Profit E-Magazine issue 21

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8 Weekly Roundup 12 Building bridges between patients and doctors 16 The new biryani kid on the block

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20 Jazz going in for the kill 27 Over four years of PML-N, Pakistani exports take a major hit 31 Excelling at business while fighting with a killer disease

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34 Technology Vs Crime Aqeel Shigri 35 A touch of modernity reaps much higher returns

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39 39 18 Secrets From CEOs Whose Companies Won't Stop Growing

CONTENTS

WElCOME

AN ALL OR NOTHING BET hose that the gods want to destroy, they first make promising. And promising is what Warid was when it entered the Pakistani telecom market. The sheer swashbuckling bravado that the UAE-based operator showed was enough to make older operators sweat. In fact, in the initial advertising, it went about saying that all telecom users, not just Warid subscribers, had it to thank. Why? Because the others operators also had to slash their pricing to keep up.

I know hindsight is 20/20, but even back then, I could predict that this race-to-the-bottom will not last long. In an article, I had explained that all cooperation between market players is not collusion; that, regardless of whatever the Competition Commission might say, it was clear that there should be at least some reasonable ground rules on which everyone should agree. These were businesses, at the end of the day. Be creative, be aggressive, be whatever you want, as long as you have an eye on the bottom line. And these rates were downright unsustainable.

Warid, as we all know, could not last. Mobilink has gobbled it up under the larger brand of Jazz. Pakistan’s troubled telecom sector can now go only three ways. One, the Warid approach: set yourself up for an acquisition. Two, the Ufone, Zong and Telenor approach: stay the course, even if you are bleeding, in the hope that things will change eventually. And third, the Mobilink approach: go in for the kill. Their cut-throat approach hasn’t ended at buying out Warid; but they also ac-

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quired 4G spectrum and are indulging in some aggressive marketing.

Not surprisingly, all eyes, including ours in this issue, are on this third approach. We are seeing some of the Warid-era hubris in its ad campaigns, which seems to be directed not as much to the users as it is to rivals. A brooding lion with text proclaiming how there can only be one king of the jungle.

To cut them some slack for their bravado, it is a bit of a victory march for Mobilink. Despite their considerable head start, Telenor had almost caught up with them; just a sliver of market share short. And things were set to go only worse for the once-mighty player. But now, with the acquisition of such a large player, it is set to be classified as a Significant Market Player (SMP) by the PTA. All of this, costs quite a packet, of course. Even staying the course, like the other players are, costs a considerable amount. Mobilink’s bet, presumably, is that it is going to get rid of these ridiculous rates once it establishes a dominance over the market. It remains to be seen, however, how it will do that without upsetting the Competition Commission of Pakistan. May you live in interesting times, goes an ancient Chinese curse. Much to their chagrin, these certainly are interesting times for the telecom sector.

Babar Nizami

Managing Editor: Babar Nizami l Joint Editor: Yousaf Nizami l Contributing Editor: Farooq Tirmizi l Business Editor: Agha Akbar Editor Reporting: Farooq Baloch l Reporters Aisha Arshad l Arshad Hussain l Usman Hanif l Syeda Masooma l Ahmed Ahmedani Director Marketing: Zahid Ali l Regional Heads of Marketing: Muddasir Alam (Khi) l Zulfiqar Butt (Lhr) l Mudassir Iqbal (Isl) Design & Layout: Rizwan Ahmad l Illustrator: ZEB Photographers: Zubair Mehfooz & Imran Gillani Publishing Editor: Arif Nizami Contact: profit@pakistantoday.com.pk

FROM THE MANAGING EDITOR

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“Pakistan has fortunately become a focal scale for largescale foreign investments” All-Pakistan Business Forum President Ibrahim Qureshi

QUOTE

BRIEFING

“Lack of vision and corruption (in the past) have destroyed Pakistan Railways Federal Minister for Railways Khawaja Saad Rafique

tons of wheat are expected to be produced during the crop season 2017-18. According to an official document, the wheat production in the country during last season was recorded at 25.750 million tons showing an increase of 0.24 percent as compared to last year. Meanwhile, about 9.6 million tons of rice would also be produced in the country to tackle with the domestic consumption as compared the production of 6.849 million, it added. Rice output during previous crop season had witnessed 0.71 percent increase as against the set targets, it added. The maize production targets were set at 6.200 million tons, whereas about 13.6 million cotton bales production was fixed for the crop season 2017-18, it added. The government has fixed at target to produce about 70.39 million tons of sugarcane crop to fulfill the domestic requirements of the sugar. It was that about 73.60 million tons of sugarcane was produced during the crop season 2016-17 which was up by 12.41 percent as compared to the production of 2015-16, it added.

26.5m

$177m

of investment in automobile plants under the Greenfield investment programme is under threat. Two automobile companies, Master Motors and Tayba Motors have filed cases in the Sindh High Court against the Engineering Development Board (EDB) which has given two new industry players permission to set up plants in the country. Plants being set up under the Greenfield investment status have been awarded to Regal Motors for setting up a plan in Pakistan and the application of Foton JW Auto park is still under consideration.

Greenfield status for automobile manufacturers allows to offer new industry players tax breaks and duty concessions on setting up new plants. Master Motors has raised objections to the procedure started to give Greenfield status to Foton JW Auto Park under this new policy. It alleged that Foton JW is already in the business of manufacturing trucks and wasn’t eligible for Greenfield investment category under the new rules. According to the court filing, no trace was found of a joint venture with a Chinese company in the database of Securities and Exchange Commission Pakistan (SECP).

of profits were reported to have been repatriated by telecom companies to their headquarters abroad during last financial year 2016-17, reported the State Bank of Pakistan (SBP). In FY 2015-16, repatriation of profits from the telecom sector was recorded at $176.2m. During the first nine months of FY 2016-17, a decline of 53pc had been recorded in the repatriation of profits by the telecom sector. The sector showed a resurgence in terms of improving its remittances to its headquarters in the last 3 months of FY 2016-17. In comparison to the $54.5m repatriated out by end of March 2017, the April-June 2017 period saw an outflow of $122.9m. Foreign Direct Investment (FDI) in the telecom sector reached $177.2m and profit repatriation almost equaled FDI to be recorded at $177.8m.

$1b

8

BRIEFING

“Pakistan has moved forward and last year it notched up 5.3pc economic growth” Interior Minister Ahsan Iqbal

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Rs2.25b

will be invested in the real estate sector of Pakistan by foreign and local investors as a result of increasing demand for houses and hotels. The country faces a shortfall of 10m housing units due to slow pace of construction being unable to meet rise in population.

Overseas Pakistani’s have made huge investments in the real estate sector domestically and last years expo attracted $500m worth of memorandum of understandings were inked between property builders and developers. As a result of political uncertainty due to the Panama leaks case had caused investment to drop in the real estate sector.

drop in earnings has been reported by Engro Corporation for the April-June 2017 quarter.

Engro reported a rise in consolidated profit aided by non-core businesses but all the gains made were wiped out by super tax, ravaging its net earnings by 3pc to reach Rs2.42b for April-June 2017. The company reported strong income growth from other segments besides its core businesses almost going up by 50pc to reach Rs3.22b in April-June 2017 quarter from Rs1.56b in same period last year (SPLY). Engro Corporation paid Rs4.26b on profit registering a 2.6 time increase from SPLY when tax on profits were reported to have been Rs1.63b. Net sales also reported a decrease of 11pc reaching Rs29.66b in April-June 2017 in comparison to Rs33.17b in SPLY. This was attributable to discontinuation of revenue stream from Engro Foods since the company divested its majority holding to Royal FrieslandCampina in December last year.

3pc

will be distributed under Public-Sector Development Programme (PSDP) during first three months of current financial year 2017-18. For federal segment, PSDP allocation was forecast to be at Rs1,001b from which Rs377.9b had been allotted for federal divisions and ministries.

According to officials, the total disbursements till 16th August made by Planning Commission (PC) were recorded at Rs60b. They added that the finance ministry’s role has been curbed in respect to releases of development funding. The total size of PSDP for FY 2017-18 is forecast to be at Rs2,133b. In a letter sent by PC to relevant departments, has permitted development funds of 20pc for the 1st and 2nd quarter, followed by 30pc for the 3rd and 4th quarter.

Rs120b

$2.41b

will be invested by the Chinese in constructing a downstream petrochemical complex alongside a refinery in Karachi. Proposals for land acquisition of 500-1,000 acres of land in this regard have been presented to Balochistan and Sindh government. Chinese had expressed their ire over high rents in Gwadar Free Zone, due to which they had asked for a piece of land in Karachi. But Federation of Pakistan Chambers of Commerce and Industry (FPCCI) President Zubair M. Tufail went on to share that Port Qasim cannot cater to a project of this size, hence the request for land a few kilometers away from it had been put forward. Chinese had also requested for a land allotment in Hub area of Balochistan and would go with the better deal that is offered by either the Sindh or Balochistan govt. Petrochemical complex to be set up will house a refinery having capacity of 10m tonnes annually and downstream processing equipment for naphtha and component chemicals. The time period for building this project would take four to five years.

of foreign direct investment (FDI) was attracted by food, power, construction, electronics, oil and gas exploration, financial business and communication sectors respectively.

Due to China Pakistan Economic Corridor (CPEC), China emerged as the top investor during the last three years, with outlay of over 1.1 billion investments, almost half of the inflows received during the fiscal year.

FDI inflows continued to maintain a moderate pace marked by improvement in multinationals' confidence in the country's economy. The global integration of economies has given an opportunity to developing countries to adopt liberalized policies to attract foreign direct Investment (FDI), official sources said adding that the Special Economic Zones (SEZs) have also helped in attracting FDI.

$4b

BRIEFING

BRIEFING

“Pakistan Property Show in Dubai will help bolster the national exchequer by attracting medium to long-term foreign direct investment” Zameen.com CEO Zeeshan Ali Khan

bailout could be received by Pakistan International Airlines, as the government considers increasing its sovereign guarantees to Rs172b. Aviation division has sent a summary to Ministry of Finance requesting approval for increase in borrowing limit of PIA because of its worsening financial position. This bailout will be subject to a go-ahead by Economic Coordination Committee (ECC) which is chaired by the PM Shahid Khaqan Abbasi and the finance ministry is completing the procedural requirements to get this bailout approved. If this bailout gets the nod, it will be the fourth time in the last year that PIA has been granted an increase in sovereign guarantees to make it eligible to obtain more loans and meet its expenditures. In January this year, the government had increased the ceiling cap of sovereign guarantees from Rs151b to Rs161b.

Rs10b

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QUOTE

10.58pc

was the figure of growth for exports during July the first month of the new financial year 2017-18. Pakistan exported goods worth $1.631 billion in July 2017 compared to the exports of $1.475 billion in July 2016, showing upward growth of 10.58 percent, an official in ministry of commerce said on Friday. The merchandise imports during the month under review also increased by 36.74 percent compared to July 2016. The imports into the country during July 2017 were recorded at $4.835 billion compared to the imports of $3.536 billion, the data revealed.

were earned from sport goods exports during financial year 2016-17. The earnings from export of sports products dropped 5.17 percent during the period when compared to the exports of $324.738 million during the fiscal year 2015-16, official data revealed. Among the sports products, the exports of footballs decreased 11.7 percent during the period under review. The football exports during July-June (201617) were recorded at $152.549 million compared to the exports of $172.901 million during July-June (2015- 16), according to data of Pakistan Bureau of Statistics (PBS). However, the exports of gloves surged by 16.02 percent by going up from $92.750 million to $107.608 million, the data revealed. Meanwhile, on year-on-year basis, the exports of sports goods decreased by 1.19 percent in June 2017 when compared to the exports of June 2016. The sports goods' exports in June 2017 were recorded at $27.176 million compared to the exports of $28.515 million according to the data.

