Mobile phone firms facing a competitive, saturated market

NUMBERS can be deceptive. The mobile phone companies, for example, saw their subscriber base grow by a handsome 15pc from over 114m people to 132m in the first 10 months of the ongoing financial year.

The number of consumers using high-speed internet (3G and 4G) services has almost doubled from 14.60m to 28.68m in this period.

But this encouraging spike in the number of consumers using mobile phones and mobile broadband services notwithstanding, the telecom firms continue to struggle for survival in the country’s highly competitive market. Heavy taxation, high operational cost and fierce competition among the mobile phone operators to grab a bigger share in an already saturated market by slashing their prices are cutting into their profits. On top of that, the over-the-top (OTT) voice and messaging apps offering these services free of charge have left them with little to reinvest in infrastructure for improving their services.

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At present, the 4G penetration rate is said to be just 4pc of the total market

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The State Bank of Pakistan though insists that the increased use of mobile broadband services is helping improve financial health of ‘most’ telecom firms, the average revenue per user is still below $2 a month. Hence, the industry finds little appetite for another spectrum licence the government is trying hard to sell to raise Rs65-70m to cut its deficit.

The planned spectrum auction had to be twice cancelled this year on account of lack of interest shown by the operators.

Foreign direct investment in the telecom industry peaked to $1.91b in 2007 before drying up in the latter years. The only spike in FDI in the industry came in 2014 when $429m flew in on account of spectrum auctions to plunge again to $121m next year.

“The ARPU in China is $15 a month and spectrum is free of cost,” Liu Dianfeng, chief executive officer of Zong, a China Mobile company, told Dawn in an interview last week. “All the (five existing) operators are heavily losing money (on their investments). China Mobile, our parent company, has invested $3bn in infrastructure and for acquiring high-speed 3G and 4G spectrum licences during the last seven years. China Mobile has 31 provincial companies in China with returns as high as 20pc on the annual revenues of more than $100bn. But here we so far are losing money (in Pakistan).”

Wishing the government success in its planned spectrum auction in June, he hinted at staying away from the auction. “There is an upcoming auction next month… but I don’t know who’ll be attending it from the operators.” Nevertheless, Liu said his company, the country’s third largest mobile phone operator with a market share of a fifth of the total mobile phone subscribers, including 5.77m users of 3G and 584,000 users of 4G services, will continue to invest in infrastructure to expand network coverage, improve quality of services and enhance experience of users of its high-speed internet.

The firm plans to invest $400m in infrastructure this year with intentions to invest more in transmission next year. “We want to invest in our telehouse, and bring international content here for better experience. Initially, it can be free for our customers,” the CEO said.

He said the company’s investment in areas where power was not available goes very high. “Electricity support is a challenge to us; unavailability of power raises our cost of operating business. We’ve to spend a lot more to run generators as well as on security and maintenance.”

The only operator with 4G spectrum licence is finding it hard to penetrate into the 4G market. “It’s a big challenge as the government has imposed a new tax on smart phones that is hampering our effort to penetrate into the mass market. When we as a business talk about smart phone penetration we talk about mass market because the bigger the volumes we have the bigger the earnings we have,” Liu argued.

At present, the 4G penetration rate is said to be just 4pc of the total market.

Heavy taxation, the industry insists, is a major impediment to growth of data revenues. Initially, there was only sales tax on operators. Now there is voice tax, data tax (in Punjab and Khyber Pakhtunkhwa), and on top of that the one-time tax on handhelds.

Currently the industry is negotiating with the provincial governments for withdrawal of data tax. But the provinces want the telecom companies to offer special discounts on their tariffs in their territories in return. “Actually, this is a national issue and every operator has its own pricing strategy. We also have our own strategy for different regions. For example, we offer special packages to customers based on their specific regions and requirements. This is an industry issue so the industry is in continuous discussions with the government,” the Zong boss contended.

Liu pointed out that the overall tax burden on the companies was as high as 44pc of their revenues. “Last year, 41pc of our revenues was paid as tax. In the first quarter of 2016 to March, it increased to 44pc of revenues. In order to penetrate into the mass market we need to offer cheaper bundles and packages to consumers. But, currently, we cannot afford to develop cheaper bundles owing to the high taxation or we will not be able to meet our expense.

