Monday, 8 October, 2012

NAEEm ZAmINdAR

THE past twenty years havebeen an extraordinary timefor the development of in-formation and communica-tion technologies (ICTs) –

with the ‘mobile miracle’ we have broughtthe benefits of ICTs within reach of virtu-ally all the world’s people. It is now timeto make the next step, and to ensure thateveryone – wherever they live, and what-ever their circumstances – have access tothe benefits of broadband.

This is not just about delivering con-nectivity for connectivity’s sake, or evenabout giving people access to the un-doubted benefits of social communica-tions. It is about leveraging the power ofbroadband technologies, and especiallymobile technologies, to make the world abetter place.

Broadband has become a key priorityof the 21st Century, and I believe its trans-formative power as an enabler for eco-nomic and social growth makes it anessential tool for empowering people, cre-ating an environment that nurtures thetechnological and service innovation, andtriggering positive change in businessprocesses as well as in society as a whole.

Increased adoption and use of broad-band in the next decade and beyond willbe driven by the extent to which broad-band-supported services and applicationsare not only made available to, but are also

relevant and affordable for consumers.A broader view needs to be taken for

broadband proliferation and the Govern-ment’s long-term digital strategy needs tobe aligned with its economic objectives.The ITU and UNESCO Broadband Com-mission for Digital Development arestriving to meet the eight Millennium De-velopment Goals signed by all nations, in-cluding Pakistan, in 2000. TheBroadband Challenge and BroadbandTargets 2015 adopted by the BroadbandCommission for Digital Development inOctober 2011 consist of a set of four tar-gets for making broadband policy univer-sal and for boosting affordability andbroadband uptake:8 Target 1: Making broadband policy

universal. By 2015, all countriesshould have a national broadbandplan or strategy or include broad-band in their Universal Access/Ser-vice Definitions;

8 Target 2: Making broadband afford-able. By 2015, entry-level broadbandservices should be made affordablein developing countries through ad-equate regulation and market forces(for example, amount to less than5% of average monthly income);

8 Target 3: Connecting homes tobroadband. By 2015, 40% of house-holds in developing countries shouldhave Internet access;

8 Target 4: Getting people online. By2015, Internet user penetration

should reach 60% worldwide, 50%in developing countries and 15% inLeast Developed Countries (LDCs).Although the current growth is en-

couraging, is it enough for us to leap for-ward and compete with the rest of theworld? Technology and progress are re-currently linked together and in today’sday and age. Governments and busi-nesses want to measure the real growth,with transparency of results and visibilityto manage their operations.

Energy Crisis and How Communica-tion Networks Can Play a Role:

The electricity crisis in the countryhas been a thorn in the backside of notjust the existing government, but the pre-vious one as well. The current and theformer PM’s have also stated that elimi-nating the electricity short-fall is the toppriority for them. Having said that, theeasiest and most direct way of eliminat-ing the shortfall has been sought throughdeveloping new sources of power genera-tion, majority of which through IPP’s (In-dependent Power Producers).

Over the last 10 years, we have wit-nessed the mushrooming of new powerprojects that have renewed hope in thesystem and have given relief for a shortperiod of time. However, the power crisiscontinues to be a sore point for the Gov-ernment. However, it is time we reviewthe options for improving the efficiencyof our electricity supply and manage-ment. Are IPP’s the only viable way to ad-

dress the issue?In my opinion, they are partly the so-

lution. Thanks to advancement in tech-nology, and being implementedinternationally for improving electricitysupply and management.

The is bringing the electric utility in-dustry into the 21st century. In combina-tion with smart meters, the smart gridenables consumers to monitor their en-ergy usage. For utilities, it eliminateshouse-to-house meter reading, makespossible the remote connection and dis-connection of electric power, and sendsautomatic alerts when outages occur.

Through smart meters, the scourge ofelectricity theft can be eliminated with ease,as detection of theft is made simpler.Thesmart grid enables retail electric providersto offer time-of-use rates that differentiatepeak and off-peak consumption to encour-age electricity consumers to shift their con-sumption patterns accordingly.