$307.943m

50pc

of arrears owed under Gas Infrastructure Development Cess (GIDC) Act 2015 will be waived off to the CNG sector. The bill will first be put before the cabinet and is expected to be approved within the coming week, before it gets tabled in parliament. All Pakistan CNG Association Chairman, Abdullah Paracha disclosed that they had reached an agreement with Oil and Gas Regulatory Authority and the petroleum ministry to pay Rs12b on account of GIDC. Rs12b is half the amount owed by the CNG sector for provision of gas supply to their filling stations said a senior official of OGRA. This payment of Rs12b covers the period of Jan 2012 to May 22nd, 2015. Although the gas prices reflect the cess surcharge and is being collected by CNG stations as per law, but the payments have been withheld and haven’t been deposited with Sui Northern Gas Pipelines (SNGPL) and Sui Southern Gas Company (SSGC) due to courts stay orders. SSGC and SNGPL are then required to deposit this cess payment into the federal kitty. CNG industry is said to have already paid Rs19b under GIDC and now Rs12b will be paid for the period of Jan 2012 to May 22nd,2015.

BRIEFING

Mydoctor.pk, Marham, ZocDoc, AugmentCare and a few others have launched digital startups that make doctor appointments for patients as easy as ordering pizza

By Syeda Masooma obile apps are the new mode of living life in Pakistan. After mobile phones reducing distances in making conversations, now mobile apps are slowly removing the need of a person-to-person contact. From ordering food to hitching a ride, mobile apps have taken over almost every part of commute or consumer requirements of an urban resident.

In a totally automated process, customers can place their orders and receive the product or service delivered at their doorstep.

In terms of efficiency as well, these apps grant much more freedom, certainty and control to people in their daily lives.

One thing, however, still dominated by phone calls and personal communication is booking an appointment with a doctor. The receptionists are there in every clinic and every hospital. Patients have to either make

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‘ONE OF THE KEY CHALLENGES WAS TO DEVELOP A NEW CATEGORY. WHEN UBER AND CAREEM CAME TO PAKISTAN, THEY KEPT GIVING FREE RIDES FOR A YEAR AND A HALF. BUT THEY HAD THE KIND OF MUSCLE AND MONEY TO AFFORD THAT’ Abid Zuberi, the man behind Mydoctor.pk, along with brother Arif Zubri calls or visit the clinic and book a time at which they can consult the doctor in order to be treated. The waiting rooms of clinics and hospitals are chock a bloc, and patients and their attendants have no option other than to wait or leave.

But now, in keeping with the spirit of the times, a few innovators have tried to eliminate this by bringing doctor appointments to mobile apps – albeit with a mix of success and failure. ZocDoc, Marham, Augment Care and Mydoctor.pk are a few cases in point.

To gain a deeper insight into the challenges and scope of such services, Profit has tried to reach out to the men who came up with the concept and those that are giving it a go.

Abid Zuberi, the man who launched Mydoctor.pk app along with his brother Arif Zuberi, has a vision: everything involving health care must be under one roof. One of the top 15 startups in Startup Istanbul and incubated with the accelerator Virtual Force in Lahore, is two-faced: Mydoctor.pk for the patients and Mypractice for the doctors. His initiative is based on equity plus $100,000 investment from Virtual Force aiding in product development, in marketing and sales.

Doctors don’t give two hoots to patients’ comfort o far Mydoctor.pk has more than 300 doctors on board and gets around 350 bookings out of 2,500 hits per day from the patients looking for a doctor. The hits and bookings, however, go beyond these 300 doctors and include a much larger directory of 13,000 plus doctors that Abid has put together.

Three hundred appointments out of a pool of 13,000 doctors might seem almost inconsequential but for Abid, this marks a

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major milestone. Though he is not breaking even at the moment and does not expect that to change until the end of next year, he is convinced that being in a stage where he has to change the mindsets while operating in an industry where he will have to overcome the status quo, he is doing pretty well.

“One of the key challenges was to develop a new category. When Uber and Careem came to Pakistan, they kept giving free rides for a year and a half. But they had the kind of muscle and money to afford that. In Pakistan, electronic appointment booking, record keeping is not anywhere. The doctors don’t give two hoots about patients having to wait. So, it will take time for this trend to make a niche.”

He had the basic version of his app ready by end 2015 but everywhere he went he found people advising him against stepping into such a business. “When we started, we talked to several doctors and everyone advised me against it.”

This might not have been such a bad advice since the co-founder of ZocDoc, another online doctor appointment booking app, shared that his venture faced an impenetrable barrier when the doctors completely refused to document their earnings in fees. He and his friend started this project with an investment of Rs700,000. They developed an app, prepared a model of earnings through sub-

scription fee and set out to look for doctors, from fresh graduates to successful, renowned ones. “There is no denying that the conventional way of making an appointment with doctors is tedious. Then there is always a chance of some ‘preferred’ patient showing up, further pushing you down the queue. We started this initiative a few years back and we approached quite a few doctors, including some in the Shaukat Khanum Memorial Cancer Hospital & Research Centre. We prepared a subscription model and made a platform after research.

‘Quantifying income’ is doctors’ bugbear ut doctors, at that time, were simply not prepared to buy the service because of one particular reason. They did not want to be included in any mechanism that can quan-

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‘SO FAR MYDOCTOR.PK HAS MORE THAN 300 DOCTORS ON BOARD AND GETS AROUND 350 BOOKINGS OUT OF 2,500 HITS PER DAY FROM THE PATIENTS LOOKING FOR A DOCTOR. THE HITS AND BOOKINGS, HOWEVER, GO BEYOND THESE 300 DOCTORS AND INCLUDE A MUCH LARGER DIRECTORY OF 13,000 PLUS DOCTORS’ STARTUP

tify their earnings. Then we consulted experts who told us that doctors here work on cash and insurance is not as much of an influencing factor here for them to have any incentive to document their workings.” Eventually, ZocDoc was set up for sale to an interested investor in Dubai but the complicated setup at the back end made it virtually impossible for a second player to build up on the same model and ultimately ZocDoc came to the end of its life.

Arif does not dispute this challenge but insists that the arrival of Uber and Careem made it far easier for him to succeed.

Despite facing a major backlash in the early days of his initiative, now he feels that doctors are becoming more willing to digitize their records. He also claims to have found a solution to the doctors’ concerns with regard to not disclosing their earnings. “The tax evasion challenge is there and we are still suffering from it.

They say that you have all this data and you will give it to FBR [Federal Board of Revenue]. So, we have made a deal with them that we will give them all the data.

The point is that I am not here to produce documented economy but we are here to facilitate the patients and for that we have to facilitate the doctors too.”

He added that being an HIPAA (Health Insurance Portability and Accountability Act) compliant company, he is obligated to protect the doctor and patient information. “According to this international standard data is not going to be public anyway. So, if a doctor asks us that he doesn’t want his data to be in the cloud with us but wants to keep it between him-

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‘DOCTORS AT THAT TIME WERE SIMPLY NOT PREPARED TO BUY THE SERVICE BECAUSE OF ONE PARTICULAR REASON. THEY DID NOT WANT TO BE INCLUDED IN ANY MECHANISM THAT CAN QUANTIFY THEIR EARNINGS’ self and his client, we provide that option too.”

AugmentCare, seems to have had an easier road to market than Mydoctor.pk.

Its CEO, Hyder Mumtaz has worked in the digital health industry out of the Middle East and comes from the family behind Fazal Din & Sons, one of the largest healthcare groups in the country. Hyder & his co-founder Ahmed's experience with healthcare systems around the world is probably what has made them focus on

multiple stakeholders in the patient care journey and not just private practices of doctors. AC is already working with hospitals and will be releasing more partner updates in September.

His Business Development Manager Aleena Iqtidar said that hospital managements have been very responsive to their proposals of digitizing patient records because it not only helps them keep track of the quality of care/doctor efficiency but allows for an easy 'app friendly' experience with their patients.

The sales team at AugmentCare gave insight into how a lot of the clinics they have met have not only been willing to adopt such a technology and platform but were anticipating such an opportunity to improve their operations and digitize the clinic environment. While the doctors might not be readily open to the idea of forgoing independence in favour of efficient organization, for hospitals the idea is more attractive since a record of all of their doctors takes precedence over the individual performance of each doctor.

However, Hyder said that even the private clinics they contacted have been willing and, in some cases even anticipating, such

‘THE ARRIVAL OF AT LEAST HALF A DOZEN PLAYERS IN THE MARKET CAN EITHER REVOLUTIONIZE THE INDUSTRY PRACTICES OR END UP CROWDING IT OUT ALTOGETHER. AS OF NOW, EACH OF THESE PLAYERS HAS HIGH HOPES, BANKING UPON THEIR CLAIMS OF PROVIDING SOMETHING DIFFERENT BUT WORTHWHILE’

‘HOSPITAL MANAGEMENTS HAVE BEEN VERY RESPONSIVE TO OUR PROPOSALS OF DIGITIZING PATIENT RECORDS BECAUSE IT NOT ONLY HELPS THEM KEEP TRACK OF THE QUALITY OF CARE/ DOCTOR EFFICIENCY BUT ALLOWS FOR AN EASY APP-FRIENDLY EXPERIENCE WITH THEIR PATIENTS’ Aleena Iqtidar, Business Development Manager, AugmentCare an opportunity to digitize patient files and other data.

Convincing doctors to come on board nterestingly Mydoctor.pk, ZocDoc, and AugmentCare have all chosen to charge a subscription fee to doctors instead of patients. On the face of it, the doctor patient ratio, as well as patients being the primary facilitators of these apps, paint this model in irony.

However, all these players had a similar explanation for this. Abid said, “We need to convince doctors to come on board. If they are not willing to completely switch their paper/pen mode, the main objective of keeping a time-bound appointment becomes redundant. If the receptionists are still squeezing in patients than the selling point of facilitating patients fades away.”

ZocDoc owner said that patients themselves will not be willing to come to this platform unless there is no other way and that will only happen if the doctors get rid of the conventional model. “If I can get an appointment sooner because

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someone I know knows the doctor I want to see, why would I even go to the effort of making an online appointment?”

Mydoctor.pk charges the consultancy fee for two patients per month (and upwards) to the doctor according to their individual fees, making a different fee charged to every doctor. ZocDoc had a uniform fee structure which they never got to put in practice. Augment Care refused to share their fee as yet. Abid, however, added that there are some more models under discussion towards their earning models.

Mydoctor.pk has partnered up with Fonepay as their exclusive partners for payments. They also have Servaid on board as the medicine provider. Chughtai Labs is on board with the company to provide testing facilities to interested patients and Aman Foundation’s doctors are available for free consultation. “The telemedicine or video conferencing for a consultation with doctors is not as yet available, but we have already developed its technology and we are in the testing phase.” AugmentCare’s Aleena also said, “Partnerships are the essence to the suc-

What is HIPAA, and what it entails?

