a minimum figure will come to US$24 million per month! This is counting the minimum prospective outgoing calls & texts from the now-blocked SIMs. The figures for incoming calls to these SIMs have not been included. The only firm that can be counted on to look beyond the expected revenue losses is China Mobile, because of the special brotherly ties between Pakistan & China. But what about the others?
Unless the strategy to guarantee the security of the citizenry is adjusted soon, the result will be that national security may or may not improve, but economic security will definitely deteriorate.
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