Developing a communications net-work is critical to meet this goal. Themass of information accumulated bysmart meters is of no value unless it canbe transmitted reliably to the utility datacenter and processed. Hence, there is acritical need for an effective communica-tions network. Besides the above, the fol-lowing standards should be adhered to:8 A comprehensive coverage design

needs to be planned and two-waycommunication between the end-points (to cell relays [meter data col-

lectors] and intelligent grid switch-ing devices) are ensured.

8 Sufficient data throughput capacityto transmit 96 interval readings aday from each meter, and to executeall service orders generated.

8 Be reliable in all conditions, particu-larly storm conditions as Pakistan issusceptible to extreme weather con-ditions, especially during monsoons.

8 Be secure, adhering to strict cyber-security standards.

8 Be scalable to keep pace with ever-increasing amounts of data as moresmart meters and intelligent gridswitching devices are installed in theyears ahead.

8 Have adequate fail-over and redun-dancy to ensure backup in the eventof a component failure.Some people may call me a dreamer

and argue that this progress may onlyadd to the cost of delivering electricity. Ihowever, believe otherwise. The chal-lenge for Pakistan is not only to overcomeelectricity shortfall, but to better manageits delivery system. The above methodhas been adopted in developing countrieslike the US and need to be implementedin Pakistan to get real-time access and ac-curate control over power delivery.

These steps will go a long way in en-suring the results are transparent andwill help the Government in supportingpolicies for particular industries in orderto meet its macro economic targets.

Are smart grids the only solution to electricitycrisis? And how wimax can help?

SANJEEV SANYAL

After years of debate, India’s government re-cently announced that will open the country’sretail sector to foreign investment. The movewas met with howls of protest from those whoargue that the entry of large hypermarketchains like Carrefour and Walmart will devas-tate the small shops that currently dominateIndia’s retail sector. A country-wide strikecalled by opposition parties on September 20brought many cities and towns to a halt. Sofar, Prime Minister Manmohan Singh’s gov-ernment has not relented, despite the loss ofsupport from a key coalition ally.

The debate around opening the retail sec-tor to foreign investment is currently beingframed, on the one hand, by the need to mod-ernize supply chains and, on the other hand,by the desire to protect small shopkeepers’livelihoods. Those who support the decisionargue that India’s supply chains are simply toowasteful, and that only the finance andknowhow of big, international retail chainscan upgrade them. Opponents point to howbig retailers decimated the traditional retailsegment in the West.

But this debate misses a crucial point: thehypermarket model is itself under seriousthreat everywhere from online shopping. Con-sumers worldwide are finding that they canaccess virtually unlimited choice on the Inter-net – including customized goods and servicesthat big retailers simply cannot deliver.

As a result, large hypermarkets are sud-denly finding that their business model is un-raveling. They watched in horror as Amazon,en route to becoming the world’s largest on-line retailer, pushed the bookstore chain Bor-ders into bankruptcy, and have wondered ifthey will be next. The American discount re-tailer Walmart, reportedly concerned that it iscannibalizing its own sales, has gone so far asto stop selling Amazon’s Kindle tablets.

Indeed, the Indian government’s decisionto welcome foreign retailers coincided withFrench retailer Carrefour’s announcementthat it will shut down its substantial opera-tions in Singapore by the end of this year.Meanwhile, its British counterpart, Tesco, isshifting away from the large hypermarket for-mat and investing heavily in online systems.

Quite clearly, the established framework of re-tailing is being fundamentally overhauled.

Given these developments, India may sim-ply skip the hypermarket stage and go online,just as it skipped fixed-line telephony andwent mobile. Of course, hypermarkets will dowell in a few locations, but they are unlikelyever to dominate India’s retail sector.

For small shopkeepers, this poses both achallenge and an opportunity. The challengeis that the rise of online shopping will increasecompetitive pressure, regardless of whetherbig foreign retailers enter the market. WhileIndians have traditionally been wary of buyingonline, owing to their distrust of digital secu-rity, in recent years the urban middle class hasbecome increasingly accustomed to using theInternet to purchase airline tickets, reservehotel rooms, and order books. As rising afflu-ence and falling technology prices make on-line shopping accessible to a growing pool ofcustomers, more products will follow. Changeis inevitable.

