Its Warids tenth anniversary and it can smile at the occasion. A year and a half ago, the fifth-ranked telco didn look likely to stick around for long.
Warid had earlier been put up for sale twice by its parent, the Abu Dhabi Group, only to find hesitant suitors. It avoided the 3G/4G spectrum auction that took place in April last year. While all other operators launched 3G services by mid-2014, Warid lurked in a corner.
A year later, Warid is Pakistans top 4G/LTE operator, beating cash-rich China Mobiles Zong in the segment. (For simplicity, think of 4G and LTE as different standards for similar technology). PTA data show that as of April, Warid had 79,213 LTE subscribers compared to 61,964 users of Zongs 4G service.
However, company officials at a recent discussion put latest LTE subscriptions at 100,000. Besides, they claim that the firm now has the largest number of post-paid users in the industry, roughly 0.7 million among its 11 million users. They insist that Warids bet to use existing spectrum for both 2G and LTE services has worked out so far. The allocated frequency in the 800MHz band is being used for voice while LTE is run on the 1.8GHz band.
Warid can keep on having this spectrum management regime until users hit 20 million, a point where more spectrum may be required, thus leaving open the possibility of participation in a spectrum auction, they noted. Right now, Warid is little above half that mark.
It seems that the Lahore-based operator is making its presence felt. Jumping straight from 2G to 4G reflects that the core of the firm – network optimization – is intact. Officials say that Warid LTE is now on offer in 12 cities, with plans to double this footprint. Having invested over $100 million for both LTE and 2G lately, they insist that the network roll-out would be even aggressive in near future.
But the road ahead will not be without challenges. Six months since LTEs launch, less than 1 percent of Warids 2G users have converted to LTE. Granted, 4G subscriptions will not have a growth curve like 3G (there were nearly 13 million 3G users as of April), but Warid LTE could have lapped up a greater portion of the firms post-paid users, who are usually associated with heavy cellular spend and high-end smartphones.
The conversion from 2G to LTE seems to be hampered by pricey LTE handsets, whose availability is also limited. Moreover, intuitively speaking, majority of consumers in the addressable market will take time to transition to 4G/LTE, only after they have tried 3G. While handset prices have been coming down, educating potential customers on the finer differentiating aspects of 4G/LTE from 3G may require creative marketing.
But it must be noted that 4G or LTE is not a short-term project in any market. Perhaps that explains China Mobiles early entry into this segment with a yet low-key footprint. As 3G subscriptions gain further mass, people would like to graduate to the next, higher connectivity experience that is 4G and LTE. So, in a way, other operators are doing this market-making for Warid, which is hoping to make itself synonymous with high-speed mobile broadband.
Warid is back, and it is relevant again in the local telecom scene. However, it still has to ride out the ongoing period of high capex and low operating income before a critical mass of high-usage data subscribers starts generating
Source: Business Recorder