HIPAA, the Health Insurance Portability and Accountability Act, sets the standard for protecting sensitive patient data. Any company that deals with protected health information (PHI) must ensure that all the required physical, network, and process security measures are in place and followed. This includes covered entities (CE), anyone who provides treatment, payment and operations in healthcare, and business associates (BA), anyone with access to patient information and provides support in treatment, payment or operations. Subcontractors, or business associates of business associates, must also be in compliance. The HIPAA Privacy Rule addresses the saving, accessing and sharing of medical and personal information of any individual, while the HIPAA Security Rule more specifically outlines national security standards to protect health data created, received, maintained or transmitted electronically, also known as electronic protected health information (ePHI).

‘BUT NOW, IN KEEPING WITH THE SPIRIT OF THE TIMES, A FEW INNOVATORS HAVE TRIED TO ELIMINATE THIS BY BRINGING DOCTOR APPOINTMENTS TO MOBILE APPS – ALBEIT WITH A MIX OF SUCCESS AND FAILURE’ cess of any organization. We love to partner up with companies who share the same vision as us”. The company’s Product Manager Wajih Shafiq added, “We are currently working with doctors and hospitals and will be more than happy to share advance updates in the coming month.”

The arrival of at least half a dozen players in the market can either revolutionize the industry practices or end up crowding it out altogether. As of now, each of these players has high hopes, banking upon their claims of providing something different but worthwhile.

How these start-ups may proceed in this nascent business, how all this eventually pans out only time shall tell. One thing is certain, though: the doctors shall have a major say on which way it blows.n

STARTUP

Having moved to food retailing back home, from telecom to management consultancy abroad, the founder of the Taazo brand believes he is onto something good with his latest venture

By Syeda Masooma

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ormer head of the Digital Business Unit for a Middle Eastern telecom company and previously Managing Director for the Middle East region for a global management consulting firm, Jawad Shaikh is now the owner of Lahore-based Taazo.

With a joint engineering and business degree from Cornell University, New York, Jawad does not dismiss his passion for technology and telecom sectors. Yet, he abandoned a successful career in the Middle East and the UK, and chose to return home – with an intent to invest into business ventures along with some friends. Taazo, a biryani joint, was the first of these, and it has spread to two outlets.

The one at the Main Boulevard (opposite Pace) seats 10 people while the new joint on Jail Road (opposite Services Hospital) is larger.

Like the attractive orange containers that Taazo serves in, the ambiance of the two outlets is in a refreshing orange colour.

Aroma of freshly cooked biryani is the first to greet customers followed by a cheerful cashier and smartly-clad attendants.

Profit had a tete-a-tete with Jawad at his Main Boulevard outlet to learn about his venture so far and how he intends to go about it. “Together with a few friends I had been looking at businesses with a view to exploring opportunities to move back. Some six months prior to this, we did brainstorming about potential ideas before deciding to invest into Taazo.” He and his friends have agreed that they will decide on a venture and whosoever wants to invest, can, but it is not an obligation.

He chose to launch Taazo because he felt that there was no food retailing brand in the country that guaranteed a uniform level of quality, taste and service – irrespective of its location. “Since I am quite well-travelled, I noticed that abroad there were prominent fast food chains known for their consistent quality, irrespective of where they were being sold. I couldn’t find anything similar here in Pakistani, particularly at an affordable price.”

freshness and consistency, watchwords for taazo e had been working on this idea since the beginning of the year and the watchword for him was ‘freshness.’

“From ingredients to presentation and taste I wanted my product to be fresh and look and taste like homemade food.” Taazo is a Sindhi word, meaning ‘fresh’. Jawad came up with this name in-flight, while hunting for ideas on naming his new business.

He chose ingredients that he would prefer using in his home for his own meals.

He gets his rice from Hafizabad. “We got a whole stock of it, as the more it ages, the better it tastes so that is not a problem either.” His chicken supply, however, comes from a well-known frozen foods brand.

“Fresh chicken has its own issues in pro-

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‘wHat i Really coveted foR: no one must tHink twice about eating at taazo’ Jawad Sheikh

cessing and transportation, so we avoided that to ensure quality.” He said that he brought an experienced chef on board and after extensive trials made the Taazo biryani recipe instead of using packaged masala mix.

“We have done major investment on our high-end cooking [kitchen] facility. It is essential for the whole thing to work; so it is to full-blown international standards of hygiene as well as equipment and working methods. What I really coveted for: no one must think twice about eating at Taazo.

“We have some customers who usually avoid eating outside home but regularly visit Taazo. One patron told me that he can’t digest outside food, but he eats three to four times a week here.”

Despite all this input, Jawad has chosen to lay low on the marketing, focusing primarily on nearby customers on and around Main Boulevard – from Liberty to Siddique Trade Center, instead of going all out with TV commercials or leaflets. “There is a deliberate reason why I haven’t yet gone all out for marketing. I didn’t want to make any promises to customers that I couldn’t keep. It has been only two months since May when I opened this place and I

wanted to make sure to get the operations in order first. Then Ramadan slowed down the retail business but it gave me more surety of how I wanted to run this. Now the push is starting on the marketing front.”

affordable to all awad and his team took their biryani to office workers, shopkeepers and shoppers around the area of his first outlet on the Main Boulevard. He narrated that people not only appreciated the food but also volunteered to take them to other shops and introduce their friends to the taste. “Some people were even able to tell that Taazo biryani tasted like the one offered at a renowned five-star hotel; no wonder, for I had poached my chef from there.”

He has made his location decision entirely on footfall, which has also made him

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‘He cHose to launcH taazo because He feels tHat tHeRe is no food Retailing bRand in tHe countRy tHat guaRantees a unifoRm level of quality, taste and seRvice – iRRespective of its location… abRoad tHeRe aRe pRominent fast food cHains known foR tHeiR consistent quality, iRRespective of wHeRe tHe outlets aRe located. i couldn’t find anytHing similaR HeRe witH pakistani food, paRticulaRly at an affoRdable pRice’ Retail

consider going to malls. “We are in discussions with the major malls and it is a priority. I want to build Taazo on McDonalds model, accessible to all – blue collar workers to students to families – and at a consistent quality.” So far he only operates on the Main Boulevard and Jail Road – both busy locations, involving a customer body primarily of office workers, retailers and students, but also host to doctors, hospital staff and entrepreneurs.

Jawad considers his venture a budding success, even though he agrees that the timing of his entry, and Ramadan have been the reasons for the gentle upward growth curve.

He plans to excel in one dish first before additions to the menu – “we want to provide the best biryani in Lahore at a price that’s affordable to all” – being his ambition for the brand. Although recipes are the primary factor for a food business, he does not seem too worried about its secrecy. “We do have IP of our recipe and there is always this risk in restaurant business but even if someone copies it, it’s just a recipe, not our entire model. We spent four months only on building the state-of-the-art infrastructure and developing the brand and customer experience, and that cannot be copy pasted just from the recipe.”

High on quality and hygiene hough he was not prepared to say much about the financials of the business but he did mention investing a significant sum of money in both infrastructure and brand building. “The biggest operational expense for now is on our high quality ingredients.”

Jawad’s concern for quality and freshness goes beyond just the edibles. Unlike

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aluminium or Styrofoam packaging, Taazo has taken to reusable and microwaveable, food grade plastic packaging. The bright orange bowls – the color also known for its ability to increase appetite – can be taken away and is particularly popular with female customers. “Though it adds to the cost significantly, but it’s essential to project our brand image of freshness, high quality and hygiene”, says the Taazo founder. The price offered is also mid-range as compared to other biryani brands that are targeting the mass market. “Operationally you can say we are breaking even. But I have a completely long-term focus so I am not worried about fast break even or franchising it and running away.”

Despite H Block market in Defence,

‘JAWAD’S CONCERN FOR QUALITY AND FRESHNESS GOES BEYOND JUST THE EDIBLES. UNLIKE ALUMINIUM OR STYROFOAM PACKAGING, TAAZO HAS TAKEN TO REUSABLE AND MICROWAVEABLE, FOOD GRADE PLASTIC PACKAGING. THE BRIGHT ORANGE BOWLS – THE COLOR ALSO KNOWN FOR ITS ABILITY TO INCREASE APPETITE – CAN BE TAKEN AWAY AND IS PARTICULARLY POPULAR WITH FEMALE CUSTOMERS’ 18

M.M Alam Road in Gulberg, and the Food Street in central Lahore overflowing with food outlets, many of these offering Biryanis, Jawad does not consider any as his competitor. To him, his model forms the basis for competition. To his knowledge, he claims with aplomb, there is no other brand that is operating on a similar model or at the same level as Taazo.

Jawad concluded, “I have lived outside Pakistan a lot, first in the UK and then in the Middle East. In starting Taazo, returning to one’s roots was also a factor, but for a business you need to make sure it makes economic sense – and I do believe that Pakistan offers tremendous opportunities..

Since my background is in telecom and digital area, so that was an obvious avenue to pursue and that too is there. Moreover, before telecoms I worked extensively in management consultancy. So I have got to experience a wide range of sectors. But targeting the middle market with a well-orchestrated high quality food-retailing brand was one glaring unexplored opportunity and I felt that I needed to take it. There are several challenges but the market provides opportunities as well and that you cannot deny. However, Taazo is not the only initiative that I plan to do here. My next project will be most likely in digital space, in line with my previous experience.” n

RETAIL

COVER STORY

Significant market power but still…

JAZZ GOING IN FOR THE KILL From almost losing its leadership position to Telenor, Jazz has made a strong comeback, going well past the threshold for a significant market power (SMP), and is now looking to further shake up Pakistan’s hyper-competitive telecom sector. With the largest player on the offensive, analysts foresee further consolidation, layoffs, and another casualty t is 6:30 on a Sunday (August 20) evening, a roadside vendor, using open cry method, lures half a dozen men to his shop – a small wooden table and chair under a patio umbrella branded as Jazz (formerly Mobilink). He then offers them mobile subscriber identity module (SIM) cards for free.

“700 minutes to Jazz and Warid networks, 700 text messages and 70 MBs of Internet [data] for a week,” the vendor says responding to one of the customers inquiring about the offer. “With this, you also get Rs30 credit balance,” he tells another and invites more people to his shop, which is located off Korangi Crossing bus stop, one of the busiest and most populated areas in the city – similar shops have been running this promotion all over the city.

About 1500 kilometers north, the company’s leadership in the federal capital has joined hands, among others, with Qmobile and Haier for selling entry level smartphones with a branding of Jazz, a fully-owned subsidiary of Global Telecom Holding S.A.E. (formerly Orascom Telecom), which is 57.7 percent owned by Netherlands’ Veon (formerly VimpelCom).

The company’s website is selling Xplore JS300

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smartphone for Rs2,999 ($30) that equals one-week compensation of an unskilled, uneducated worker in Karachi – add to that a credit of Rs800 (to be utilized in four months) that comes with the device, making it cheaper still.

On top of tariff unification with Warid, which it acquired in 2015, and free on-net minutes, Jazz is also giving away free monthly data packages on purchase of its newly launched 3G and 4G devices. If one has missed all of this, it only takes a few minutes of primetime transmission to find out how aggressively Jazz is marketing its products in electronic media.

In the past, other brands have run similar, some even more attractive, promotional schemes including cash awards and brand new cars to expand their customer base in the $4.5 billion hypercompetitive telecoms market of Pakistan, which has been going through an intense price war for several years – literally fighting in paisas (pennies) to prevent margins from squeezing further.

Therefore, none of these aggressive promotions is new.

However, this time it comes from the largest cellular operator in the country, not known for such aggres-

sive strategies.