But this shift may also open an opportu-nity for small shops. We know from interna-tional experience that online shoppingundermines hypermarkets more than neigh-borhood stores, which often offer home deliv-ery, credit, and the reassuring familiarity ofpersonal relationships. A local shop may beable to use the Internet to tailor more preciselyits selection of goods to its customers’ tastes.

In other words, small shops may be morethan capable of holding their own against bigretailers if they adapt to the new environment.Indeed, small shops’ advantages are so com-pelling that Tesco is investing heavily in ex-panding its network of convenience stores,Tesco Express, thereby effectively mimickingthe traditional model of local grocery stores.

So India’s political debate over the entryof foreign retailers into the market, whileheated, is probably already outdated. The realquestion is how India’s creaking supply chainswill respond when consumers leapfrog hyper-markets and go online. No other country hascreated a logistical network directly for onlineretailing. For investors and businesses – per-haps including India’s small shopkeepers –this is where the really interesting opportuni-ties will emerge.Courtesy Project Syndicate

Clicks over bricks in India

SAN FRANCISCO

AGENCIES

The organization, which in 2010 withheld its recommen-dation for the iPhone because of spotty reception whenthe gadget was held in a certain way, said laboratory testsconfirmed that the new iPhone 5 ranked among the bestsmartphones but its mapping function clearly fell short.

Apple’s latest iPhone, sporting a larger 4-inch screenand 4G capability, drew scathing reviews for glaring er-rors in a new, self-designed mapping service. Chief Ex-ecutive Tim Cook apologized last week and directed usersto rival services run by Google Inc and others. “Despitethe widespread criticism it has received, Apple’s newMaps app... is competent enough, even if it falls short ofwhat’s available for free on many other phones,” reviewerMike Gikas wrote on the group’s website on Friday.

“As Apple has recently apologizedand promised to fix these and othermap glitches, we expect the Mapapp to improve in time,” he wrote.Apple’s shares were down 1.3 per-cent at $658.43 in early afternoontrade on .

The consumer electronics jug-gernaut began selling its latestsmartphone last month. Sales ofover 5 million in its first threedays in stores fell short of out-sized expectations as it struggledwith supply constraints. Its home-grown Maps — stitched togetherby acquiring companies and em-ploying data from a range ofproviders including TomTom NVand Waze — was introduced withmuch fanfare in June by softwarechief Scott Forstall. It was billedas a highlight of the updated iOS6 software.

Errors and omissions quicklyemerged after the software wasrolled out. They ranged from mis-placed buildings and mislabeledcities to duplicate geographicalfeatures. Users also complainedthat the service lacked featuresthat made Google Maps so popular,

such as public transit directions and street-view pictures.The last time Apple faced such widespread criticism

— including from Consumer Reports— was during 2010’s “Antennagate”furor, when users complained ofsignal reception issues on thethen-new iPhone 4. This year theconsumer group, which reviewseverything from cars to kitchenappliances, also warned initiallythat Apple’s new threw off toomuch heat.

A defiant Steve Jobs at thetime rejected any suggestion theiPhone 4’s design was flawed, butoffered consumers free phonecases at a rare, 90-minute pressconference called to address thosecomplaints.

“Now that our auto expertshave completed their tests, includ-ing some carried out some daysafter the launch, they describe theapp as relatively streamlined, andconcluded that it generally pro-vides clear guidance, includingvoice and on-screen directions,”Gikas wrote.

“However, they did find that itlacks the details, traffic data, andcustomization options offered bythe free Google navigation app

found on Android phones.”

iPhone 5 gets thumbs-upfrom Consumer Reports

Consumer Reports, the influentialreviewers’ group that blasted theiPhone 4 for a faulty antenna, gaveApple Inc’s latest smartphone athumbs-up despite echoingwidespread complaints about itspatchy mapping service

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Wall St Week ahead

02

Monday, 8 October, 2012

Business

NEW YORK

AGENCIES

WALL Street may be bracing for a pull-back as U.S. earnings season beginsnext week – if the clouds of profitwarnings from bellwethers rangingfrom FedEx to Hewlett-Packard lead

to a downpour of lower profits – or even losses.Thanks to aggressive stimulus plans from central banks

around the world, the Standard & Poor’s 500 index gained5.8 percent over the third quarter. That sharp rally occurredeven as companies were struggling. Earnings for that periodare forecast to fall 2.4 percent from the year-ago quarter. Ifthat happens, this would be the first earnings decline inthree years, according to Thomson Reuters data.

