Telephones for tomorrow: AKFED and Alcatel in Pakistan

What can a more efficient and more advanced telephone system do for Pakistan's future? In a country where 110 million people were served by only 700,000 telephone lines, (according to 1989 statistics) how can modern information technology bridge the gaps in communication, understanding, knowledge, resources and opportunities between people? The answers to these and many more questions led the Aga Khan Fund for Economic Development (AKFED) to enter into a joint venture with the Alcatel Group, the world's leading telecommunications systems manufacturer, and with the Pakistan Telecommunications Corporation (PTC), to manufacture digital switching systems in Pakistan.

Alcatel Pakistan Limited, the entity created through AKFED's partnership with Alcatel CIT and PTC, had already started the manufacturing of certain systems in temporary industrial premises even as Pakistan's Prime Minister Nawaz Sharif was laying the foundation stone for the factory under construction in Islamabad on October 14, 1992. In a speech on that occasion, the Prime Minister stated that the secret of economic growth lay in the deregulation, liberalization and privatization of telecommunications services and commented on opportunities opening up in Central Asia in which investors from Pakistan might benefit. For Pakistan, the venture could not have come any sooner. Even with connecting one new telephone line every minute in Pakistan, the Far Eastern Economic Review estimated that there were over 800,000 people wait-listed for telephone connections in January 1993.

Telephone systems, for most of their history, have carried the human voice as an analog signal, that is through a continuous electromagnetic wave (much like a radio wave) which is converted into a sound wave when it reaches the receiving end of a telephone line.

Today, telephones are able to transmit the human voice using digital signals, which are discrete electromagnetic pulses (as opposed to waves). Besides being transmittable by cheaper equipment and being less prone to distortion, a digital signal is also the format in which computers generate information. Computer data is transmittable more readily through a digital system and increasingly, communication of information through radio and television is moving to digital transmission.

Therefore, digital switching systems will not only enable more people to communicate with each other more cheaply, more clearly and more easily, but will also link widely spread rural populations with each other and with urban centres. Telephone connections can thus significantly increase opportunities for social and economic development. A communications infrastructure will lay the foundation for increased investment in the provision of social services and the creation of wider markets for goods.

AKFED's approach is to look for projects with long-term development potential and to emphasize equity investment, international partnerships and management support. Its industrial operating arm is Industrial Promotion Services (IPS).

Long-term development of the Alcatel Pakistan Limited project includes more than just expanding the country's communications infrastructure. It also means advances technology and engineering, highly-skilled employment opportunities and enhancement of the domestic computer software industry through the establishment of a software development centre. AKFED's equity participation in this project and the local support provided through IPS (Pakistan) Ltd. are strengthened by the partnership with Alcatel CIT and PTC. The Alcatel Group, a pioneer in digital switching technology active in Pakistan since 1983, has been awarded a contract by PTC for the turnkey installation of a telecommunications network covering Karachi, Quetta and Hyderabad. The Group's parent company, Alcatel Alsthom, which had consolidated sales of approximately US$30.8 billion, spent about US$2.8 billion on research and development and had 213,100 employees worldwide in 1991.

As Mawlana Hazar Imam said during the Silver Jubilee when describing the Imamat's economic development institutions, "private enterprise can assist by providing a constructive partnership in which foreign and local expertise and resources work together, drawing on the best available from both sides... The Imamat's Third World investments are concerned substantially more with economic development than simple profit making." It is this concern whether through the provision of financial services, the promotion of tourism or investment in industry, that motivates ventures like AKFED with the Alcatel Group and PTC in Pakistan.

(Source: Ismaili Canada Oct 92)

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