Liu agreed that future revenues for the telecom companies will come from data traffic. “At present, data revenues form 20pc of Zong earnings. Our focus in 2017 would be to have revenue from data at around 30pc. The data traffic model in Pakistan is slow to grow. Revenues from voice may be difficult in the future, but we must push data traffic to advance in this field. No one at this time can ignore the internet; it is business for us and we must accept this new business. No one can be exact about the future, but we are hopeful that our data revenue will continue to rise.”

The CEO said “it is difficult to make profit in this market, but we definitely will work hard to have the top network in the nation and support the many number of (CPECT-related) projects announced by the president of China. We will leverage the friendship of both countries to grow our network. We will support CPEC through providing the communication as well as end-to-end solutions of better and more advanced management. 4G will provide speed to connect the CPEC with centralised management system for all these projects. There is a lot of information which will be useful for managing the CPEC projects successfully, and we will act as an operator to provide that information through our 4G technology.”

But that is not his only plan for raising his company’s revenues. “The return on investment will come in many forms to us. Maybe in the future we can think about buying another operator and charging IoT (internet of things) while our subscribers continue to get them free of cost.”

Here's what the Figuratively Speaking art show wanted to portray

A four-person show titled Figuratively speaking opened at the Canvas Art Gallery on Tuesday. As is the usual practice, there is a theme to the exhibition and, at the same time, the participating artists’ works can be interpreted individually. After all, each artist has a distinct expression.

Veera Rustomji impresses with her examination of filial bonds and their associations in diverse cultural milieus. She puts pictures of people in groups and sets them in a situation which instantly raises questions in the viewer’s mind, because the viewer becomes interested in both history and culture of the protagonists. It is not easy. Veera gives a big clue in the exhibit ‘Does the white space make you feel uncomfortable?’ (oil on canvas) by letting the viewer know that the faces of her characters, not to mention some of their places, will not be given away readily. Whoever is watching them should connect the dots themselves. To each, his own.

An artwork by Veera Rustomji

Similarly, Heraa Khan explores a certain (privileged) segment of society’s disconnect from the rest of the lot (not-so-privileged ones). The technical route that she opts for is quite different. Her piece ‘Tawdry’ (gold lead and gouache on wasli paper) is a nice example of it. There is a fair degree of craft involved in her work, which indicates her fondness for miniature art.

Missing since by Syed Hussain and untitled iron work Umar Nawaz

Syed Hussain, as his statement suggests, belongs to the Hazaras of Pakistan who have faced a great deal of difficulties. The artist poses, and responds to, the question of identity by using his family’s old documents to revisit their stories. He uses the word ‘decode’ instead of revisit, which is layered with meaning, as is his artworks.

Umar Nawaz’s untitled iron work plays with the idea of content in relation to form (or is it the other way round?). It is an interesting effort since it also tries to engage the viewer in analysing how the eye perceives or can perceive a single object in multiple ways.

The exhibition will remain open till June 2.

What Bill Gates thinks you should read this summer

Oprah has her book club. Mark Zuckerberg had his Year of Books. And Bill Gates has his annual reading lists — book recommendations shared each year by the Microsoft founder and philanthropist.

Gates’ 2016 list of summertime reads, complete with an animated video describing his picks, was released on Tuesday in a post on his blog, GatesNotes. Light beach fare, it’s not. Four non-fiction books about math, the role of energy in biology, Japan’s economy and the history of the human race — plus an 880-page science fiction novel described in one review as “thought experiment as extreme sport” — round out this year’s five suggestions.

“This summer, my recommended reading list has a good dose of books with science and math at their core,” Gates writes. “But there’s no science or math to my selection process. The following five books are simply ones that I loved, made me think in new ways, and kept me up reading long past when I should have gone to sleep.”

Four non-fiction books about math, the role of energy in biology, Japan’s economy and the history of the human race — plus an 880-page science fiction novel described in one review as “thought experiment as extreme sport” — round out this year’s five suggestions.