Market strategists and investors say U.S. stock valu-ations are broadly out of sync with earnings estimates.They forecast a pullback in stocks in the coming weeks asmore companies report results and reduce expectationsfor the fourth quarter and beyond. Fourth-quarter esti-mates for S&P 500 companies show a 9.5 percent gain inprofit from a year ago, according to Thomson Reutersdata. Analysts say that outlook is too high, given what in-vestors are already hearing from the corporate world.

“It’s a divergence right now where the valuations asfar as equity prices (are concerned) have soared, and arereally putting in place a stronger economy and strongerfundamentals,” said Alan Lancz, president of Alan B.Lancz & Associates Inc., an investment advisory firm inToledo, Ohio. “But earnings will be the telltale sign,”Lancz added. “And if the guidance isn’t particularlystrong, the market might be setting itself up for a littledisappointment. I don’t see a major correction, but I dosee a pullback.”

The earnings season will kick off on Tuesday with re-sults from Dow component Alcoa (AA.N) after the bell.Analysts expect Alcoa’s third-quarter results to show itbroke even, down from a profit of 15 cents per share ayear earlier, according to Thomson Reuters I/B/E/S.BLAME EUROPE: Nearly half of S&P 500 companiesguiding lower for third- quarter earnings blamed weak-ness in Europe, according to a Thomson Reuters survey.Another 11 p e rcent blamed the weak global economy, 8percent cited strength in the U.S. dollar, and 6 percentcited the slowdown in China, the survey showed.

Weakness in the U.S. economy hasn’t helped. Thefinal read on U.S. second-quarter gross domestic productlast month showed growth of just 1.3 percent, weakerthan an expected 1.7 percent.

On Thursday, software maker Informatica Corp(INFA.O) issued a profit warning and said business con-ditions were worsening in Europe. The software companyis considered a bellwether because its products are usedalongside those made by larger software companies.TECH FEELS CHILL FROM CHINA: While estimateshave come down sharply in all 10 S&P 500 sectors sincethe start of the year, technology is one area where thelower expectations are most notable. Slower growth inChina is a big factor in that trend.

Earnings growth in the tech sector is expected to bejust 2.3 percent for the quarter, compared with a July 1forecast of 13.1 percent. Apple Inc (AAPL.O) is a big driverof those gains. Technology’s profit growth has been cru-cial for the S&P 500. Minus technology, S&P 500 earningsare expected to be down 3.4 percent. The tech sector iswhere the slowdown in China’s economy is having thebiggest impact, Kleintop said. “They consume a lot of U.S.technology products,” he said.

Recent data shows that the pace of growth in China,the world’s second-largest economy, may slow for a sev-enth quarter, straining earnings in the tech and materialssectors. Applied Materials Inc (AMAT.O) lowered itsthird-quarter estimates in August, citing China and Eu-rope. On Wednesday, the chip gear maker said it plannedto cut its global work force by 6 percent to 9 percent.

FedEx Corp (FDX.N), the world’s second-largestpackage delivery company, cut its fiscal 2013 forecast onSeptember 18, saying a weakening global economy givesits customers a reason to switch to less expensive andslower shipping options. FedEx said its earnings coulddrop as much as 6 percent for its fiscal 2013 year, whichwill end in May. On Wednesday, shares of Hewlett-Packard Co (HPQ.N) fell a whopping 13 percent to a nine-year low a fter it forecast a far steeper-than-expected dropin 2013 profit. The slide in HP’s stock price sharply cutthe Dow industrials’ gains for the day.

The S&P 500 sectors showing the biggest projectedearnings decline are materials, forecast down 24 percent,and energy, expected down 18.8 percent, ThomsonReuters data show, with those declines tied largely to theglobal slowdown.

