Telenor: Making a Difference in Pakistan

Norway-based Telenor group is one of the leading mobile operators in the world and has mobile operations in 12 countries across Europe and Asia. Telenor came to Pakistan in 2005, when telecom was booming in the country. The company quickly grew into the second-largest mobile operator in Pakistan. To secure its leading position, Telenor Pakistan is modernizing its network to introduce 3G services and prepare for the 4G era. This project is being undertaken with ZTE and is the first of its kind in Pakistan. It is the most comprehensive network swapover in all of the Telenor Group. Lars Christian, Telenor Pakistan CEO, and Gyorgy Koller, Telenor Pakistan CTO shared with us how Telenor Pakistan has climbed from No. 5 to No. 2 in Pakistan and the challenges of operating in this fast-growing country.

Q: Telenor is the largest foreign investor in Pakistan. What are the differences between Norway and Pakistan in terms of culture and markets?

Lars Christian: There are between Pakistan and Norway many differences. First of all, the population in Pakistan is about 40 times greater than that in Norway. The Norwegian market is probably one of the most advanced in terms of both mobile technology and customer services. How we distribute our services is very different. In Pakistan, every distribution is done through a physical shop—we have 200,000 outlets. In Norway, most distribution is done electronically over the internet.

Second, running a network in Norway has its challenges, but most of the time there is power. In Pakistan, we have no power 15 or 16 hours a day. This is, of course, is a very different challenge from a power-management perspective.

Also, Pakistan benefits from us learning from more modern markets, like Europe. Europe is five to seven years ahead of Pakistan when it comes to services offered. We can learn from Europe, or even Thailand or Malaysia, and implement things much faster in Pakistan. We can apply experiences in those markets to Pakistan without having to reinvent the wheel every time.

Q: What best practice have you applied in Pakistan?

Lars Christian: First of all, when Telenor goes into a new country, we don’t only seek to maximize profit for our teleco. We want to make a difference to the country. We want to contribute to the development of the country. Telenor came in as No. 5, and instead of putting our main efforts into the cities, we went into the rural areas, where few of us were. So, in a way, we helped development of the rural areas.

Second, we have also launched financial services. Very few people in Pakistan have access to bank services, and we want to extend access to these services. We have contributed to Pakistan’s society with branchless banking. Our company culture has attracted the best talents in Pakistan so that we stand out from the competition. Now we are No.2 and quickly catching up with the No. 1 in the industry. 

Q: As the fifth entrant into an already competitive market, how did you become the number two operator in Pakistan?

Gyorgy Koller: Definitely by echoing the market but also branching out into other areas. We also have a very strong distribution model. 

I would say our success can also be attributed to the people we have working for the company. We are considered the best employer in the country in the telecommunication industry and second best across all industries. So people love to work for Telenor Pakistan. 

We roll out the network, which grows to a sixth billion dollar market. Telenor has much experience of fast, efficient network rollouts in Pakistan.

So it’s a combination of many factors that has allowed us to rapidly gain a large market share in Pakistan. 

Lars Christian: Also, going forward, Telenor has launched a program called “Internet for All.” We want the whole of Pakistan to start using the internet, and we know that, internationally, if we increase internet penetration by 10%, GDP increases 1%. We have partnered with ZTE for the network swapover, which is almost completed. We are in a very good position to lead internet development in Pakistan. We will continue cooperating with ZTE, and I think together we will win.    

Q: What are the biggest benefits that Telenor brings to Pakistan?

Lars Christian: We increased competition in the marketplace, so prices halved. We also increased the footprint of mobile telephony in the market. Before we came, telecommunications was only in big cities, and now it’s all over the country. We are a major contributor to that. We also brought financial services to the underprivileged. We have launched branchless banking, and we have been an important driver of Internet for All. It’s still early days for the internet in Pakistan, but we will play an important role in bringing it to the masses.

Q: Telenor Pakistan announced its national network upgrade and extension project in 2012.  What is the background of this project?

Gyorgy Koller: We have three drivers of this modernization. We wanted to have a future-proof network that was not only 2G but also 3G and 4G.

The second driver was lower power consumption. Power is a key challenge in Pakistan. Having mechanisms that consume much less power was important. 

The third driver was the network elements on our network. Many network elements had reached end of their life, so we wanted to have a new network.

With this network modernization, we will evolve to future architecture. Telenor Pakistan’s network will be the only all-IP network in Pakistan. Each of the network elements, from base station to switches and core network, will be IP-based. 3G is going to happen in Pakistan, and they are going to be very aggressive before Internet for All. Then, our network will give full support. These are the reasons we decided to modernize our network.

Q: What will be the biggest challenges in this largest undertaking ever by Telenor?

Gyorgy Koller: The biggest challenge is that we need to swap a live network. In Pakistan, the network is serving 32 million subscribers. We need to compete each day against the other operators. You cannot allow service to slip while you are swapping over the network. That has been a huge challenge.

In addition, Pakistan has very challenging environment because of unreliable power, security, and accessibility in rural areas. It’s difficult to go to sites at night because they are far away, and there are many areas that you should not go after sunset.

Despite these challenges, they say that they will finish the project as we planned at the beginning. This is a very unique situation, not only within Telenor Group but also for other big operators. We signed the contract with ZTE, and ZTE has proceeded according to the agreed timeline. Swapping over everything in the network is a massive job, but we have managed to keep the timeline. That has been a very important achievement.

Q: What do you think of ZTE’s project team?

Gyorgy Koller: ZTE is doing a great job. Of course, ZTE went through a learning curve. In the beginning, ZTE struggled a little bit to get contractors and subcontractors. However, they managed to iron out their issues and even increased the number of sites they were swapping over in a month. During July, they swapped over 974 sites in a month, which is very fast. Of course, ZTE still has challenges with subcontractors and with the quality, but despite these challenges, we are very proud to see that we are finishing this swap as planned.  

Lars Christian: I think one of the reasons for our big success was that we didn’t have separate ZTE and Telenor project teams. We only had a joint team, and that’s one of the main reasons we were so successful. 

Gyorgy Koller: They had the same goals and worked together. That was key to the success.

Q: What are your thoughts on the future trends in the Pakistan telecom market?

Lars Christian: In the wireless market, Telenor Pakistan has a great future because there is very little existing infrastructure for communications. You know fixed in Norway seems to go straight to wireless technology. Most Pakistanis will have their first internet experience on a wireless technology. I see no reason why Telenor Pakistan should not catch up with the rest of the world. They are having issues with 3G, but when the ball starts rolling, I think it’s going to roll fast. I believe Pakistan will catch up with the rest of the world. They have a huge base of very talented software developers and a strong IT environment. When you combine this with wireless technology and all the new features that they devise, I think that Pakistan can benefit a lot.

China is a good example of how it is possible. 25 years ago, people didn’t talk about Chinese companies such as ZTE and Huawei seriously. But think that projects like ours are proof that it’s possible to catch up if we really do a good job.  

Q: What are your expectations for Telenor’s development in Pakistan? 

Lars Christian: We will own the ADSL in Pakistan. We are about to build a new headquarters in Pakistan. For the next three years, we want to be the biggest retail bank and the biggest internet provider in Pakistan. We want to have more than 30% market share and have more valuable customers in our network. In the long run, we will expand into more vertical categories than purely telecom. We will go first into areas that benefit Pakistan, not only ourselves.