Literature Review - Diversification Strategy for Electronic Media in Pakistan

7/27/2019 Literature Review - Diversification Strategy for Electronic Media in Pakistan

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Case Study - Potential Diversification

Strategy for Electronic Media Companies:

Provision of Converged Services

(Information, Communication, Multimedia& other ITeS Services) in Pakistan

Phase-IAbasyn University-Islamabad Campus

February, 2013

Submitted to Ms. Iffat Chaudhry

by:

Fawad Ahmad Khan Niazi

MS (Management Sciences)

Email: [email protected]


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Synopsis of Electronic Media & Telecom Sectors and Potential

Strategies of Electronic Media Companies (EMCs):

The focus of the study is potential diversification strategy of Electronic Media

Companies (EMCs) providing the multimedia services using different mode of

delivery in Pakistan. The content, networks and devices are three building blocksof future business propositions to tap customers for innovative services in future.

The companies are striving to position themselves in a way that best suit their

business strategies. In the existing scenario, the business model of these EMCs

is dependent on market intermediaries Retailers/Distributors (DVDs/CDs,

Cable), Internet (satellite & Internet Service Provider-ISPs/telecom operators),

Content Aggregators (e.g. Mobile TV/IPTV Platforms) other pay-TV etc.

The EMCs are further facing the risk of dependency, especially on telecomoperators in near future and long run. The telecom operators are not only

diversifying in the other sectors of health and financial services sector but also

serving as content aggregator by simply providing the platforms to upload the usergenerated content and getting the existing original professional content

transformed into the form suitable for delivery to mobile, TV and PC/Tablets of

their huge customer-base. e.g. Orange, part of the France Telecom Group, supports

several MVNOs in France, its home market, including i) Virgin Mobile, which

recently incorporated two quad-play offerings and is regarded as one of the most

thriving full MVNOs globally. Its subscriptions totaled more than 2 million at the end

of 2011; ii) The M6 MVNO of Metropole Television, the third most-watched TV

network in the country iii) NRJ Mobile, a 90/10 joint venture between bankingcorporation Credit Mutuel-CIC and multimedia group NRJ. Like Virgin Mobile, NRJ

targets the youth segment. It had 900,000 subscribers at the end of 2011.

Although the adoption rate of converged services is low in Pakistan but there is

huge potential of uptake. It is generally understood thatbenefits can be extracted

by Electronic Media Companies (EMCs), if they diversify their business

portfolio through vertical or horizontal integrations as well as synergic alliances.


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In Pakistan Electronic Media companies have already following the strategy to

provide diversified services e.g. breaking news services to mobile users that

may also serve the purpose of emergency alert but in the ever increasing instances

of blocking of mobile and landline phones, there should be options available to

people to at least have access to useful information. EMCs may be better poised to

provide innovative services to people of Pakistan using its internalcapabilities and development of customized end user terminal devices. For

example, EMCs may also be able to provide the breaking news/emergency alerts

through broadcasting over mobile phone using FM Radio Mode or Broadcastingto customized mobile phones with the simple TV reception capabilities.This will

not only provide better coverage but also better market power and value of

firm.

The policy and regulatory environment in Pakistan related to electronic

media/broadcasting services has certain limitations for the organizations

having foreign equity; whereas, the telecom sector in Pakistan allow 100%

foreign equity and being governed under light touch regulations for IT & Telecom(ICT) services (Ref. WTO-GATS Commitments and PEMRA Ordinance, 2002). Only

PTCL has the IPTV license from PEMRA due to its unique position as its majority

shares are still with Government and public at large.