Big-name profit warningsmay mean a pullback

PTCL celebrates 100,000Broadband DSL customers in Gujranwala

ISLAMABAD: Pakistan TelecommunicationCompany Limited (PTCL) Gujranwala Regionarranged special celebrations to mark the mile-stone of first 100,000 Broadband users in the re-gion. Mr. Walid Irshaid President & CEO PTCLand senior management specially travelled to Gu-jranwala to join and felicitate the regional teamswho have worked hard to achieve this milestone.To mark the occasion, a colorful ceremony washeld at PTCL Regional offices in Gujranwala.PTCL SEVP Commercial, Naveed Saeed; SEVPHR, Syed Mazhar Hussain; CTO Muhammad

Nasarullah; SEVP Business Zone Central, JamalAbdalla Al Suwaidi and other senior PTCL officialsalso attended the event.

Pakistan, Sri Lanka tradecrosses $400 million: envoy

KARACHI: Pakistan Sri Lanka trade has morethan doubled in the last few years to $400, but po-tential exists to take it much higher. This was saidby Sri Lankan Consul General D.W. Jinadasa at areception hosted by President Pakistan Sri LankaBusiness Forum Mr Tarek Moinuddin Khan in ho-nour of the 18-member delegation visitingKarachito participate in the 7th Expo Pakistan Exhibition.Mr Jinadasa said Sri Lanka was a growing marketwith great potential and invited Pakistani busi-nessmen to explore the opportunities presented bySri Lanka. He added the Sri Lankan people hadgreat regard for Pakistanis and considered themclose friends. The Sri Lankan diplomat said of latethere had been renewed interest shown by Pak-istani businessmen in tourism industry and realestate development.

Etihad Airways offers specialfares for Dubai from PakistanKARACHI: Etihad Airways, the National airlineof the United Arab Emirates, is offering an exclu-sive deal for travel to Dubai in both Pearl Business& Coral Economy Classes from Pakistan.In economy, customers can fly at an amazinglylow fare of Rs. 30,360/- from Karachi, Rs.47,070/- from Lahore and Rs. 46,070/- from Is-lamabad to Dubai. These special fares are avail-

able on tickets purchased till 31st October, 2012The airline is also offering the Etihad Express lux-ury coach service to its customers where they have2 stopovers, at Chelsea Towers on Sheikh ZayedRoad (in the heart of Dubai) and Dubai MarinaMall (perfect for Dubai Marina and Jumeirah).Travelers also avail the check-in facility wherethey can check-in 24 hours to 6 hours before theirflights.

Qatar Airways to open newEuropean Customer ContactCentre in Poland

WROCLAW– Qatar Airways customers contactingthe airline in key European markets will benefitfrom a new multi-lingual Customer Contact Centrebased in the Polish city of Wrocław from early nextyear. The announcement comes two months aheadof the airline’s new route to the Polish capital War-saw, set to begin from December 5 with four-flights-a-week direct from the carrier’s Doha hub. Theservicing of customer inquiries will progressively beexpanded to include E-Commerce support, PrivilegeClub member services and travel trade support forall major markets in Qatar Airways’ European net-work. Customers will be able to communicate withQatar Airways by phone, fax, and email. The Con-tact Centre is due to open in February 2013. Withan initial staffing of 100 employees, the new ContactCentre will utilise state-of-the-art technology, en-hancing the customer experience and connectingthe new location with the virtual Global ContactCentre network of Qatar Airways.

Speaking Chinese: IBA hostsbook launching ceremony

KARACHI: A successful book launch and cere-mony signing took place this evening at the Insti-tute of Business Administration (IBA Karachi)Main Campus for the book “Chinese Made Easy:100 Lessons in Spoken Chinese”. The author isHis Excellency Ambassador Syed Hasan Javedwho is presently the High Commissioner for Pak-istan in Singapore. The evening kicked-off withopening-sale and book signings by the author.The ceremony proceeded with opening remarksby Dr. Huma Baqai, Chairperson Social SciencesDepartment at IBA, highlighting the need to learna foreign language for gaining perspective andIBA’s role.

CORPORATE CORNER

KArAChI: Makhdum Amin Fahim, Federal Minister forCommerce, Pakistan at the Japan Pavilion with Mr. Tahirraza Naqvi, Chief Executive TDAP and Mr. MohammadIlyas, Director Japan External Trade Organization –JETrO during 7th Expo Pakistan 2012.

dANIEL GROS

The global energy community is abuzz withexcitement about hydraulic fracturing, or“fracking,” a newish technology that hasopened formerly inaccessible reserves of gastrapped in underground shale formations. Theboom in this so-called shale-gas productionhas allowed the United States to become al-most self-sufficient in natural gas.

