The Ugly truth about the connectivity boom?
Posted on September 21st, 2006 in Broadband, Business Tech |
Everyone’s whose anyone in the top layer - networking/connectivity provider market, ie Wateen, Mobilink, Multinet,etc nowadays is trying to get into the business that is so far covered only by PTCL :Offering their own infrastructure (like Wateen’s Moto4 wimax network in progress) to transport the country’s voice,video and data to and fro.
An interesting article details the nasty end of this boom, ie high debt, and too much competition for a decent ROI on these investments which means out of the 4 or so players probably 2 will fail. I have my money on Mobilink succeeding though..since its an open secret that they have ooooodles of cash ready to throw at large projects such as these and have enough time to sit back and wait for the ROI to come in…just like what they did with their cellular network service, which is one of Orascom’s largest and most profitable.
Read the article here:
http://www.pakistanlink.com/Headlines/Sep06/19/11.htm
And thanks again to Osama for forwarding it to me!
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2 Responses
This article was beaten to death in many circles. For a reporter not having any “a priori” and even intimate knowledge of how these companies are working, the article is a typical spin-doctoring tale.
Companies don’t foolishly spend billions in infrastructure and then only to vanish or loose money. Can you think of a single provider who has “vanished” in the past 10 years, by providers, I do not mean ISPs.
The business is booming, profitability is there. Only staunch business tactics will make a player remain, otherwise no one will invest. Case in point, if they are functioning, it means they are making money.
spin doctoring or not…, i think its a race, the losers will get consolidated into the winners… no one has vanished but some are barely chugging along..insta for example….and paktel is trying a comeback right now…
and no one who has jumped in recently is making money…not the channels, not the WLL guys, not the new cellular providers..not yet anyway . they are here because they see potential…tho i agree that the investments arent foolish, and have sound risk management ground work done behind them, everyone should atleast break even unless they screw up majorly or get badly affected by world events (like telenor) but thats not the goal then is it..the goal is to mint money..and everyone will not be able to do that….