Historically, Mobilink (before its rebranding to Jazz) always refrained from engaging in price wars with smaller players like Ufone and Zong and rather liked to be known as an expensive brand that believed in charging a premium for its services. In fact, Jazz’s top management often crowed about this publicly – but, it is doing exactly the opposite now, and is fighting its competition tooth and nail by resorting to methods that it used to looked down upon.

Jazz sustaining dominance after surviving Telenor scare lmost taken over by Telenor Pakistan as numero uno only a couple of years ago, Jazz has not only sustained its dominance but also become the most aggressive player in the market. Industry expert attribute this aggression to a recent management turnaround and an unprecedented lead following the acquisition of Warid, which also marked Abu Dhabi Group’s exit from telecom sector.The company’s latest strategy is becoming more visible with every new move, but it had already sent a clear and loud message to the competition right after completing the merger and rebranding from Mobilink to Jazz.

In its first major marketing campaign as a merged entity, Jazz created a buzz in the market last December with its new ad – aggression-filled face of a lion in the right half of the frame and a message on the left: there is only one king in the jungle, officially one network of 50 million customers.

Over the next few days, the ad was everywhere from the company’s social media pages to mainstream publications and electronic media. The company also put up life-size billboards on all major thoroughfares of Islamabad, the headquarters of all cellular service providers operating in the country.

Its customers have increased to 52.4 million since then. The company now accounts for 39 percent of the market based on value (sales), well above 25 percent, threshold for a company to become a significant market power (SMP) as per Telecom Rules 2000 – subject to a

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Jeffery Hedberg (L) turned it around but now Aamer Ibrahim (R) is taking it a notch further… with greater aggression

determination by Pakistan Telecommunication Authority, SMP status is a regulatory measure to prevent a large company from abusing small players.

Whether PTA declares it an SMP or not, Jazz is already going in for the kill following a dramatic turnaround and a lead, not easy to chase – the new price war sparked by the market leader could lead to further consolidation, more layoffs and possibly another exit: this time of Etisalat, the UAE-based parent of Ufone, now the smallest player in the market.

The telecom regulator didn’t respond to Profit’s queries, shared with them a month in advance, therefore, we could not find out the regulator’s stance on the subject nor did Jazz entertain our questions or repeated requests – made to them over the past six months – for an interview with its chief.

However, background interviews of officials familiar with the developments, an expert analysis, and feedback from other operators indicate the recent management turnaround and the new direction Jazz seems to be taking is both remarkable and threatening.

Stagnant growth and beating by Telenor efore we talk about the much-anticipated change in Mobilink’s management style, we would like to go a few years back to find out why it was needed in the first place.

Pakistan Mobile Communication

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Limited, commonly known as Mobilink, was the first GSM operator to launch in Pakistan in 1994 through a joint venture between Saif Group and Motorola Inc. Beginning in 2000, Egypt’s Orascom Telecom (later rebranded as Global Telecom Holding) started buying stakes in Mobilink over the next decade and now owns it 100 percent.

With its first mover’s advantage, Mobilink became an established player in the country within no time. It already had a decade’s lead time and around 10 million subscribers when Abu Dhabi’s Warid Telecom and Norway’s Telenor launched their Pakistan operations in 2005. It got even bigger in the next two to three years when China Mobile’s Zong was still setting its footprint into the country.

Unchallenged in a much less competitive market thus far, Mobilink was put to test for the first time and the next five years proved to devastating for the longtime market leader.

According to a report by Propakistani, an Islamabad-based blog that has extensively covered the telecom sector, former CEO Zouhair Khalid resigned in 2008 because of falling revenue and slow growth – as a result, Rashid Khan became its new chief.

However, the change of leadership hardly helped Mobilink stem the decline.

Telenor and Zong had captured a significant chunk of the market by end of fiscal year 2009 whereas Mobilink’s growth slowed down.

TELECOM

The Pakistani subsidiary of GHT lost 3 million users in FY2009 alone. It was the only operator to lose customers that year whereas cellular sector’s revenues grew by 16.5 percent and subscribers by 7 percent in the same period. By that time, Telenor had become the second largest operator. In the next five years, Mobilink added 9.5 million customers while Telenor Pakistan expanded its user base by almost 16 million and came really close to surpass the former.

Zong engaged in an intense price war with Ufone to lure the low-end customers, the Norwegian telecom giant, on the other hand, was giving Mobilink a run for its money – Telenor hit them the hardest in six-month period ending March 2015 by earning Rs51.9 billion in revenues, slightly higher than Mobilink’s Rs51.3 billion for the period, leading to talks that the latter was going to lose the leadership position for the first time in its 21-year history.

ith Telenor catching up fast, a change in the status-quo was almost visible to analysts in Pakistan, but Mobilink’s Dutch parent saw it coming long before that – it tasked Jeffrey Hedberg, who would replace Rashid Khan in mid2014 as the company’s new chief, to get the job done.

Two-and-a-half years later, Jazz came roaring back earning Rs135.6 billion in calendar year 2016, far higher than Telenor’s Rs83 billion for the period – how he did that wasn’t rocket science.

“Hedberg depoliticized the company and changed the work culture,” an official who witnessed the management turnaround first hand told Profit, requesting he would not be identified.

Internal politics and a ‘suite culture’ in Mobilink was seen by many of its current and ex employees as the major reason

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Orascom Telecom Holding purchased 26 percent stake in Mobilink

Former President and CEO, Zouhair Khalid resigns, Rashid Khan replaces him

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2008

1994

Mobilink launched operations in Pakistan through joint venture between Saif Group and Motorola Inc.

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The management turnaround

Mobilink purchases 3G license and Jeffrey Hedberg replaced Rashid Khan as CEO

for the company’s poor performance under the former’s leadership. This was also evident from two dozen comments appearing below a July-2014 post by Propakistani that announced Khan’s exit from the company – Khan, who is now the CEO of Ufone, didn’t respond to Profit’s queries sent to the company through its PR agency.

Recalling his time with the former CEO, the official said Hedberg fired most of the top-tier management because “they were bureaucratic and reactionary”. They were complacent, unwilling to push themselves or innovate.

In fact, Aamir Ibrahim, the current CEO of Jazz, himself admitted Mobilink was living in the age of dinosaurs and had an old-fashioned management style when he rejoined the company – Ibrahim was one of its founding members.

“When we arrived at Jazz two years ago, I realized that a lot of our internal processes were not really customer centric. They were old fashioned,” Ibrahim

Aamir Ibrahim becomes CEO, rebrands the company to Jazz; customers of the merged entity gets both 3G and LTE services

2014

2005

2009

Mobilink reached 10 million customers as Telenor and Warid launched enter Pakistan

Mobilink loses 3 million users in fiscal year 2009. It is the only player that doesn’t grow that year where as cellular sector’s revenue grows by 16.5 percent and subscriber base by 7 percent in the same period.

2016

2015

Telenor surpasses Mobilink in revenue for the first time in Jan-March quarter; Mobilink loses 5 million customers as a result of SIM government’s reverification drive; Aamir Ibrahim joins as Deputy CEO; Mobilink acquires Warid

2017

Jazz’s Dutch parent, Veon announces its plans to become a global tech player, launch of its new global personal internet platform in many markets, including Pakistan; Mobilink acquires 4G license; Jazz is expected to make a major announcement this month.

said speaking at Digimark in Lahore earlier this month. Giving example of an expense claim, the CEO said it would go on a paper with a receipt attached to it, travel from one office to another, and require eight to nine signatures before it could be processed.

Before Hedberg joined the company, people were working in silos and employees’ morale was down. Mobilink was one of the companies that were not even ready to participate in the auction of 3G spectrum because they were much behind Telenor in upgrading their network to the next-generation mobile broadband technology, more than one source confirmed this to Profit.

However, the change of leadership turned things around. “Jeffrey played American football and even danced with employees including support staff to send a clear message about the change he was about to bring,” the official said.

Unlike former CEOs, Hedberg visited company offices in Hyderabad, Sukkur, Multan, Faisalabad and other small cities to lift the morale of employees. Back at the headquarters, he made small changes like demolishing a café where butlers used to serve directors and eating with guards in the basement café, which was previously meant for lower management. Hedberg was very accessible

‘ON TOP OF TARIFF UNIFICATION WITH WARID, WHICH IT ACQUIRED IN 2015, AND FREE ON-NET MINUTES, JAZZ IS ALSO GIVING AWAY FREE MONTHLY DATA PACKAGES ON PURCHASE OF ITS NEWLY LAUNCHED 3G AND 4G DEVICES. IF ONE HAS MISSED ALL OF THIS, IT ONLY TAKES A FEW MINUTES OF PRIMETIME TRANSMISSION TO FIND OUT HOW AGGRESSIVELY JAZZ IS MARKETING ITS PRODUCTS IN ELECTRONIC MEDIA’ and always available to any employee who wanted to see him.

Besides changes in the work environment, Hedberg’s Mobilink hired some of the industry’s best talent, mainly from Telenor’s marketing and mobile financial services divisions, on a much higher compensations. These new high-level executives, including Ibrahim – one of Telenor’s top guns who became Mobilink’s chief last year – formed strategies and increased business.

The recent turnaround was certainly remarkable, for one it changed Mobilink’s culture for the better and two it helped the company close 2015 with Rs104 billion in revenues, much higher than Telenor’s Rs75 billion for the period – but that was-

n’t the only job Hedberg was sent for. Successful acquisition of Warid was another major task under his belt.

The deal further strengthened Mobilink’s position in the market, giving it an unprecedented lead over competition.

At the end of fiscal year 2016, Telenor’s market share was 28.5 percent, less than a percentage point behind Mobilink, which accounted for 29.3 percent of the total cellular subscribers – this has changed to 37.5 percent and 29 percent respectively.

Shaking up the market ith its own house back in order and 30 percent growth in revenue last year, it was inevitable from Jazz to leverage its dominant position and shake up the market, which is already going through a rough phase.

After a decade of double-digit growth in revenues, which more than tripled to Rs355 billion in seven-year period ending June 30, 2010, the industry’s golden era started fading away.

Hitting an all-time high of Rs463 billion in FY2014, revenues started declining, especially after the launch of mobile broadband services and subsequent rise of over the top (OTT) services like WhatsApp, which have squeezed their margins even further.

According PTA’s data, voice call prices decreased from Rs1.68 as of FY2011 to Rs0.6 per minute at the end of FY15. The sector’s Average Revenue Per User (ARPU) dropped 18 percent to Rs209 in the same period.

Amidst high taxes and low tariffs,

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TELECOM

most operators are finding it hard to grow margins. But through its acquisition of small player, Jazz has been able to significantly expand its user base within a year.

The Pakistani arm of Veon now boasts 52.4 million customers, which is 13 percent higher than the entire customer base of Zong and Ufone put together, and is literally going in for the kill through aggressive promotions and new product launches. Since the industry is already operating on thin margins, this aggression could result in a casualty, most likely of Ufone, the smallest operator in the four-player market.

“It can easily happen that a much bigger player, exploiting its dominant position, starts offering large number of free on-net call minutes,” says Parvez Iftikhar, CEO of the Islamabad-based information and communications technology think tank, ICT Forum Pakistan.

“This can be particularly dangerous when the interconnect regime has not been updated for nearly a decade,” the ICT expert says.

Under the current regime, an operator pays 90 paisas (Rs0.9) per minute as interconnect charges for calls its customers make to other networks. In other words, Ufone, which accounts for a mere 13 percent of the market, pays more to other three operators when its customers make calls to their networks than it earns from them, which results in negative inflows for the company.