The available telecom sector infrastructure (http://www.pta.gov.pk/digitalmaps/

digitalmaps.php) can also be leveraged by CMEs through external

networks/alliances or diversified telecom business unit. The detail about media

sector licenses is atAnnex-I; whereas, related telecom sector statistics are as under:

Fixed lines (Net Landline based IPTV Market) ~6-7 Million

Mobile lines (Mobile TV Market) ~120+ Million

Total Broadband Subscribers (Existing Landline IPTV Market) 2.01+ Million

Source:http://www.pta.gov.pk

The growing demand of content and its regulations over internet and mass

media are also challenges for the TOs as they are less familiar to such type of

situations in contrast to EMCs and in some cases compliance to content

regulations resulted in total blocking of key portal services e.g. YouTube and

facebook on whom Telecom operators (TOs) rely for professional as well as user

generated content. The power of mobile as end-user device/terminal; and necessity

to have access to mobile device for tapping youth and busy customers requiring

mobility in future is acknowledged worldwide.Therefore, EMCs should strive to

provide converged services to mobile users in Pakistan through

diversification strategies like that of telecom operators to sustain in long run.
http://www.pta.gov.pk/digitalmaps/%20digitalmaps.phphttp://www.pta.gov.pk/digitalmaps/%20digitalmaps.phphttp://www.pta.gov.pk/digitalmaps/%20digitalmaps.phphttp://www.pta.gov.pk/digitalmaps/%20digitalmaps.phphttp://www.pta.gov.pk/http://www.pta.gov.pk/http://www.pta.gov.pk/http://www.pta.gov.pk/http://www.pta.gov.pk/digitalmaps/%20digitalmaps.phphttp://www.pta.gov.pk/digitalmaps/%20digitalmaps.php


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Reference, the future outlook of industries depicted by Economic Intelligence

Unit after a recent survey, the telecom sector has not gone into negative zone,

rather the media/entertainment sector has already gone into negative zone.

Therefore, it is imperative for the EMCs to adopt an innovative strategy to enter the

domain of convergence instead of waiting for the convergence where they will be

weak-link in the market and would be forced to accept the business terms ofpowerful telecom operators.


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The multichannel approach of EMCs and web-portal for customer interactions

may provide a converged platform for multimedia content

publishers/producers to meet consumers where they are and generate the

revenue that stakeholders need to remain successful in todays world of wide-ranging media distribution. EMCs may serve as content aggregator with focus

on specific needs of the people of Pakistan and for the purpose; Governmentsupport may also be available from entities like National ICT R&D Fund Company

(www.ictrdf.org.pk).

In a recent survey conducted in Islamabad/Rawalpindi, under the supervision

of Dr. Zaheer Akhtar, regarding the perception and preferences of users (in

20-35 years age bracket) about the IPTV services certain aspects including key

factors affecting decision to buy the IPTV service, preferred choice of

brand/operator and end user devices; following trends are noticed:

The above results show that innovative services like IPTV and market is still in

intermediary stages of transition to convergence & moving from computers and

TVs to mobile devices; however, people are yet to fully adopt mobile for mobilityand still prefer to have IPTV services using TV device. Moreover, IPTV users would

like to buy services from new service provider, if given choice. Moreover, it is also

transpired that currently majority of customers are using broadband services from

PTCL; however, there are around 2 million broadband customers and PTCL has only

capacity of 4-5 million users and it is expected that future of broadband and

broadband based services will be dependent on wireless technologies.

Therefore, EMCs should diversify at this intermediary stage to provide the

related converged products & services to the people of Pakistan while

preparing them to face the challenges being imposed by the diversified

companies in all mobile stage.

0% 20% 40% 60% 80%

Yes

No

TV

Mobile

ComputerNo Response

Likeness to buy/continue to use IPTV service

from existing B.B. Service Provider &

Prefered Display Device

0% 20% 40% 60% 80%

PTCL

Wateen

Nayatel

Witribe

Qubee

Others

Broadband Service Provider
http://www.ictrdf.org.pk/http://www.ictrdf.org.pk/http://www.ictrdf.org.pk/http://www.ictrdf.org.pk/


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In view of above and enabling provisions in the IT & Telecom and financial services

sector policies (Annex-II) under which interested EMCs can provide enabling

platforms and voice, data, Multimedia & ICT enabled services (ITeS) through

following complementary strategies in phased manner:

Step-I: Provision of enabling platform of Professional and User-Generated Content Aggregation in the capacity of Content Aggregator; Step-II: Provision of enabling platform for telecom network agnostic