A wonky reading list might be expected, of course, from a leader who founded both one of the world’s largest technology companies and a foundation working to try and fix global poverty, public health in the developing world and America’s education system. Of the few dozen books Gates has reviewed, recommended or put down to read himself on his summer reading lists, only three have been novels, along with a couple of comic books last year. And only a couple — the out-of-print 1991 book Business Adventures by John Brooks, and a memoir by entrepreneur Eli Broad — would qualify as business books.

The rest are culled from fields as diverse as economics, science, history and psychology, with a few biographies thrown in. They’re also often long: FromThe Better Angels of Our Nature (2012, 832 pages) to The Quest (2012, 816 pages) to The Bully Pulpit (2014, 928 pages), Gates isn’t afraid of hefty reads. He often writes reviews of the books he reads, and if his summer lists aren’t enough serious reading for you, Gates puts together lists of his favourites of the year in December, too.

So what’s on this year’s summer list? Below, his five picks, with snippets from his reviews:

Seveneves by Neal Stephenson

“You might lose patience with all the information you’ll get about space flight — Stephenson, who lives in Seattle, has clearly done his research — but I loved the technical details. Seveneves inspired me to rekindle my sci-fi habit.” A virtual reality video of Gates and Stephenson chatting about the book and stopping for burgers together is embedded in a new online review, where Gates says the book “pushes you to think big and long-term”.

How Not to be Wrong: The Power of Mathematical Thinking by Jordan Ellenberg

“The book’s larger point is that, as Ellenberg writes, ‘to do mathematics is to be, at once, touched by fire and bound by reason’ — and that there are ways in which we’re all doing math, all the time.”

The Vital Question: Energy, Evolution, and the Origins of Complex Life by Nick Lane

“Nick is one of those original thinkers who makes you say: more people should know about this guy’s work ... Even if the details of Nick’s work turn out to be wrong, I suspect his focus on energy will be seen as an important contribution to our understanding of where we come from.”

The Power to Compete: An Economist and an Entrepreneur on Revitalizing Japan in the Global Economy by Ryoichi Mikitani and Hiroshi Mikitani

“Japan is intensely interesting to anyone who follows global economics. Why were its companies — the juggernauts of the 1980s — eclipsed by competitors in South Korea and China? And can they come back? ... The Power to Compete is a smart look at the future of a fascinating country.”

Sapiens: A Brief History of Humankind by Yuval Noah Harari

“Harari takes on a daunting challenge: to tell the entire history of the human race in just 400 pages ... Although I found things to disagree with — especially Harari’s claim that humans were better off before we started farming — I would recommend Sapiens to anyone who’s interested in the history and future of our species.”

—By arrangement with The Washington Post

Gas delivery start-ups want to fill up your car anywhere. Is that allowed?

A new crop of startups are trying to make gas stations obsolete. Tap an app, and they’ll bring the gas to you, filling up your car while you’re at work, eating breakfast or watching Netflix.

Filld, WeFuel, Yoshi, Purple and Booster Fuels have started operating in a few cities including San Francisco, Los Angeles, and Palo Alto, California; Nashville, Tennessee; and Atlanta, Georgia. But officials in some of those cities say that driving around in a pickup truck with hundreds of gallons of gasoline (petrol) may be unsafe.

“It is not permitted,” said Lt. Jonathan Baxter, a spokesman for the San Francisco fire department. Residents seeing any companies fueling vehicles in the city should call the fire department, he said.

Yoshi, which operates in San Francisco, was surprised to hear Baxter’s concerns. “We haven’t talked to them. I don’t know about that. It’s news to me,” said co-founder Nick Alexander. The next day, he said he believed Yoshi was following the law and that it had limited the size of its gas tanks to stay under limits outlined in the International Fire Code, a guideline followed by many US states.

Filld, an 18-month-old startup with thousands of customers in Silicon Valley, plans to start service Monday in San Francisco with three delivery trucks. “You can never ask for permission because no one will give it,” Filld Chief Executive Officer Chris Aubuchon said.