That also explains the looming threat, Rainer Rathgeber, Ufone’s former CEO, al-

ready warned about. “The regulator should ensure a level-playing field for all operators,” he told this scribe in response to a question during his visit to Karachi earlier this year when the company expanded its network capacity to improve service quality in the megapolis.

With little to no new investment coming in, Ufone didn’t buy 4G spectrum and is losing badly in the race of 3G. Its mobile broadband users declined 5.7 percent to 4.9 million in FY17 compared to a peak of 5.2 million in the previous year.

The company has been bleeding money hand over fist for quite some time, according to market sources, prompting its parent company to take some big decisions.

As a result, Etisalat decided to consolidate its business in Pakistan by merging Ufone with PTCL. “I am against flooring or regulation of prices, but it should be applied only to the significant market player if PTA goes for it,” Iftikhar said.

Exercising the SMP option could be one way the regulator can protect the market from any abuse, the ICT expert said but added the regulator will have look into various aspects before using that option. For example, Telenor was 24 percent of the market based on revenues of the last fiscal year and may have crossed the threshold (25 percent) for an SMP by now. “Will PTA declare both Telenor and Jazz as SMPs,” he asked.

“If such type of leveraging results in a casualty, it would be a construed as a big

failure on part of our competition regulators, both PTA as well as CCP,” Iftikhar said.

Business and regulatory challenges fone may be facing the biggest threat at the moment but market experts always believed Pakistan was a small market for five operators. With one of the highest taxation rates (up to 40 percent) and lowest tariffs in the world, operators have been finding it hard to increase margins thus resorting to various cost cutting measures.

In the recent past, we have seen companies moving to consolidation, especially infrastructure sharing, and layoffs. Abu Dhabi Group quit already and with Ufone under the hammer, Etisalat may follow suit.

PTCL is absorbing Ufone, which has so far operated as a separate entity. Even large players like Jazz and Telenor have made layoffs.

Our sources say more than 1,000 employees from Warid and Mobilink lost their jobs after the two merged to form Jazz and several hundred were laid off by Telenor in the last couple of years.

“In an effort to drive greater operational efficiency, market dynamics led Telenor Pakistan to discontinuation of sales and service centres across Pakistan,” Telenor Pakistan’s CEO Irfan Wahab Khan told Profit without disclosing the actual

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Telecom Revenues

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345-537

317,016

322,683

311,145

298,510

262,761

236,047

212,423

182,122

133,132

89,896

48,880

27,840

(Rs. Million)

number. “This was a difficult decision to make and we recognize that the change had an impact on a number of customer services staff, therefore, Telenor Pakistan offered VSS,” he said.

Telenor is likely to go for another round of layoffs, sources tell us and there will be further consolidation in the industry, especially on the side of infrastructure.

Historically operators in Pakistan invested north of $500 million each in setting up their own critical infrastructure that is proprietary towers as opposed to renting it from specialized tower operating companies, which was the trend in the West. Since its inception, Jazz alone has invested close to $4 billion in the country while Zong has invested $2.5 billion.

However, with pressure on profitability, the operators eventually realized consolidation was the way forward because it improves operational efficiencies and reduces costs. Starting from sharing infrastructure with each other, the industry is now moving towards selling them to the specialized firms from whom the service can be rented.

According to a former employee, Jazz was setting up a separate company to own and operate all of its 8,500 base transceiver station (BTS) towers, also called telecom towers, and eventually sell them to a tower company.

They usually go under the radar, but independent tower companies are increasing their presence in the country. The UAEbased Towershare entered Pakistan in 2015 by acquiring towers of Warid Telecom.

Edotco, a new business unit of Malaysia’s Xiata Group has acquired Towershare recently and has even more aggressive plans for Pakistan.

“This opportunity is in line with Edotco’s plans to scale up its Pakistan operations and makes it the largest independent

Telecom operators' share in broadband segment end of FY17 tower company in the country,” edotco said in a press release following the acquisition.

Our sources could not confirm if Jazz has already materialized its plans to sell their towers, but when they do they may already have buyer ready to sign deal – this is at least the impression one gets from Edtotco’s strategy for the country.

“This [acquisition of Towershare] puts edotco in a strong position to accelerate its tower build out and take advantage of further acquisition and consolidation opportunities,” the company said.

“Recent acquisition of a Pakistani telecom tower operator by Malaysia’s Axiata Group is a positive indication that infrastructure sharing or outsourcing has finally arrived in Pakistan,” Iftikhar said. He, however, added this could have been done much earlier.

“Consolidation is good, but elimination of a smaller competitor helped by some delayed update of regulations would be catastrophic,” the ICT expert said of how an aggressive strategy by the largest player along with the current regulatory

‘IN ITS FIRST MAJOR MARKETING CAMPAIGN AS A MERGED ENTITY, JAZZ CREATED A BUZZ IN THE MARKET LAST DECEMBER WITH ITS NEW AD – AGGRESSION-FILLED FACE OF A LION IN THE RIGHT HALF OF THE FRAME AND A MESSAGE ON THE LEFT: THERE IS ONLY ONE KING IN THE JUNGLE, OFFICIALLY ONE NETWORK OF 50 MILLION CUSTOMERS’

regime can hurt smaller operators.

With margins under pressure, growing volumes could be an option but operators as well as industry experts are unanimous that a regressive taxation regime is hurting the industry’s growth and investor sentiment in the market. The government needs to review its taxation policies, they say.

But for taxation, things moving in right direction he government and the gegulator can play a big role in reducing cost of doing business by taking measures like elimination of WHT, reduction in GST, elimination of GST on data services, elimination of duties on mobile devices and setting the spectrum price levels at which operators can maximize the investments in networks for better coverage and quality,” Khan, the Telenor chief, said – and Iftikhar echoed him.

The financial challenge is the incidence of high and unpredictable taxation, Iftikhar says, adding, the regulatory challenge is that the regulatory regime is outdated.

“It belongs to the era when Googles and Facebooks had not been born. Some of the mobile telecom licenses are expiring in the near future, and the new licensing regime, promised in the new Telecom Policy, is anxiously awaited. However, the good news is that, except for taxation, things seem to be moving in the right direction.”

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TELECOM

Digitalization: the new direction y adopting the mobile broadband technology in mid-2014, Pakistan kick-started its transition to digitalization, following the global trend: cellular operators all over the world are in a transition period knowing well digital and artificial intelligence based platforms are the way forward.

In Pakistan, most of telecom sector’s revenue still comes from voice, but that is shifting steadily. Data revenue grew 27 percent to Rs99 billion in FY2016, compared to Rs78 billion of the corresponding year, according statistics released by PTA. As the country makes this shift to digitalization, Iftikhar believes the business challenge for the telecom sector is the so-called ‘OTT challenge’, due to which it has become imperative that the telcos shift their reliance from voice revenues to data revenues.

“The OTTs do not have the millstones of regulations around their necks, therefore, they have complete freedom to innovate,” Iftikhar said, adding, “The persistent pressure thus created by the OTTs is forcing the telecom sector to change.”

The ICT expert says monetizing data needs a paradigm shift on part of the operators. “They must start thinking of themselves not just as connectivity providers, but as digital solution providers,” he said but added that some companies can be seen actively taking serious steps in that direction.

“The new era of telecommunication will have the data aspect advantage which would be very clear and definitely a market differentiator for all operators and that

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is where we are currently focusing on. We are expanding our 4G footprint across Pakistan,” Zong told Profit in an email.

Telenor is also using all its digital tools including its My Telenor App to improve service quality.

“We are transforming into a digital company inside-out which means digitalizing our products and services,” the company’s chief said. Khan said they are venturing into adjacent busiTelecom operators' respective shares in nesses similar to Easypaisa, celluar segment at end of FY17 the largest mobile financial service provider in the counaccess information and services, and entry, which has now become a separate engage with their world, in an entirely new tity. “Mobile Advertising, Radio Magan, way,” the company said in a statement.

Mobile Agriculture and Mobile Health are As part of the $1 billion investment such examples that reached millions of consumers in a sort span of time,” he said. Veon CEO announced for Pakistan, Jazz is Telcos in Pakistan are clearly chasing supposed to build one of the largest IT infrastructures in the country. In fact, it rethe digital dream, but some are more agcently tried to buy out Nayatel, Pakistan’s gressive in their approach than others. For first fiber-to-the-home (FTTH) service example, when VimpelCom announced to provider that has transformed Islamabad change its to Veon at Mobile World Coninto one of the world’s most connected gress in February 2017, the Dutch parent and optically wired cities. The company of Jazz had said it was part of the comexpanded to Faisalabad last year and have pany’s repositioning from a mobile telehigh-end corporate and residential cliencom operator to a global tech player – it tele in twin cities and Faisalabad. aims to take on global giants the likes of The deal didn’t get through, but Jazz Facebook and WhatsApp. Later in July, it is showing what its intentions are. announced the launch of its new global “One thing is clear, that Jazz appears personal internet platform in many of its to have started doing something remarkkey markets, including Pakistan. able and commendable. Apparently, there “The platform provides contextualized, personalized internet experiences and is something extraordinary about the new leadership there,” Iftikhar said. “Jeffrey opportunities, enabling our customers to may have danced with employees, Aamir is running marathons with them. Jeffrey certainly turned it around, but Aamir is taking it a notch further, and he is doing it even more aggressively,” he said.

Our sources say Jazz is working on its own app, perhaps the biggest hammer in its tool box, and is likely to unveil it soon along with some other major announcements. The app will be similar to WhatsApp and allow free calls and text messages to its 52.4 million customers and make money from data. Given OTT apps are not being regulated by the PTA, the competition better watch out when the app is launched. n

‘HISTORICALLY, MOBILINK (BEFORE ITS REBRANDING TO JAZZ) ALWAYS REFRAINED FROM ENGAGING IN PRICE WARS WITH SMALLER PLAYERS LIKE UFONE AND ZONG AND IS RATHER LIKED TO BE KNOWN AS AN EXPENSIVE BRAND... IN FACT, JAZZ’S TOP MANAGEMENT OFTEN CROWED ABOUT THIS PUBLICLY – BUT, IT IS DOING EXACTLY THE OPPOSITE NOW, AND IS FIGHTING ITS COMPETITION TOOTH AND NAIL BY RESORTING TO METHODS THAT IT ONCE LOOKED DOWN UPON’ 26

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Exports sliding by near one fifth – around 17 per cent to be precise – over the last four years on the bounce should have been a cause of major concern, making the policy-makers burn the midnight oil to reverse the trend but for reasons unfathomable it has been put on the backburner ECONOMY

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By Arshad Hussain y the end of 2016-17 fiscal, exports receipts have over the past four years on the bounce have been sliding big time – by as much as 17 percent compared to where they stood in 2013 post PPP’s so-called economic mismanagement. The issue has remained under the spotlight, both of public and economic analysts. Yet nothing much has been accomplished by way of reversing the trend.

This inertia of the economic tsar – the one and only Ishaq Dar, in the face of it is rather inexplicable because the current account deficit by now is yawning with every passing day, as the country’s much-touted foreign exchange reserves are also showing a marked downward trajectory.

“There is no government policy to provide a fillip to the country’s exports,” says Dr Qaiser Bangali, one of the most distinguished economists of Pakistan. The exporters have been hit by a double whammy: around 50 per cent of their earnings are sucked in by taxes while higher production costs owing to the ever-escalating electricity and gas tariffs is killing them too.