ICT enabled services such as E-Health, E-Education, IPTV,

branchless/mobile banking services in the capacity of Third Party

Service Providers (TPSP);

Step-III: Depending upon level of aggressiveness and confidence ininternal capabilities of the EMC; following two strategies may be

adopted:

o Provision of voice, video and data services on mobile devices(mobiles/tablets) through SIMs with their own brand in thecapacity of Mobile Virtual Network Operator (MVNO); OR

o Provision of converged services in the capacity of MobileNetwork Operator (MNO) by acquiring the license andspectrum in upcoming auction of 3G spectrum and

Infrastructure Sharing & Roaming Agreements with existingoperators

Hypothesis:

Considering the analysis given above and enabling provisions of IT & Telecom

Sector De-Regulation Policies, available infrastructure and strong viewership of

EMCs in Pakistan;

If Converged Services (Information, Communication, Multimedia and other IT

enabled services) be provided through diversification of Electronic Media

Companies (EMCs) instead of telecom operator, then it will ensure EMCs

sustainability and competitive edge in era of convergence of media and

services.

The preference of potential customers in terms of content, end user device and

choice of service provider/brand have been studied in separate survey; however,

this study will focus on literature review in instant phase and in next phase,

the perception of the industry experts and corporate level management would

be gauged about the proposed strategy of EMCs identified above as well as

readiness/enthusiasm of the EMCs to adopt them. The optimistic approach of

industry experts and EMCs corporate managers will be taken as strong positive link

between media sector diversification towards the ICT/ICT enabled services and

long terms sustainability and competitive edge and vice versa. The views of focused


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group of experts/corporate level management will be gathered through

interviews/questionnaires.

Literature Review:

There are two aspects of diversification (i) Internal-what are the chances of making

it success through ability of the diversifying firm to organize and make good use ofpotential opportunity in the market; and (ii) external-how well will a particular

move, if it be successful, meet the companys objective (Igore Ansoff). The optimism

of experts and decision makers keeping in view the both of these aspects of

proposed EMCs diversification strategy would be the critical diversification strategy

adoption factor in Pakistan.

The EMCs should take initiatives to broaden the companies technological base as

well as horizontal move to improve the coverage of the market. Companies usually

strive to attain the best performer position by starting new industry or transforming

the old ones into mutated firms to create/meet consumer preferences. Media sector

have the option of vertical and horizontal integration so do the telecom operators. Itis the matter of time when business environment and user preferences will be

changed for service providers due to concentration, convergence of services and

delivery mechanism (Infrastructure).

There is a convergence trend in telecommunication and media sectors as well and

there is a link of it with concentration being experienced in almost all sectors for

sustainability. The understanding of convergence and integration is critical to move

further in adoption of any diversification strategy in media and Information &

Communication Technology (ICT)/Telecom sector.

According to industry and European ICT market regulatory expert-Mr. MiguelMendis (DG Competition Media Unit in his presentation given on Media, Information

and Telecommunication at Oslo in 2003); there are two basic type of

convergence/integrations (i) Technical Convergence i.e. possibilities offered by the

digital technology e.g. capabilities of ICT Infrastructure required to deliver the

content including the processing power of end user terminal/devices. This has

resulted in the de-materializing the media products by transforming them into

digital form to remain in the main-stream business. Now the traditionally separate

media has been converged as Multimedia i.e. putting together of the text, sound,

video and voice. This convergence can be witnessed in Pakistan where news papers

are available over internet (web-casting) as well as same content is available on

their news TV channels (diversification as Electronic Media Company from

Newspaper Group) as well as through the subscription on mobile (Breaking News

Alert, Ring tones/MP3 music file downloads). Definitely much more is to explore

and leveraged by the media companies in near future and long run.