The Los Angeles Fire Department said it’s drafting a policy around petrol delivery. “Our current fire code does not allow this process; however, we are exploring a way this could be allowed with some restrictions,” said Capt. Daniel Curry, a spokesman. “It’s just one of these things that nobody has really thought about before — kind of like how Uber popped up out of nowhere.” But he said it’s not a gray area: “All I can tell you at this time is it’s not allowed as per our current fire code.”

Bruno Uzzan, CEO of Los Angeles-based Purple, said his company is in discussions with the fire department. “I don’t know that guy,” he said of Curry. Asked if Purple would stop delivering gas, he replied: “No. Why should we?” Later, Uzzan said, “The way we currently operate is permitted by the code.”

In the San Francisco Bay Area, Booster Fuels told customers in February that it was halting fuel delivery there at the behest of the Santa Clara Fire Department. The company said the city is reviewing its permit application. Filld’s Aubuchon said that fire department also told his company to cease operations, but Filld has continued operating. “We basically said, ‘We strive to be safe in every way to the consumer, and this is exactly what we do, and we welcome dialogue,’” he said. “If it was illegal, they would have and should have told us many months ago.”

Jennifer Yamaguma, a spokeswoman for Santa Clara, said the city manager is compiling a report on gas-delivery businesses, which the city council will review. Atlanta’s fire department referred a request to the Georgia Department of Transportation, which did not respond to a request for comment. The fire department in Nashville declined to comment.

“We have to look at the safety of everyone,” said Baxter, the San Francisco fire department spokesman. “You could imagine what could happen if a fueling truck went into a parking garage under a commercial or residential building, it would not be a good outcome.”

On a recent Monday morning, about 40 miles south of San Francisco, Aubuchon carefully drove a Ford F-250 pickup truck with 324 gallons of petrol into a hospital parking garage in Palo Alto, Calif. The truck-also loaded with a gas pump, two fire extinguishers, a bucket of chalk to absorb spills, two orange traffic cones and a receipt printer-nearly grazed the ceiling of the garage as its radio antenna whipped around. Aubuchon was looking for a silver Mini Cooper.

After a few wrong turns, he found it. The tiny car’s gas flap was, to his relief, open. Aubuchon unrolled the gas hose from a spindle in the truck bed, clutched the handle of the fuel nozzle, stuck it in the car’s tank and began filling the Mini Cooper. After six gallons, the car’s tank clicked. A printer in truck’s cab spit out a paper receipt, and he transmitted an electronic receipt to the owner of the Mini Cooper. Then he packed up his supplies and drove away.

“The land value in the city is going up, and the gas stations are becoming more and more sparse,” Aubuchon said. “This is a disruption to a fuel industry.”

Construction companies, farmers and even some isolated homes have been paying fuel delivery companies to deliver large quantities of diesel fuel and sometimes petrol for years. But lugging hundreds of gallons of gas through residential neighbourhoods to fill up people’s cars while they sleep is new.

“Those larger tanks, while they carry that many gallons for efficiency, if there is a turnover or an accident of one of those, it really is like a big bang; you have problems when any one of those has an accident,” Aubuchon said. “The size of our tanks is much, much smaller, and we have multiple of them. So for us to have a spill of their caliber, we’d have to have a hundred trucks in a row.”

Yoshi, the company that delivers in San Francisco, was founded by two Harvard MBAs, a former Harvard law student and a former Stanford medical researcher. The startup also operates in Nashville and Atlanta. Booster Fuels has $12 million in funding and big purple trucks that can each carry 1,000 gallons of gas. It fills up tanks in parts of Northern California and Dallas-Fort Worth. There’s also WeFuel, which put its first two trucks on the road in California’s Mountain View, Los Altos, Palo Alto and Menlo Park in January and is developing technology to notify the company when a customer is running low on fuel.

Purple has a fleet of about 80 cars driving around Los Angeles, San Diego, Orange County and Seattle with up to a half-dozen five-gallon gas canisters in the trunk. “We wanted to give an option to drivers to skip the gas station, as if they were ordering an Uber or a Lyft,” said Uzzan.