“The share of Pakistani exports in the global market is relatively miniscule, and has further declined over the past few years because of incompetent ministries or lack of interest,” he claimed.

According to data available with Profit, Pakistan has an extremely low ‘export orientation’, with the size of the merchandise export sector in the overall economy declining from around 14 per cent of GDP in the early 2000s having been halved to barely 7 percent now.

Despite the government’s efforts to enhance exports that fell in the realm of too little, too late, our exports still declined by 1.63 per cent to $20.448 billion in (JulyJune) 2016-17 from $20.787 billion in comparison to the previous fiscal, the Pakistan Bureau of Statistic (PBS) recent data release revealed. In contrast, the imports surged by 18.67 per cent to a record-high $53.026 billion against last year import of $44.685 billion.

“The exporters are shutting down their factories and investing their capital in the stock markets to get higher profits as the exports business is relatively unprofitable in prevailing circumstances,” says Bengali,

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‘THE SHARE OF PAKISTANI EXPORTS IN THE GLOBAL MARKET IS RELATIVELY MINISCULE, AND HAS FURTHER DECLINED OVER THE PAST FEW YEARS BECAUSE OF INCOMPETENT MINISTRIES OR LACK OF INTEREST’ Dr Qaiser Bangali, one of the leading economists adding, “India and Bangladesh are giving several incentives to their exporters.”

Shrinking, from a low base nfortunately, he said, our industrialists are not as educated as they should be. Therefore, their demands from the government do not reflect their true requirements. Tax rate on the exports and the production costs make our products uncompetitive in the international markets while the same Indian and Bangladeshi product are way cheaper than Made in Pakistan stuff. “All this is reflective of the woeful government policies; they simply don’t know how to manage it.”

With the exports shrinking from an already low base (relative to the overall economy) since the 1990s, the lack of urgency, the level of apathy and inattention shown by successive governments speaks volumes.

While in the case of almost all developing countries that have become export

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powerhouses since the 1960s, the highest leadership of their country has played a major role in guiding exports higher, in Pakistan the country’s leaders have been preoccupied with everything other than exports.

The chairman Trade Development Authority of Pakistan (TDAP) S.M. Munir said that he had informed the prime minister and high officials of the government regarding falling exports. “It has coincided with the world economy shrinking over the last three years. Importers in the Arab and European Union have also cut imports from Pakistan owing to turmoil in their over there.”

Another big issue is, some African countries are capturing the Asian market in Europe and the Arab world too, and are offering products much cheaper than Pakistan, he says.

“Apathy at the highest level has been compounded by a deep-seated anti-export bias in policies as well as attitudes,” said Munir.

Two areas where this apathy is demonstrated the most since 2013 is in the tax

‘ACCORDING TO DATA AVAILABLE WITH PROFIT, PAKISTAN HAS AN EXTREMELY LOW ‘EXPORT ORIENTATION’, WITH THE SIZE OF THE MERCHANDISE EXPORT SECTOR IN THE OVERALL ECONOMY DECLINING FROM AROUND 14 PER CENT OF GDP IN THE EARLY 2000S HAVING BEEN HALVED TO BARELY 7 PERCENT NOW’

regime in place (which views the export sector as a source of revenue generation for the government), and the overvalued exchange rate – which is cross-subsidizing imports at the expense of exports.

Unbelievably, since 2008, the PPP government as well as its PML-N successor has released virtually no funds to finance the country’s Strategic Trade Policy Framework, despite budgetary allocations each year.

There are four channels via which politics — domestic, regional as well as global — have undermined exports from Pakistan.

First, Pakistan has borne the brunt of the fallout from post-9/11 developments, with a diversion of foreign investment as well as export orders due to the perceived security situation within the country. At the same time, India has made consistent efforts in a variety of ways to throttle Pakistan’s economy, including through squeezing our exports and undermining the ‘Made in Pakistan’ brand.

The last two areas are both internal.

For the last couple of decades, the ‘capture’ of Pakistan’s trade policy framework by a segment of low value-added exports has been a significant factor in preventing diversifi-

‘This iNErTia Of ThE ECONOMiC Tsar – ThE ONE aNd ONlY ishaq dar, iN ThE faCE Of iT is raThEr iNExpliCablE bECausE ThE CurrENT aCCOuNT dEfiCiT bY NOw is YawNiNg wiTh EvErY passiNg daY, as ThE COuNTrY’s MuCh-TOuTEd fOrEigN ExChaNgE rEsErvEs arE alsO shOwiNg a MarkEd dOwNward TrajECTOrY’ cation of exportable products as well as expansion markets. This situation has compounded over the past decade or so, by a shift in the ‘centre of gravity’ within the PML-N from its erstwhile constituency of manufacturers to traders and real estate developers. Hence, the slow and anemic response of the then prime minister to the exports crisis, another economist held forth.

steep rise in power, gas tariffs hurts hen contacted, the senior vice-president of All Pakistan Textile Mills Association (APTMA) Zahid Mazhar said, the continuous energy crisis in Pakistan since 2008 has also hurt the export sector.

“Even more

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than the availability of energy, what has especially hurt exports has been the steep increase in gas and power tariffs over this period – pricing our exports out of the international markets.”

The government, he said, is providing electricity to the industries at Rs11 per unit, while the same unit is priced in India and Bangladesh at Rs7 per unit. Similarly, the prices of gas is almost double at $800 per mmbtu in Pakistan for the industries compared to $400/mmbtu in India and Bangladesh. The minimum wages here is well above Rs14000, while India and Bangladesh are still paying Rs 7000-8,000 to their unskilled workers.

Moreover, Punjab and Sindh are still facing both power and gas shortages. After some rumpus created by the industrialists, the government provided some degree of relief by importing LNG in the last fiscal, but even so it failed to provide cheap gas and electricity.

“TDAP is doing nothing for the exporters but spending billions of dollars for its promotions.

ECONOMY

Barring a few exceptions, Pakistan fares poorly with regard to productivity, especially in comparison to many of its regional competitors. However, the generalized description usually proffered about Pakistan’s private sector as ‘rent seekers’ and lacking in effort or innovation is far from the truth in many cases, and is a subject I will deal with separately,” said Mazhar.

One Karachi industrialist, former president KCCI Zubair Motiwalla said: to arrest decline and reverse course in the short run, the government should undo all of its antiexports taxation measures of the last four years, as well as release all blocked tax refunds and duty drawbacks of the export sector.

“The export sector should be given additional relief in the form of lowest possible electricity tariffs. The exchange rate should be made competitive over a period of time.

Pakistan should also renegotiate its free trade agreement with China which has surprisingly not provided the same level playing field to a strategic partner as to the other Asian countries,” Motiwala said.

The prime minister should make a high-powered commission or strategic group to provide a vision and framework for the country’s export sector for the next 30 years and should also oversee implementation, he suggested.

This commission or group should also study and provide recommendations on how to restructure the trade regime to make it more export-friendly, as well as how to reduce the cost of doing business in the country. In this regard, an ongoing ‘strategic dialogue’ between policymakers and the private sector needs to be fostered further.

In last four years, the country exports had declined by 17.21 per cent from $25.110 billion in 2013-14. During the period, the federal finance ministry announced several exports’ incentives, but none of

‘This siTuaTiON has COMpOuNdEd OvEr ThE pasT dECadE Or sO, bY a shifT iN ThE ‘CENTrE Of graviTY’ wiThiN ThE pML-N frOM iTs ErsTwhiLE CONsTiTuENCY Of MaNufaCTurErs TO TradErs aNd rEaL EsTaTE dEvELOpErs. hENCE, ThE sLOw aNd aNEMiC rEspONsE Of ThE ThEN priME MiNisTEr TO ThE ExpOrTs Crisis’ them was implemented – including the January 2017 Rs180 billion package for the textile industry.

The federal government has set a target of $35 billion till 2018, but the analysts and exporters are unified in claiming that given the circumstances it is unachievable.

government support, too li‫מּ‬le too late n the recently announced budget for 2017-18, the finance ministry has announced monthly Rs2 billion package for textile industry instead of Rs 180 billion – needless to say, grossly insufficient, when above Rs200 billion of the exporters are stuck with the government in rebate and export refunds, said Mazhar.

Pakistan’s main exports are in five sectors, these contributing around half of the total, especially to the European Union (EU) countries, the United States and other nations.

On month-on-month basis, the country’s exports increased by 17.52 per cent and stood at $1.912 billion in June 2017 compared to $1.627 billion in May 2017, PBS data revealed. However, year-on -year basis, the exports declined by 16.16 per cent in June 2017 compared to $1.646 billion in June 2016.

Meanwhile, the country’s total imports surged by 18.67 percent to $53.026 billion

i

‘TwO arEas whErE This apaThY is dEMONsTraTEd ThE MOsT siNCE 2013 is iN ThE Tax rEgiME iN pLaCE (whiCh viEws ThE ExpOrT sECTOr as a sOurCE Of rEvENuE gENEraTiON fOr ThE gOvErNMENT), aNd ThE OvErvaLuEd ExChaNgE raTE – whiCh is CrOss-subsidiziNg iMpOrTs aT ThE ExpENsE Of ExpOrTs’ 30

during July-June 2016-17 from $44.685 billion in the same period last year.

On year-on-year basis, imports surged by 2.16 percent to $4.534 billion in June 2017 while it was at $4.438 billion in June 2016. On month on month basis, the imports of the country decreased by 10.96 percent to $4.534 billion in June 2017 compared $5.029 billion in May 2017.

The trade deficit in July-June 2016-17 enhanced by 36.32 percent to $32.578 billion from $23.898 billion in the same period last year. In June 2017, trade deficit declined by 24.33 per cent on MoM basis due to increasing exports and declining imports, while on year on year, it decreased by 6.09 per cent.

According to the market experts, major export oriented sectors should only be imposed minimum tax of 5 per cent to facilitate country’s export industry and this decision of the government would support textile industry and its trade bodies. There is being hoped that the textile export will increase to $11 billion in 2017-18, they added.

Stagnant for long, government can help boost if it seriously implemented business plan as proposed by the textile industry and other export oriented sectors.

The federal finance minister Ishaq Dar claims that the import increased only because of the textile and other machinery for the China Pakistan Economic Corridor (CPEC). That may explain the imports going through the roof, but by no means is it an explanation for the persistent fall in exports. Instead of tame and insipid explanations that fool no one, it was about time Dar took the issue of diminishing exports over a four-year cycle with the seriousness it deserves. Otherwise the foreign exchange reserves, which he has made us borrow at usurious rates, in order to look pretty would dwindle back to 2013 levels, taking him down the tube with it. That is, if he is already not there or thereabouts.

ECONOMY

The young man has not just made sig in raising the level of his family bu nificant contribution siness but also fought with a fatal affliction with grit an d aplomb By: Usman Hanif he decorations in his room contain awards, pictures taken with dignitaries recognizing him, souvenirs and sculptures of Hindu gods and goddesses. Designed in the fashion of a CEO’s office, the person behind the desk though is childlike features – perhaps owing to his ail-

INSIGHT

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ment, thalassemia. This was Jatindar Kumar, known among his social circle Jatin Kewlani.

Every year International Organization of Standardization (ISO) Certified KK Group exports 200,000 tons of rice. Before Jatin, its Director Promotions, joined the company, it was exporting exactly half of that. This twofold in-

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crease catapulted the KK Group to third spot nationally amongst rice exporters in 2015-16, winning it the president of Pakistan’s award for prominent exporters.