The price paid for the rights of live matches and other media products are

increasing and availability of international content in local language is also

worsening the situation and making it more important to diversify in the context of


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second type of convergence i.e. (ii) economic convergence. Growing competition

induced by the proliferation of TV channels and inflated cost of production

worldwide as well as in Pakistan; only the broad based innovative firms seems to be

able to afford the such abnormal costs. In the face of the economic barriers of such

dimensions, media companies have shown trends of concentration in foreign

markets and may have to be done by the Pakistani media companies to gainefficiencies and competitive edge through economy of scale and scope. This is being

reflected in international markets in the form of Entertainment &

Telecommunications; Entertainment & Information; Information &

Telecommunications etc. This trend is being witnessed due to potential of reducing

average cost by producing the wide range of products through vertical integration of

different levels of production and distribution of media products.

The vertical integration strategy of media and telecom sector leads to

creation/transformation of companies which are able to produce content-films,

drama, music; register them in CDs/DVDs and distribute them not only through

physical outlets/distributors but also through cable, satellite or internet (wire lineor wireless/mobile internet) they own; and better positioned to exploit their

products at every single level of value chain.

The market structure is perfect for the content aggregators to play a role in

packaging the content, depicted below, while resolving the content licensing/IPR

issues (Ernest & Young.Generating Money in a mobile TV world(2006).

EMCs may diversify to become content aggregator-cum-broadcaster and strategy of

acquisition is more common than through internal development (Levitt, 1975);

however, it is also observed that acquisitive growth strategy may affects the

Managements time and risk orientations and may reduce the Managerscommitment to innovation (Michael A. Hill & Robert Hoskisson, 1990). Therefore,


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media companies should diversify their business through vertical integration to

promote innovation and gain social capital to grow in the digital convergence era as

the absolute size of acquired knowledge base has short term positive effects and in

later stage, there might be negative effects on the innovative performance of the

acquiring company. The companies should target the mergers and acquisitions

partners that are neither too un-related nor too similar in terms of theirknowledge base (Myrian Cloodt, John Hagedoorn & Hans Van.Mergers and

Acquisitions: The effect on the innovative performance of companies in the high

tech industries, Research Policy 35, 2006:642-654).

The role of manufacturers is also very important for the customization of end user

terminals/devices in terms of feature and capabilities required by the telecom and

media companies; however, without the strong content (including the user

generated content), consumer will not pay for any mobile video services and service

provider would end up as white elephant. Therefore, companies need to offer the

more compelling products and services than the competitors to succeed. Mutually

beneficial partnerships between the content and delivery groups, enabling themto succeed and sustain in long run are essential. It is pertinent to mention that such

a partnership would likely to happen between some strong-link and weak-link in

the complementary sector wherein EMCs would have to be a strong link either in

content or delivery domain with ability to enforce intellectual property rights.

Intellectual Property Rights (IPR)/Content usage rights do not specifically include

the re-transmission of digital products over the internet/mobile networks; media

companies and broadcasters will need to review carefully all content before it

broadcast, including the accompanying music. Content owner will want to audit the

process to verify that their IPRs are not being mis-appropriated. Moreover, the core

to success of video services over mobile handset/devices whether by operatorsalone or strategic partnership will be original, bite sized content and would bedifferent from the content distributed to consumer on TV in their living rooms.

Content should be specifically generated and all content creators are operating n

slim margins. The content made for TV would have to be re-purposed to save cost

and there is need of creation of platforms and device specific content. Moreover, the

user generated content (blogs, video blogs, social network & video sharing) will be

as significant as the professional content. Consumers are displaying increasing trend

of viewing user-generated content and EMCs are also trying to encourage the people

to upload/share videos on their web-portals. It is anticipated that the 3G enabled

video services by telecom operators would get benefit by promoting web-portals

with user generated content to outperform the professional content providers.The popularity of such portals e.g. YouTube (Broadcast Yourself) and its strong

technical base and natural disposition with telecom operators pose serious

challenges to media and entertainment business entities to generate income from

user generated content as well, which is likely to be captured by the mobile

operators or MVNOs (increasingly popular). The viewers will be driven by the

brands they know and trust.