Europe, by contrast, is clearly lagging. Ex-ploration is proceeding only hesitantly andshale-gas production has not even started,prompting many observers to lament that Eu-rope is about to miss the next energy revolu-tion. Should Europeans be worried?

Critics of Europe’s apparent lack of enthu-siasm for fracking miss two key points. First,Europe’s geology is different from that of Amer-ica. There is a huge difference between potentialdeposits hidden somewhere in large shale for-mations and recoverable reserves that can ac-tually be produced economically.

In fact, estimates by the International En-ergy Agency suggest that the most significant re-coverable reserves of shale gas are in the US andChina, not Europe. Moreover, even these esti-mates are really not much more than educatedguesses, because only in the US have shale for-mations been subject to intense exploration overa period of decades.

This process is starting in Europe only now.Poland appears to have Europe’s most favorablegeology, and it might become a significant pro-ducer on a local scale in about ten years. This isa fortunate coincidence, because shale-gas pro-duction would probably make it politically easierto phase out Poland’s economically and environ-mentally irrational subsidies to local coal pro-duction (and consumption). Fracking wouldalso be a strategic boon, because it would dimin-ish the country’s dependence on Russia for gas.

But pro-fracking critics of the EuropeanUnion miss a second point: the EU has no au-thority over the development of shale gas in Eu-rope. Licensing and regulation of explorationand production are decided at the national level.

One must admit, however, that in Europethe “Nimby” phenomenon (not in my backyard)is a much more serious obstacle than it is in theUS. While it might be true that Europeans are

too sensitive to environmental concerns, incen-tives also play a role. In particular, whereas own-ership rights over natural resources in the UStypically belong to the individual owner of theland under which the resources lie, in Europeownership belongs to the state.

As a result, Europeans, facing uncertain en-vironmental consequences while receiving noneof the revenues, tend to oppose fracking nearby.In the US, by contrast, local residents benefithandsomely from being able to sell their owner-ship rights to gas companies – a strong counter-balance to fears of environmental costs.

But private versus state ownership of naturalresources is not the only institutional factor un-derlying the US gas boom. A seldom-mentionedreason is that shale-gas development in the UShas benefited from important tax incentives – amodel that Europe has no reason to emulate. Gov-ernments certainly have a role to play in support-ing the development of new technologies, such asfracking; but, once the technology has been devel-oped, there is no reason why one form of gas pro-duction should be subsidized via tax breaks.

But the most crucial – and almost alwaysoverlooked – point about fracking is that shalegas, like all hydrocarbons, can be used onlyonce. The real issue is thus not whether shalegas should be developed in Europe, but whenit should be used: today or tomorrow.

Europe is already a heavy user of gas, but itsconsumption is stagnating (along with its econ-omy). Despite the hype about the shale-gas revolu-tion, the extraction cost of (onshore) conventionalgas remains below that of shale gas. Moreover, anexisting pipeline network implies that this conven-tional gas can be brought to Europe at a low mar-ginal cost. From an economic (and environmental)standpoint, fracking is thus unlikely to bring largebenefits for Europe: shale gas might simply substi-tute for plentiful conventional gas.

In an environment of ultra-low interestrates, the economic cost of being late is low. Thebest option for Europe might be to wait and letthe market operate. Fracking is not yet a maturetechnology, and thus it is very likely to improveover time. Maybe Europe will become a leaderin “advanced fracking” when the shale-gas de-posits in the US have already been exhausted.

Courtesy: Project Syndicate

KArAChI: The Consul General of the Federal republic of

Germany Dr.Tilo Klinner, and Mrs.Luba Klinner, hosted a

reception on the Occasion of the Day of German Unity

at their residence. Photo shows Chief Guest Speaker

Sindh Assembly, Nisar Khuro, Javed Iqbal CEO CMC, Mr

and Mre Javed Jabar,with host and other guests.

Should Europe be fracking?

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