Representing his company, Jatin has been to 20 countries for exhibitions. Travelling and working on his fitness in a gym are his favourite pastimes.

As we sat down for our little chat for Profit, one was uncomfortable – as one was bound to be, interviewing someone whose life-expectancy, one perceived, was not very long.

Not a disease, but a life condition atin though was unfazed. “Thalassemia is not a disease. It’s a life condition… much like diabetes or blood pressure. Like those conditions, those suffering from thalassemia stay on drugs for life, with the addition of blood transfusion.”

To Jatin, blood transfusion is the same as change of lubricant in a vehicle once in a while. And medicine is like fuel that one has to top up with one’s tank every day. “If you take appropriate care with regularity, life goes on”, said he, with a maturity that not just belied his years but also reflected an attitude most admirable that spelt it out for you: Life has to be lived as normally as possible, regardless of the hand fate has dealt you.

At 16, a dropout after the sixth grade, Jatin joined the family business in 2005, looking after export documentation – at a salary of Rs10,000 per month, with his job description reading, assisting managers in the company.

Jatin is all praise for his father’s deci-

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sion, which only provided a spur to his own dedication. “To garner success, you ought to be humble.”

In 2010, he was sent to the Gulf Food Exhibition. He must have done well, as from then onwards his father asked him to represent the company in all foreign exhibitions. Jatin has attended exhibitions in more than 20 countries including Anuga Food Fair in Germany, SIAL Food Fair in Paris and The Rice Traders conference in Hong Kong, Thailand and China.

“Owing to my childlike features, people are surprised at see me in those exhibitions,” says Jatin, who 5’2” height also makes him look far younger than he actually is. He has turned this drawback into an

‘TO JATIN, BLOOD TRANSFUSION IS THE SAME AS CHANGE OF LUBRICANT IN A VEHICLE ONCE IN A WHILE. AND MEDICINE IS LIKE FUEL THAT ONE HAS TO TOP UP WITH ONE’S TANK EVERY DAY. “IF YOU TAKE APPROPRIATE CARE WITH REGULARITY, LIFE GOES ON”, SAID HE, WITH A MATURITY THAT NOT JUST BELIED HIS YEARS BUT ALSO REFLECTED AN ATTITUDE MOST ADMIRABLE THAT SPELT IT OUT FOR YOU: LIFE HAS TO BE LIVED AS NORMALLY AS POSSIBLE, REGARDLESS OF THE HAND FATE HAS DEALT YOU’ 32

advantage. “I am kind of unique in these exhibitions… so people don’t forget me, and this has helped my company corner some buyers.”

Rags to riches he CEO of KK Group, and his father, Chela Ram Kewlani came to Karachi in the early 1990s with only Rs10,000 that he had borrowed, starting up dealing in dates, before starting up with exporting rice.

When Jatin was asked about hurdles his father had faced for belonging to a minority, Jatin says, if you have a clean heart, the differences fade away. “My best friends are Muslim, and I like spending the better part of my quality time with them.”

Jatin has three brothers and a sister, all of whom live with an extended joint family of 33. At night, they dine on one table in two shifts, “as our table is not that much large to accommodate everyone at the same time.”

Jatin spends Rs200,000 every month for blood transfusion and other medical expenditure as part of his company’s Corporate Social Responsibility (CSR) activities.

Jatin’s ambition: “To take my company up the corporate ladder so that it could make a greater contribution towards CSR.” His other business objectives include, his company becoming the number one rice ex-

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porter from Pakistan and to turn it into a multinational.

“In Europe I have met an 80-year old grandmother suffering from thalassemia.

So, if a patient in Pakistan could somehow land a good consultant and is administered appropriate medicine, he may live far longer,” said Jatin.

From blood transfusion to iron releasing tablets, the process requires Rs15,000 to Rs20,000 to manage the life of a thalassemic, and the government is only able to support 25 percent of total number of patients, increasing dependence on funds from Baitulmaal and other charities, said hematologist Dr Saqib Ansari.

The price of one pill that cost Rs230 has recently been jacked up by pharmaceutical companies by Rs50 a pop, adding on the financial burden on patients. As a consequence, the NGOs resort to smuggled stuff, but since this mode involves exposure to heat and sun, the efficacy of the medication is far diminished.

Non-affordability the biggest bugbear ow income thalassemia patients who get blood transfusion through NGOs still have to spend Rs15,000 to Rs20,000 apiece each month.

And ‘Non-affordability’ is the biggest bugbear of thalassemia patients. After blood transfusion, iron has to discharge with the help of medicine; otherwise, it accumulates in vital organs such as heart, lungs and pancreas. And this iron overload can be fatal.

Thalassemia patients are also prone to receive diseases like hepatitis and HIV Aids due to ineffective blood screening.

Jatin realizes the situation for the poor is dire, so he has he has pitched in with a

l

‘THe dAy you Feel dISHeArTeNed ANd GIve IN, eveN A NoN-FATAl dISeASe could kIll you.’

Jatin Kumar Kewlani programme supporting 50 children.

According to the Thalassemia Federation of Pakistan, based on the last census, 10 million children have been diagnosed with thalassemia minor while 100,000 have been diagnosed with thalassemia major – in percentage terms, this is seven percent of the population. It means that nearly half a million infants every year are born with thalassemia major.

This data only counts cases in cities, as thalassemia experts don’t have means to ascertain the number of cases in hinterland.

In cities children with thalassemia major have life expectancy of 15 to 25 years while in the boondocks it is reduced 10 years or thereabouts, said hematologist Dr Saqib Ansari who’s been running Omair Sana Foundation for thalassemia children for the last several years.

Resuming his studies, Jatin has just done away with his matriculation. Until he dropped out of sixth grade – his father pulling him out of school because he did not want to combat the incurable disease and be also cope with pressure of school and studies simultaneously – he was always top of the class.

"I recall teachers making several phone calls to my home, asking as to why why a top student had dropped out,” Jatin says.

‘AccordING To THe THAlASSemIA FederATIoN oF PAkISTAN, bASed oN THe lAST ceNSuS, 10 mIllIoN cHIldreN HAve beeN dIAGNoSed wITH THAlASSemIA mINor wHIle 100,000 HAve beeN dIAGNoSed wITH THAlASSemIA mAjor – IN PerceNTAGe TermS, THIS IS SeveN PerceNT oF THe PoPulATIoN. IT meANS THAT NeArly HAlF A mIllIoN INFANTS every yeAr Are borN wITH THAlASSemIA mAjor’

More than his academic pursuits, to him, his travels abroad have contributed a lot to his learning curve. “If someone asks me about my academic qualifications, I make light of it, saying that I have done a PhD in thalassemia. People tend to believe me as I am able to answer every question related to the affliction. But the subsequent remark often is, being so young how could have I done my doctorate,” said Jetin.

Having attended seminars on thalassemia in developing countries, Jatin is flabbergasted when he goes to one in this country. “Once in a seminar organized by the Thalassemia Federation of Pakistan, a Sindh health minister, no less, had only this little piece of wisdom to contribute: ‘... it is a fatal disease and that the afflicted children need blood transfusion.’

Unfazed, Jatin runs his own thalassemia support programme, and his efforts have found recognition through many awards, including the Youth Achiever Award.

While Jatin is definitely an inspiring story, the darker side from a national point of view is that only 5 to 10 percent of children suffering from thalassemia in Pakistan survive beyond the age of 30. The government and society should come ahead to help and encourage patients and make measurement to prevent this grave disease.

For his part though, Jatin doesn’t consider thalassemia a disease; full of bravado, he says: "The day you feel disheartened and give in, even a non-fatal disease could kill you." n

INSIGHT

OPINION

Aqeel Shigri

Technology Vs Crime The recent news of registration of the devices through IMEI number has been a bane for the telecom operators and associated businesses as it further regulates a business under government spotlight for many reasons echnology has dramatically changed how we connect and socialize today. The associated communication revolution like communication mobility and social media revolution has impacted the way we think and set priorities. In Pakistan, the growth of mobile phones and internet has been phenomenal but somewhat bewildering in the sense that regulating communication has lagged behind technological growth.

The recent news of registration of the devices through IMEI number has been a bane for the telecom operators and associated businesses as it further regulates a business under government spotlight for many reasons. It's a good initiative but reasonably late since our markets have now flooded with mobile devices sans regulations. It would take a while before the new regulation takes root and begins to earn tax revenues and contain illegal movement of devices – the latter being a facilitating tool for the terrorists. More focus is required to influence and contain terrorist activities that continue to wreak havoc on innocent lives and economy of the country.

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Aqeel Shigri is an expert in Corporate Communications & PR and has vast experience in IT & Telecom industry and can be reached at: Aqeelshigri@gmail.com

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The IMEI (The International Mobile Equipment Identity) is a unique number, to identify mobile phones, as well as some satellite phones and can be used for stopping a stolen phone from accessing that network. However it falls short in case of smuggled and snatched handsets sets available in Pakistan.

The key is in evolving a database of such devices that can help track those being used for illegal activities. In developed parts of the world like Europe and the United States, their research on relationship of crime and technology has resulted in mature and secure systems especially for cellular

‘PTA NEW REGULATION DRAFT (AVAILABLE ON THEIR WEBSITE) IS WELL RESEARCHED AND COVERS EXHAUSTIVE POSSIBILITIES AND SCENARIOS BUT NEEDS AGGRESSIVE AWARENESS CAMPAIGNS. MOST OF THE CONSUMERS DON’T KNOW ABOUT THE IMPLICATIONS OF IMPLEMENTING THE NEW POLICY’

phones and internet access. The foundation was developing strong databases of each and every living person in their territory.

For starters, instead of blocking all the unregistered devices immediately, first such devices should be located investigated and registered. That would lead to a filtered and authentic database.

PTA new regulation draft (available on their website) is well researched and covers exhaustive possibilities and scenarios but needs aggressive awareness campaigns. Most of the consumers don’t know about the implications of implementing the new policy.

The question is when and how will it evolve into an effective policy?

Will it be a smooth process for millions of customers and without a negative experience? We believe it all depends upon the process, the cooperation of MNOs, ISPs and majorly consumers, who aspire for a safe and secure country.

TECH

AGRI

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F

By: Hassaan Ahmed

rustrated with persistent decrease in the yield and productivity of his mango orchards, Malik Mazhar Hussain had some years ago started leasing them out. Some three years back he decided to start looking after the orchards himself when some experts from Nestle Pakistan approached him, convincing him to take full benefit of research by adopting the latest farming techniques in order to optimise productivity.

“I had developed these mango orchards some 15 years ago. But I was singularly unable to get the results for my effort, despite putting in hard work and considerable investment. I was so dejected that I gave my land on lease – until Nestle Pakistan intervened and offered appropriate guidance,” said Mazhar, ensconced in his Jutt Sandhela Fruit Farm some 15 kilometres from Multan city on Muzaffargarh-Multan highway.

Talking to Profit, Mazhar said that at first he applied just one technique as a test of proficiency of the advice offered. The consequence was 10 to 15 percent increase in the yield.

Since this looked promising, the next season , I went the whole hog in implementing the advice of Nestle experts.

The upshot is, Mazhar says, that his income that season crossed Rs8 million – almost double to what he used to make previously from his 23-acre orchard. All this transpired owing to adhering to the best farm practices.

Initiated in 2014, the Nestle had envisaged it as a public-private partnership in collaboration with the Multan-based Mango Research Institute (MRI) in a bid to acquaint the mango growers of the Southern Punjab with the best farm practices.