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Hence content owners and general user would prefer to upload/share on platforms

of professional content aggregators who can provide space and transform thecontent into digital form for further deliver the same to interested consumer on

demand through multiple routes with option of revenue sharing. In current

scenario, the traditional broadcasting channels would not be able to provide the on-

demand services or other content management/controlling facilities that telecomoperators are and would be able to provide using broadband/internet as delivery

channel and state-of-the-art television and mobile devices. EMCs should be able to

tap the opportunity of leveraging the potential of original content-professional aswell as user generated and be able to deliver it to the consumer seamlessly on

demand through digital technology, preferably owned/managed by them with fair

revenue sharing facility.

Managing critical dependencies, vertical integration may be the approach due to the

foreseeable future dependencies (Gorden A. Walter, Jay B. Barney, Management

Objectives in Mergers and Acquisitions. Strategic Management Journal, Vol-II,

Issue-I (Jan 1990), 79-86.

The media firms, like other dominant vertical firms that happened to evolve into

related diversified firms over the time, can start to evolve from simple narrow

industry base to a stage of becoming larger by gradually expending into firms,

diversified into related industrial sectors (Levitt, 1975). Through this strategy, there

are possibilities of greater market brand power and performance by pursuing the

related diversification strategy (Bettis, 1981), (Backaitis, Balakrishnan & Harrigan,

1984), (Palepu, 1985).

It is also observed that diversification has significant positive effect on the value of

the firm (Jose, Nichols & Stevens, 1986). However, it is important that diversificationstrategy should be implemented with greater involvement of the management in

corporate level planning and control arrangements (Hill and Horkisson, 1987) as

the performances of diversified firms depends on the fact that how diversity is

managed.

Regarding management of diversification; the instant study proposed MVNO model

which is an established model whereby media sector may diversify to provide new

innovative bundled services in the capacity of content producer-cum-aggregator

with minimum involvement in the network deployment/management. In the same

way, a little variant of the MVNO i.e. VLO (Virtual Landline Operator) services may

also be started by the media companies to capture the market segment connectedthrough the wire-line operators.

In view of above, it is reiterated that EMCs must consider the latest trends and

adopt an innovative strategy to enter the domain of convergence instead of

waiting for the convergence where they will be weak-link in the market and

would be forced to accept the business terms of powerful telecom operators.


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REFERENCE CASE STUDY WHAT IF MEDIA COMPANIES DO NOT RESPOND TO

THE NEED OF DIVERSIFICATION PROACTIVELY: MOBILE IS MAKING IN-ROADS

m-commerce limited opportunity for

mobile but good for interactive TV

screen


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Annex-I

Related IT & Telecom Sector Policy Reforms

Policy Maker-Ministry of Information Technology

Regulator-Pakistan Telecommunication Authority (PTA)

Introduction of 3G is expected to provide more robust ICT infrastructure forprovision of converged services;

Spectrum auctions of available frequency lots in 3G spectrum, 1.9 GHz and3.5 GHz bands is expected soon and watch-hold on new licensing is also

expiring in March, 2013; therefore, CMEs can participate in the auctions to

acquire the license depending upon the strategy;

Policy for security and improvement of national telecom andinformation services through inter-operator network redundancies that

will ensure the compliance to service level agreements among the

stakeholders especially in case of critical services;

Policy on Mobile Banking including mobile money transfer and remittances

Policy on content over Internet whereby web management regime hasbeen introduced in line with Federal Cabinet decisions. International Commitments

http://www.wto.org/english/tratop_e/serv_e/serv_commitments_e.htm

Related Broadcasting Sector Policy Reforms

Policy Maker-Ministry of Information & Broadcasting

Regulator-Pakistan Electronic Media Regulatory Authority (PEMRA)

Under Section-23 of PEMRA Ordinance 2002/ PEMRA (Amendment) Act2007 no person shall be entitled to be benefitted from any monopoly or

exclusivity in the matter of broadcasting or the establishment and operationof broadcast media. The Authority has approved following restrictions on the

acquisition of broadcast media and distribution services:

(i) No distribution licensee including Direct-to-Home (DTH), Cable TV(CTV) Networks, IPTV, Multi-Channel Multi-Point Distribution Service

(MMDS) etc. will be allowed to own, control or operate any type of broadcast

media or/ and Landing Rights Permissions.
http://www.wto.org/english/tratop_e/serv_e/serv_commitments_e.htmhttp://www.wto.org/english/tratop_e/serv_e/serv_commitments_e.htmhttp://www.wto.org/english/tratop_e/serv_e/serv_commitments_e.htm


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(ii) No media broadcast licensee including Satellite TV, FM Radio Licenseeor Landing Rights Permission Holders will be allowed to own, control or

operate distribution services such as Direct-to-Home (DTH), Cable TV (CTV)

Networks, Multi-Channel Multi-Point Distribution Service (MMDS), IPTV etc.