Speaking of ride-hailing services, some of Purple’s drivers pick up passengers for Uber between refuel gigs, according to Uzzan. Uber declined to comment.

Selling gas in the US is a big business. In 2014, 10,545 gas stations collectively sold $534.7 billion worth of petrol, according to the US Census Bureau. Those gas stations earned a cumulative $66.6bn after accounting for what it cost them to buy the gas.

The startups generally share two intuitions about the gas business: One, owning a truck is cheaper than owning a gas station, and two, the more fuel they sell, the less they’ll have to pay per gallon for their gas. Aubuchon, a former venture capitalist, said the company can buy and equip a truck for $50,000, compared with $2.25m for a gas station. Filld charges a delivery fee of up to $5 and then asks the same price per gallon for gas as the least expensive nearby gas station.

The delivery startups are still experimenting with business models. Purple customers can open the company’s app and get gas within an hour, and their drivers are regular people with no special certification. Filld operates around the clock but asks customers to schedule a delivery through their app at least a few hours in advance. They employ commercial drivers who receive Hazmat certification. Both Purple and Filld deliver to residential areas, while Yoshi and Booster are focused on filling up gas tanks in office parking lots. Yoshi’s trucks are similar to Filld’s. They’re pickup trucks driven by professional drivers. Booster exclusively cuts deals with businesses to fill up their employees’ cars during the workday. Its drivers have commercial licenses.

The regulatory challenges are ongoing. For example, counties must certify whether a gas meter is calibrated correctly, so it can ensure that customers aren’t getting overcharged for petrol. Stan Toy, deputy sealer at the Santa Clara County Department of Weights and Measures, said his group has examined and approved meters from Yoshi, Filld, WeFuel and Booster. The department doesn’t inspect a truck’s fuel tanks. “We don’t know who they fall in, regulation-wise,” Toy said.

The California government agency that oversees the state’s fire marshals office is convening a meeting on May 24 to discuss mobile fueling. It doesn’t believe the startups’ current operations “meet the requirements to be able to operate safely,” said Lynne Tomachoff , a spokeswoman for the agency. “There are so many tentacles to this whole issue.”

Back in March, before the San Francisco fire department told Bloomberg that fuel delivery was prohibited, Alexander ticked through the regulators that Yoshi had run into. He said highway patrol inspected the truck but didn’t quite understand the industry. “They don’t know what to really make of it,” Alexander said. He said one county department of weights and measures initially told Yoshi that it wouldn’t be possible to certify a gas pump bolted to the back of a pickup truck. Then the county changed course and gave the go-ahead. “Once you’re approved at one, it carries over” in California, he said.

Then he got to the fire marshals. “There’s nothing specific that you have to get them to cross off, but they have jurisdiction over everything,” Alexander said. “It’s kind of fuzzy.” San Francisco’s fire department doesn’t agree.

Noah Doyle, an investor in Filld, said that for the nascent fuel delivery space, safety wasn’t so much a risk factor as a barrier to entry: “You simply have to jump through the hoops with the local authorities to educate them and get them comfortable.”

Bloomberg-The Washington Post Service

Published in Dawn, May 8th, 2016

Censor board speaks up, says Maalik ban was initiated by film viewers

After a brief on-and-off ban episode on Thursday, Ashir Azeem's political thriller Maalik was slapped with an indefinite ban.

The notice issued by the Ministry of Information, Broadcasting and National Heritage, declared it “an uncertified film for the whole of Pakistan”, and furnished no reason or rationale for it.

Until a day later.

Yesterday, the Chairman of the Central Board of Film Censors Mubashir Hasan released a multi-point rationale for the ban, which includes the film's portrayal of the police and politicians, ethnic stereotyping, glorification of a former militant, mockery of the democratic voting process, and incitement to violence, among others.

The CBFC maintains that these objections to the film have been raised by the film's viewers themselves.

"After the 3rd day of the release of the local movie “MAALIK”, a plethora of public complaints started pouring in to the CBFC from across the country," writes Chairman Hasan. "Complainants expressed their extreme reaction against the movie through phone calls/letters/personal visits to the CBFC."