“The Southern Punjab is known for its mango production, with Chaunsa by far the preferred variety for it produces the best quality pulp that would be helpful for our

‘ONLY TO ASSUAGE THEIR PRIDE AND IN ORDER TO SHOW-OFF, THE SOUTH PUNJAB FARMERS USED TO GROW TOO MANY MANGO VARIETIES. THE MRI EXHORTED THEM TO SHIFT THEIR FOCUS FROM THAT TO MAXIMISING FOREIGN EXCHANGE EARNINGS BY EMPHASIZING ON CULTIVATING FEWER BUT HIGH-QUALITY, HIGH-YIELD VARIETIES’ products especially Fruita Vitals,” said Ali Ashar Syed, Nestle Pakistan’s corporate manager external affairs.

“We have initially selected eight farms with 17 more to become part of this project within one month,” shared Ashar with Profit.

“To being with, the difficult part for us was to convince the farmers as they were not willing to forgo the ages-old cultivation techniques.

“The Team Nestle finally managed to break through the barriers, and now farmers by their hundreds are approaching us to acquaint them with the methods that we have introduced for they have already witness that it has worked for those who adopted these,” said Syed.

Qaiser Mehmood, the project manager of the initiative, divulged that the very first technique that the farmers were familiarised with was the importance of pruning. On how to trim the dead and diseased branches of the trees was demonstrated to them, along with acquainting them with its benefits – as it allows the sunlight to penetrate into the leaf canopy which is useful for the health of the tree.

“Yet another technique was the ring formation: one how different rings are made around the tree to save the stem from excessive watering. Still another was the importance of suitable timing with regard to spraying pesticide and insecticide etc,” he said.

According to Mazhar, the orchard owner, his field workers and tenants resisted

‘THE TEAM NESTLE FINALLY MANAGED TO BREAK THROUGH THE BARRIERS, AND NOW FARMERS BY THEIR HUNDREDS ARE APPROACHING US TO ACQUAINT THEM WITH THE METHODS THAT WE HAVE INTRODUCED FOR THEY HAVE ALREADY WITNESS THAT IT HAS WORKED FOR THOSE WHO ADOPTED THESE’ 36

in adopting these techniques, some even going to the extent of quitting the farm in protest.

But once convinced of the efficacy of modern methods, Mazhar overcame this obstacle, and now he is exporting his best quality mango to India.

Until now, Nestle itself does not benefit by procuring the pulp as the Small and Medium Enterprises Development Authority (SMEDA) – which fall under Ministry of Industry and Production – has monopoly over producing pulp.

To connect these Chaunsa farmers with different pulp units is also an objective of the Nestle Chaunsa Project.

The Chaunsa variety of mangoes will be exclusively used for Fruita Vitals while the traditional mango would be used for Nesfruta – a low-priced brand compared to Fruita Vitals, said Nestle’s Ashar Syed.

Talking to Profit, Dr Hameed-Ullah, director of MRI, said that there are hundreds of farmers in Multan and adjacent areas whose annual mango yield has increased manifold by simply applying the MRI’s research.

“The Nestle Pakistan gave us funds and confidence through its Chaunsa Project and we were always willing to facilitate the farmers in growing mango – the pride of South Punjab,” he said. The Pakistani soil is much better for mango production compared to India, as is evident from the fact that the average mango per hectare yield in India was 8 tons while Pakistan produced 10 tons. Pakistan’s share in world mango market is an admirable 6 percent.

“Until some years ago, only to assuage their pride and in order to show-off, the South Punjab farmers used to grow too many mango varieties. We exhorted them to shift their focus from that to maximising foreign exchange earnings by emphasizing on cultivating fewer but high-quality, high-yield varieties and now they are having better

returns,” said Dr Hameed.

As of the annual mango yield, Dr Hameed said, that the total production data keeps fluctuating, and is highly dependant on weather conditions. In the fiscal 2015-16, Pakistan exported 128,000 tonnes of mango last year, ringing in $68 million. During the ongoing year, the production of mango is being estimated to decrease by 600,000 tonnes due to harsh weather conditions.

Above 45 degrees Celsius temperature is hazardous as it severely causes injury to the fruit. This year, the sudden increase in temperature during the month of April was a severe setback as it seriously damaged the crop in the whole of South Punjab, he added.

The MRI, said Dr Hameed, imparts suitable information regarding the timing chain of fertilizers and sprays that can help farmers in getting maximum output by the end of the season. The MRI also provides SMS alert service to registered farmers to keep them updated with regard to the weather conditions.

“I recently visited China and according to my experience, China can emerge as our biggest mango export market. We may also organize some special mango-related events there keeping in view the ongoing ChinaPakistan Economic Corridor,” said he.

The visit to Nawabpur – about 15km

out of the Multan city – revealed that Nestle Pakistan is also trying to make small farmers a part of its value market for the . With only 8 acres, Imtiaz Hussain hardly used to make Rs0.5 million annually. Now he has quadrupled that to Rs2 million. Elaborating on what made the difference, Imtiaz said that he used to pluck the fruit following the traditional method and half of his mangoes were wasted in the procedure but then Nestle taught him a modern way of plucking. Imtiaz was carrying a long stick having a sharp blade and a net basket on the outer edge of the stick. He just touched the branch of the mango and it fell in the basket safely. “Another reason of my low yield was that I have been growing wheat and mango in the same orchard but then I was told by Nestle experts that it is extremely dangerous for both the products as water and sunlight requirements for each of them were entirely different,” he said.

Speaking to Profit, Waqar Ahmad, head of corporate affairs at Nestle Pakistan, said that it is not a time-bound project. It is just the beginning of a long-term commitment as the Nestle will keep on expanding its outreach to further buildup relations with farmers.

Through this project, Nestle is bridging the gap between Chaunsa mango farmers and pulp processing suppliers. “This project revolves around the best practices in Chaunsa mango farming, with the ultimate goal being making Chaunsa farmers an integral part of our pulp value chain,” said he.

Mango, called ‘the King of Fruits’ has more than 1,500 varieties but about two dozen are grown on commercial basis worldwide. This being Pakistan’s second largest fruit crop, it is exported to over 50 countries, earning millions of dollars in foreign exchange. n

‘AS OF THE ANNUAL MANGO YIELD, DR HAMEED SAID, THAT THE TOTAL PRODUCTION DATA KEEPS FLUCTUATING, AND IS HIGHLY DEPENDANT ON WEATHER CONDITIONS. IN THE FISCAL 2015-16, PAKISTAN EXPORTED 128,000 TONNES OF MANGO LAST YEAR, RINGING IN $68 MILLION’ AGRI

By Kimberly Weisul ver the past decade, 39,921 businesses have appeared on the Inc. 5000, Inc.'s ranking of America's fastest-growing private companies. On the list's 10th anniversary, we asked the founders of 25 (of the 142) remarkable companies that have earned a spot on the Inc. 500/5000 list 10 times or more to reveal how they've sustained and managed hypergrowth. What follows is a sampling of their sage advice. A hint: perpetual learning, discipline--and a giant dose of humility.

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On Running the Company Pinnacle Group "Don't waste your time bringing in multiple customers through the front door if you're going to lose them through the back door. Grow intelligently. Make sure you know everything about that customer, so you can use it as a case study. Then you're ready to absorb the next one and the next one."

LaSalle Network "There are only two ways to keep the revenue growth going. Either the founder or the CEO is a salesperson, or the person who is in charge of revenue needs to be extremely tight with the founder and glued to him or her at the hip."

Tom Gimbel Founder and CEO No. 4,449 2017 Inc. 5000 rank

Nina Vaca Founder, CEO, and chairperson No. 542 2017 Inc. 5000 rank LaSalle Network

STRATEGY

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Quantum Health

Pacific Dental Services

"You need to set some boundaries around growth. We didn't want any one client to be more than 20 percent of our business."

"If you're going to embark on a geographic expansion, do it with a large customer. Otherwise, you're just going somewhere flatfooted."

"Structure trumps strategy. Work super hard on the structure of whatever business you're in so you can scale that business. Your strategy will change over time, because the market is changing so fast. But if you get your structure right--your capital structure, your org structure, your processes structure, your IT structure--that will help you survive the changes in strategy that you will have to make."

Tom Villante Co-founder, CEO, and chairperson No. 2,541 2017 Inc. 5000 rank

Stephen Thorne Founder and CEO No. 4,072 2017 Inc. 5000 rank

Kara Trott Founder and CEO No. 4,445 2017 Inc. 5000 rank

YapStone

On Leading the People Billtrust

Quantum Health

"The people you hire for the executive team when you're 40 people are not the people you need when you're 400 people."

"I never take on any particular role just to have a job. I do it to learn, and to understand what's needed. I am always thinking, what's the easiest thing for me to cede to someone else?"

Flint Lane Founder and CEO No. 4,099 2017 Inc. 5000 rank

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Kara Trott Founder and CEO No. 4,445 2017 Inc. 5000 rank

Big ass solutions

Big ass solutions

"It helped that we didn't have any money. It keeps you lean and mean, and you pay a lot of attention."

"When we see somebody we like, I say, 'Holy cow. I don't care if we have a job for them or not.' We hire them."

Carey Smith Founder and CEO No. 3,096 2017 Inc. 5000 rank

Carey Smith Founder and CEO No. 3,096 2017 Inc. 5000 rank

Lasalle Network "When we have a bad culture fit, no matter how good the person is, we fire that person. I fired my top sales guy.

His ego grew too large and he abused relationships, and we fired him."

Pinnacle group "Focus on growing other people, not just yourself. Are you allowing the other people in your company to be entrepreneurs?"

Nina Vaca Founder, CEO, and chairperson No. 542 2017 Inc. 5000 rank

Tom Gimbel Founder and CEO No. 4,449 2017 Inc. 5000 rank

V-so Consulting group "I believe in continuous improvement for myself, not just for the company. I seek help from outside advisers. I'm part of a CEO roundtable."

Purna Veer Co-founder and president No. 2,929 2017 Inc. 5000 rank

strategy

On Managing the Money Billtrust

Loffler Companies

"Be careful what venture capitalists you partner with. It's like a marriage, and if you don't respect them and don't think they can add value, you shouldn't get married."

"What you're doing now is going to change. The things that are most profitable for you now aren't going to be your most profitable things in five or 10 years. So you always need to be investing out in front."

Flint Lane Founder and CEO No. 4,099 2017 Inc. 5000 rank

Quantum Health "You have to figure out your cash-flow rhythm. How soon after you invest in new business do you recover from your sales acquisition cost and your ramp-up cost? Whatever you think that number is, you should double it."

Kara Trott Founder and CEO No. 4,445 2017 Inc. 5000 rank

Torch Technologies "Find the best people you can and start delegating. Otherwise, you're going to die."

Bill Roark Co-founder and CEO No. 3,478 2017 Inc. 5000 rank

Hiller Plumbing, Heating, Cooling & Electrical "I don't like debt. Being debt-free is very comfortable. If it all went to crap one day, I don't have a whole lot of payments I have to make."

Jimmy Hiller Founder and CEO No. 4,314 2017 Inc. 5000 rank

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Jim Loffler Founder and CEO No. 4,576 2017 Inc. 5000 rank

Xifin "Pick your VC or private equity firms very carefully. Make sure they match philosophically and culturally what you're trying to accomplish. We were experts in our marketplace, so we didn't need help and advice on product.

We needed capital support more than anything else."

Lâle White Founder and CEO No. 3,817 2017 Inc. 5000 rank

Courtesy: www.inc.com

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