(iii) However, Cross media ownership is allowed since 2007.Related Branchless Banking Regulations

Policy Maker-Ministry of Finance

Regulator-State Bank of Pakistan

Branchless Banking Regulationshttp://www.sbp.org.pk/bprd/2011/C9-Enclosure-

2.pdf

ANNEX-II

EXTRACTS FROM PEMRA YEAR BOOK

Satellite Television Channels: Satellite television is the provision of broadcast

services through satellite. It provides a wide range of channels and services, often to

areas that are out of reach of terrestrial transmission. Two kinds of frequency bandsnamely C band and Ku band are used for satellite TV. Pakistan, in recent years has

become a hub of media growth; where not only local TV channels have emerged but

the foreign TV remaining 16 are non-operational. Five public sector channels are

also on-air. All these channels are available in the form of a bouquet to the

subscribers. Meanwhile eleven registered companies hold the landing rights

permission for marketing and distributing 26 Satellite TV Channels across Pakistan.

The table below shows total number of private Satellite TV channels holding

licenses from PEMRA. Channels have also witnessed a rapid growth in their

viewership. The foreign channels intending to relay their transmissions in Pakistan

have to obtain landing rights permission against a prescribed fee ranging from Rs.

0.3 Million to Rs. 5.0 million depending on the category of the channel. Currently 85private Satellite TV channels have been granted licenses by PEMRA. 69 channels 69

channels out of 85 are operational while remaining 16 are non-operational. Five

public sector channels are also on-air. All these channels are available in the form of

a bouquet to the subscribers. Meanwhile eleven registered companies hold the

landing rights permission for marketing and distributing 26 Satellite TV Channels

across Pakistan. The table below shows total number of private Satellite TV

channels holding:
http://www.sbp.org.pk/bprd/2011/C9-Enclosure-2.pdfhttp://www.sbp.org.pk/bprd/2011/C9-Enclosure-2.pdfhttp://www.sbp.org.pk/bprd/2011/C9-Enclosure-2.pdfhttp://www.sbp.org.pk/bprd/2011/C9-Enclosure-2.pdfhttp://www.sbp.org.pk/bprd/2011/C9-Enclosure-2.pdfhttp://www.sbp.org.pk/bprd/2011/C9-Enclosure-2.pdf


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Uplinking: Uplinking means the transmission of a signal from a ground station on

Earth to a satellite. Short-term and long-term uplinking permission has also been

granted to different companies in Pakistan. Currently three news agencies namely;

M/s Asian Television Press Network Pvt Ltd, M/s Eastern News Pvt Ltd, and Classic

Entertainment Pvt Ltd, hold long-term uplinking permission for one year while

following four companies have been granted short-term permission, M/s FaizanProduction Pvt. Ltd.(Madni Channel), M/s GAAZA Broadcasting System Pvt.

Ltd.(GKABOOM), M/s Indus TV Networking Pvt. Ltd. (Indus News) and M/s Birds

Pvt. Ltd. (Geo Super)

Cable TV: Over the past decade Pakistan has been flooded with new cable and

satellite television channels. The cable TV trend in Pakistan dates back to 1990

when, a house owning a satellite dish started sharing broadcasting signals to its

neighbours. Pakistan Electronic Media Regulatory Authority (PEMRA) took over the

role of regulator, in 2002, from Pakistan Telecommunication Authority (PTA).