Their "extreme public anger and reaction against the movie and the threats to burning to ashes of cinema houses" prompted the CBFC to advise the Ministry of Information to decertify the film, as per Section-9 of Motion Picture Ordinance-1979, which has been used in the past to revoke the certification of films like Sher-e-Punjab and Intehaa.

Here's the full text issued by the CBFC:

1) After the 3rd day of the release of the local movie “MAALIK”, a plethora of public complaints started pouring in to the CBFC from across the country

2) Complainants expressed their extreme reaction against the movie through phone calls/letters/personal visits to the CBFC.

3) According to the complaints, the movie has presented Pakistan an as a lawless state where the state institutions are shown as crippled, inefficient, incapacitated hence openly inciting the common citizen to take law in his/her own hands.

4) As per complaints by the viewers, the movie has dejectedly targeted all the linguistic communities living in Pakistan. The Pashtuns, the Balochs and Sindhis have lodged their protest in particular that their communities have been shown in an unwanted and insulting manner in the movie which hurts their sentiments.

5) Members of the civil society also objected that the movie has shown a ‘ celebrated and heroic death’ of a former Afghan Jihad Mujahid in the end which is against the spirit of the National Action Plan being implemented jointly by the political and the military leadership of the country.

6) A large number of political activists lodged complaints that the movie has presented the role of politicians as a whole as morally and financially corrupt. One of the central characters of the film is shown as a feudal politician who rises to the seat of Chief Minister through unfair means. The politicians are shown to be corrupt, immoral and dishonest with the people. The movie gives people the impression that the entire political system is unjust, corrupt and incapable and all the politicians are busy in minting money under the name of democracy.

7) Political activists also expressed their reaction to the CBFC about the way the movie has demeaned the sanctity of votes during elections. The movie has humiliated the voters by showing the politicians who are elected through their votes as in a villain character.

8) The families of the shaheed police officials from across the country also complained after watching the movie that the police as a whole is shown as a crippled, contemptuous,unjust and corrupt force. The police force is presented in the movie as always working in the interest of the politicians disregarding its duties. The film has given the impression that the entire police force of the country is incapable and corrupt thus draining down the sacrifices made by the police as a front defence line in the war against terrorism.

9) A large number of complaints from KPK province has also been received which state that the movie has hurt the sentiments of Pashtun community by showing the rape of a Pashtun girl by a seemingly Sindhi politician. The complainants have expressed that the rape scene has caused bias, prejudice and hatred among different ethinic communities of the society living together in Sindh.

10) After carefully analyzing all the complaints, the Central Board of Films Censor, as a responsible state institution and functioning under Rules of Business dispatched a “Situation Report” to the Ministry of Information, Broadcasting and National Heritage highlighting the extreme public anger and reaction against the movie and the threats to burning to ashes of cinema houses by the hurtful citizens. Accordingly, the CBFC proposed to the Ministry of I, B & NH to decertify the film as per Section-9 of Motion Picture Ordinance-1979 in order to avoid a major catastrophe and a law and order situation and also to safeguard the life and property of the cinema owners throughout the country. Section 9 of the Motion Picture Ordinnace 1979 empowers the federal government to with draw or decertify any film under exhibition even after issuance of the censor certificate.

Many locally produced under exhibition films had been decertified by the federal government during the previous regeimes which include Sher e Punjab, Intehaa, etc etc

11) It is pertinent to mention that the non-official members of CBFC who censored the film ‘Maalik’ and passed it without excision for public exhibition have been issued notices to convey the public reaction against the movie.

12) The offer of the Info Minister of KPK to hold the exhibition of the Maalikin any cinema of KPK is not possible as KPK has yet to establish its own Censor Board. Till date, the Central Films Censor Board regulates the cinemas located in the KPK by surprise inspections to ensure that the provisions of the Potion Pictures Ordinance 1979 are followed in letter and spirit. If any cinema exhibits the movie Maalik, appropriate legal action will be taken against including fine, imprisonment and sealing of cinemas.