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© ComNews
25.04.2007
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| DIALLOG with Pakistan |
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In November 2004 during an open auction, Great Bear International Services (Pvt) Ltd. received the right to create and exploit the fixed wireless communication network of CDMA-450 in the five largest license region of Pakistan. It is interesting that Great Bear is the company with 100% of foreign capital, and among its investors are Belorussian and Ukrainian citizens. Great Bear's CEO is Mr. Artem Orange, who previously headed Belorussian CDMA operator BelCel.
Artem Orange came to Pakistan for the first time in August of 2003; at that time it appeared that deregulation of the Pakistan telecom market was upcoming. During the meetings with advisors to the Prime Minister, PTA head and Minister of IT and Comms, the information about the upcoming reform was confirmed. "Aside from that, it was evident for me that Pakistan is a modern and dynamically developing English speaking country, where one may comfortably work," remembers Artem Orange.
At the time of Artem's first visit to Pakistan, BelCel, headed by Artem, transferred from analog NMT-450 standard to digital CDMA-450 standard in Belarus. And from July 2003 it started offering services under the DIALLOG brand.
However, coming out of crisis for BelCel was not without difficulties. The new technology standard brought new capabilities to the company, and the new brand brought a lot of attention from the press and experts, which also resulted in government attention towards the company. Some of the government bureaucrats pushed the company owners to create a shareholding structure. Because of this pressure, the foreign investor of BelCel limited its financing of DIALLOG, and the management has been reshuffled.
Because of this, Artem Orange tried his luck in Pakistan, which was more loyal to foreign investors. He was supported by a group of his colleagues including former foreign owners of BelCel.
"There are not many countries where the process of licensing of communication services is so transparent, where a foreign structure that is not well-known could simply come and win most of the licenses that it was interested in in the open field," says Orange.
In May 2004 there was a tender for licenses and frequencies to create WLL networks in 450 MHz, 479 MHz, 1900 MHz and 3500 MHz for the period of 20 years.
To participate in the auction, Orange and friends bought Great Bear International Services (Pvt) Ltd., which was created in 2001 but did not operate since then.
"We decided to limit ourselves to one frequency spectrum," says Artem Orange. "We chose 450 MHz, as we had good experience in that spectrum in BelCel." Great Bear applied for licenses in the eight most populated regions out of 14, and won licenses in five (with 50 million people each).
"Despite the maximal openness of tender and auction access, the only foreigner at the auction table was myself and my colleague from Belarus. The rest of the participants were locals," says Orange.
After receiving the frequencies in November 2004 we started thinking about our business strategy. "It was clear that we couldn't lead this new business remotely, and in January 2005, as a CEO of a new company, I came to Pakistan," says Orange.
The company decided to begin its work with Islamabad, where there was a good demand for cellular services. When the question of trade mark was raised, we decided to revive the DIALLOG trademark. As Orange says, "Our trademark has great flexibility and convertibility. It's not bound to a certain language environment, and its green logo was also ideal for a Muslim country."
The first fragment (18 BTS) of the DIALLOG network was launched in Islamabad commercially in August 2005. Without the local co-owners and credit history, the company developed itself at its own expense - private shareholding capital.
"To work and develop the company in the tight competition it was necessary to choose one main strategic direction. We chose high quality of services," says DIALLOG CEO,
"so that subscribers coming to us not only stayed with us for a long time, but also recommended our services to their colleagues, relatives and friends."
The second vector of development has become VAS. DIALLOG was the first on the Pakistan market who offered a fully functional Ring Back Tone Service. The most popular service so far has been the religious IVR-portal (it's the only product of this nature in Pakistan).
By May 2007 DIALLOG is planning to reach the cornerstone of 50,000 subs in Islamabad and Ravalpindi (over 2.5 million people).
The leader of Pakistan's WLL market, PTCL, is providing services to 700,000 subs in its CDMA-450 and CDMA-1900 networks, however on Diallog's territories it has less subs than Diallog.
DIALLOG's ARPU remains USD 10 per month, while other GSM operators have less than USD 4.5.
To strengthen its position on the market the company needed new investments. And in 2006 owners of DIALLOG began looking for opportunities to invite new partners.
"Pakistan's telecom market is consolidating and it is unwise to remain a small company with private capital," says Artem.
Great Bear is in the process of negotiations with several potential partners from EE and ME. Russian AFK Sistema also expressed great interest in it.
In the spring of 2007 DIALLOG began the next phase of its development and launched a network in Lahore (the second largest city after Karachi), its new licensed region.
The company already bought Huawei equipment for new regions - and overall investments at this project exceed USD 20 million.
"To be successful in the long term we need to have a much larger presence in the country. And we are ready for nationwide expansion," says Orange. "We are also interested in neighboring countries like Afghanistan and Bangladesh."
DIALLOG shareholders decided to create a national operator in the CDMA-450 standard.
One step towards this aim was made on April 13, 2007, with the purchase of a local company that had frequencies in those regions where DIALLOG lacked licenses. After this deal is complete, DIALLOG will become the only CDMA-450 operator that has a nationwide presence. Also in 2007 PTA is planning to auction 450 MHz frequencies in two new regions, the northern territories and Kashmir (Pakistan part) and DIALLOG will bid as well.
According to DIALLOG's estimates the company will need not less than USD 60 million to reach this goal.
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