FM Radio Broadcasting: Frequency Modulation (FM) Radio broadcasting uses a

specific range in between 88 to 108 MHz band and has the capacity to provide high

quality Audio programmes within a specific radius of around 40 to 50Kms. Any

company having interest in broadcasting FM Radio transmissions has to contest a

bidding process besides completing other formalities. The licensee is bound to air

public service programmes free of cost which may be provided by the Authority in

the interest of the masses. Any company holding FM Radio license has to ensure an

interruption free broadcasting to its listeners. PEMRA has granted 138 FM Radio

licenses out of which 114 licenses are commercial while 24 are non-commercial.

Amongst the 114 commercial licenses 94 are operational while 20 are still non-operational. Whereas out of 24 non-commercial licenses, 21 are operational.

Internet Protocol TV (IPTV) Channel Distribution Services: Internet Protocol

Television (IPTV) is a relatively new method of delivering and viewing television

programming using an IP network and high speed broadband access technology. It

is a combination of three mediums called triple play service involving TV, internet,


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and telephone. M/s Pakistan Telecommunications Company Limited is the only

company currently holding IPTV license which is operational in Pakistan.

Mobile TV: It is latest technology to provide TV services on mobile and hand-held

devices. Presently three Mobile TV licenses have been issued to M/s Brands

Promotion Centre Pvt. Ltd., M/s Cellevision Pvt. Ltd., and M/s Dialogue Pvt. Ltd. Thismedium is expected to get a steep boost in Pakistan. Telenor and Mobilink are the

two cellular companies currently providing this service to their customers in

Pakistan.

Multi-Channel Multi-Point Distribution Service (MMDS): MMDS is also known as

Wireless Cable. It is a wireless telecommunications technology, used for general-

purpose broadband networking or, more commonly, as an alternative method of

cable television programming reception. Pakistan started this service in 1996

initially with 10 TV channels which was later, upgraded to more than 80 channels.

TV transmissions through MMDS are being watched in Karachi, Lahore, Islamabad,

Sahiwal and Okara. Three companies namely; M/s Ranja Enterprises Pvt. Ltd,Lahore for Sahiwal & Renala Khurd, M/s Southern Networks Limited, Islamabad for

Lahore, Karachi & Islamabad and M/s Pak Communications (Pvt) Ltd, Islamabad for

Nankana-Sahib hold MMDS licenses in Pakistan. Due to rise in subscribers the

estimated number of MMDS subscribers has reached to 330,500.

Direct-To-Home (DTH): Direct-to-Home satellite television service is the method

of direct reception of TV channels. Through this service, subscribers or end users,

receive signals directly from geostationary satellites. Signals are broadcast in digital

format at microwave frequencies. DTH service enables customers to receive TV

programmes directly from the satellite through powerful Ku band transponder.Licensing Regime for the award of DTH licenses including eligibility criteria, terms &

conditions, bidding procedure etc. is in process and will be finalized in near future.

PEMRA POWERS & REGULATIONS:

Broadcast media means, the media which originates and propagates broadcast

signals by terrestrial means or through satellite for radio or television and includes

teleporting, provision of access to broadcast signals by channel providers and such

other forms of broadcast media as PEMRA specifies.

PEMRA also regulates distribution services for broadcast in Pakistan establishedfor the purpose of international, national, provincial, district, and local or special

target audiences. Distribution Service denotes to the receiving of broadcast and pre-

recorded signals from different channels and distributing them to subscribers

through cable, wireless or satellite options including Cable TV, Local Multi-point

Distribution Service (LMDS), Multi-channel Multi-point Distribution Service

(MMDS), Direct to Home (DTH) and such other similar technologies.


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To promote a healthy competitive environment and discourage monopolies, PEMRA

prescribes terms and conditions for the broadcast media and distribution service

operators. For instance, no one can own more than four TV channels. Unfortunately

cross media ownership is allowed since 2007 in contradiction to international

practices.

Note: It is also clarified from PEMRA expert that there is no bar of having telecom

sector license or MVNO authorization, if you are a media company. Further

clarifications can be sought during feasibility stage.

PEMRA issues licenses for broadcast media and distribution services in the

following categories:-

i. International and National scale stations ii. Provincial scale broadcast

iii. Local Area or Community based Radio and TV Broadcast

iv. Specific and specialized subjects; v. Distribution services

vi. Up-linking facilities including teleporting and Digital Satellite News Gathering(DSNG).

The Authority may revoke or suspend the license on non-payment of renewal fee or

on the violation of any of the provisions of PEMRA Ordinance. The Authority has the

exclusive right to vary any of the terms and conditions of the license or grant

exceptions where it finds it appropriate in the public interest.

Related PEMRA Authority Decisions:

Meetings of the Authority were held between July 2009 to June 2010 in which many

important and constructive decisions were taken some of which are given below.

(a) The Authority in order to negate monopolies in the private electronic media has

decided not to issue more than four (04) STV licenses, four (04) FM Radio licenses

and two (02) Landing Rights Permissions, to a single company.

(b) The Authority after due considerations has also approved the tariff, terms and

conditions for the In-House channels for IPTV services and MMDS licenses.

(c) The Authority has imposed heavy fines on non-compliance with the terms and

conditions regarding maintenance of minimum standards, set by the Authority to air

advertisements by the satellite TV channels to protect viewers rights.

(d) The Authority has also approved to decrease the Landing Rights Permission fee

from Rs. 50 million to Rs. 20 million.

(e) In order to bring PEMRA Rules in line with the amendments introduced in

PEMRA Ordinance, 2002 by the Parliament of Pakistan in April 2007, the Authority,

with the approval of the Federal Government, has formulated PEMRA Rules, 2009.


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(f) In order to make the complaint mechanism more efficient and effective, Council

of Complaints (Organization & Functions) Regulations 2002 have been reviewed. In

this regard a draft of PEMRA (Council of Complaints) Rules, 2010 as approved by

the Authority has been sent to the Federal Government for necessary approval and

promulgation as provided under the Rules of Business, 1973. On notification ofthese Rules, the Council of Complaints (Organization & Functions) Regulations, 2002

shall stand repealed.

(g) The Authority approved the insertion of following clause in the terms and

conditions of the new Cable TV licenses, revalidation, renewal and up-gradation

cases; In the case of metropolitan cities, the license is revalidated inter alia on the

condition that the licensee shall convert its system from analog to the digital

technology to the satisfaction of the Authority by the end of year 2011. Whereas, in

case of other cities, time frame for digitalization of Head-ends/ distribution system

is to be completed by the end of year 2015. In case, the licensee fails to shift from

analog to digital technology as required, the license shall be deemed to have been

withdrawn/ cancelled by following the process ofrevocation of the license.

(h) The Authority has decided that under Section-23 of PEMRA Ordinance 2002/

PEMRA (Amendment) Act 2007 no person shall be entitled to be benefitted from

any monopoly or exclusivity in the matter of broadcasting or the

establishment and operation of broadcast media.

The Authority has approved following restrictions on the acquisition of

broadcast media and distribution services:

(i) No distribution licensee including Direct-to-Home (DTH), CableTV (CTV) Networks, IPTV, Multi-Channel Multi-Point DistributionService (MMDS) etc. will be allowed to own, control or operate

any type of broadcast media or/ and Landing Rights Permissions.

(ii) No media broadcast licensee including Satellite TV, FM Radio

Licensee or Landing Rights Permission Holders will be allowed to own,

control or operate distribution services such as Direct-to-Home (DTH),

Cable TV (CTV) Networks, Multi-Channel Multi-Point Distribution

Service (MMDS), IPTV etc.

(i) The Authority under Delegation of Power (DOP) has granted powers to Regional

Councils of Complaints to levy fine up to one hundred thousand on all broadcast anddistribution service licensees in accordance with the magnitude of their violations.

(j) The Authority has approved the distribution/ provision of different channels of

the same category/ genre in the form of bouquet/ cluster to the subscribers to ease

up channel browsing.


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(k) The Authority has decided not to issue any new Satellite TV licenses,

especially to current affairs category until the market demands so.

Documents

Literature Review - Diversification Strategy for Electronic Media in Pakistan