Instapone Empire: Pakistan’s First Mobile Communication Service

The colossal role of telecommunication in accelerating socio-economic development and cultural evolution is globally recognized. Being a developing state, faced with enduring developmental challenges, Pakistan shrewdly realized the game-changer potential of cellular networks. The road to digitization and modernization was paved by the launch of Instaphone in a digitally backward ambience. If we have to name one categorical pioneer of Pakistan`s journey towards a thriving digital society, its Instaphone which crafted the contours of our digital future. Thus, Instaphone reserves the honour to kindle the cellular communications revolution in Pakistan by entering Pakistan`s cellular communication panorama in the 1990s. 

It spurred Pakistan`s telecommunication landscape towards a technological explosion and competitive trajectory. Now, Pakistan is a digital society, boasting 90 million diverse subscribers, approximately 47pc population. As the pioneer of the indigenous cellular communication industry, the successful branding and mainstreaming of Instaphone opened doors to other communication technology giants to launch their operations in Pakistan. Instaphone was the first cellular company to introduce Calling Party Pays (CPP) packages in Pakistan, rendering the officially launched Free Incoming Regime obsolete. The introduction of CPP had momentous ramifications upon the digital future of Pakistan, specifically pertaining to its impact upon the subscriber base. The subscriber base jumped from 306,493 to 742,606 in just one year, the calculated growth rate was 142%.

The resultant transition from relatively less sophisticated AMPS to TDMA paved the way to myriad digital avenues such as SMS, SMS Pulse, Web, Email services. Initially, the debut of this simple and sophisticated everyday use devise was perceived as a merely quiescent public utility. The public was also unaware of its multi-faceted implications upon the political, economic and cultural ambience of the country. 

Realizing the role of cellular networks in sustainable development, the government adopted more liberal policies to unleash the potential of the telecom sector. Government watchdog Pakistan Telecommunication Authority (PTA) regulates the cellular communication landscape, like other developing states. Despite being blamed for sluggish performance, questionable reliability, limited coverage and compromised quality of Instaphone performance, PTA also facilitated instance to thrive in local tech-laggard ambience. The deal between Instaphone`s owner Arfeen Group and Millicom was facilitated by PTA. 

The successful commercial operations of Instaphone in Pakistan cajoled foreign tech actors to invest in a thriving local tech market. This foreign investment and technological largess injected momentum in Pakistan`s cellular communications. Subsequently, Instaphone also underwent colossal rejuvenation under the shadow of this burgeoning foreign interest in the local telecommunication sector. Instaphone swung from Time Division Multiple Access (TDMA) approximately equal to Global System Mobile (GSM) or second-generation (2G) mobile technology to third-generation mobile technology (3G) or Code Division Multiple Access (CDMA). 

Now the question arises that which factors decisively launched Instaphone as a cellular communications goliath in Pakistan? The dearth of cellular communication technology concomitant with the tech-laggard public could have translated Instaphone story as a financial disaster. The game-changer factor was liberalization policies of government concomitant with rigorous advertising and marketing drive, utilizing all forms of mass media to cajole into adopting new cellular phone technology. It managed to persuade the targeted audience of all hues and colours owing to innovative omnichannel engagement. Particularly, electronic media platforms were saturated by innovative advertising campaigns featuring Instaphone as an emblem of the digital century. Instaphone`s official statement also acknowledged that Arfeen Group reserved a handsome budget for marketing and advertising it across all possible avenues. 

The astounding development potential of cellular communication can be gauged by a case study of Instaphone and its development footprint. Its mainstream use served as a critical change agent for not only economic sphere such as trade, commerce, business, industry but also in unexpectedly politics, education and culture. By breaking the communication barriers, it facilitated diffusion and dissemination of knowledge, modernization of the economy and liberalization of culture. Exchange of ideas, knowledge and information kindles innovation, a vital component of a knowledge-based economy. Thus, Instaphone induced digitization buttressed Pakistan`s quest to usher in knowledge and innovation-based economy. 

Despite the commendable initiatives of Instaphone, the momentum of its success was relatively slow. The reason for such disappointing commercial prospects resides in the demographic makeup of Pakistani society. Society, in general, is a tech-laggard, whereby the customer base of a meagre portion of tech-determinists prevented this novel tech initiative from bankruptcy in early decades. The lack of resources and education automatically engenders digital laggards who not only lack basic skills to use modern technologies but also disdain and discourage their use. There is another unexpected spoiler and that is the conservative culture of Pakistan, which is more prone to myth-making and superstitions. For instance, women, youth and children are mostly discouraged to use any tech product in an attempt to ruthlessly guard their modesty. 

It has been a general perception that sophisticated technological gadgets morally corrupt the masses or pose an existential threat to local culture. Unsurprisingly, the use of landline phones was also discouraged and subjected to rigorous intra-family discipline. Hence, the journey of Instaphone amid local customer base is a rocky one, marred by myriad ups and downs. It continued to struggle in the digital wilderness, attempting to break the local digital ice. Finally, its robust struggle bore fruit when it gradually garnered a substantial customer base concomitant with gradual cultural change whereby the use of cellular communications was no more taboo. It was Instaphone`s successful commercial operations that convinced other telecom entrepreneurs to enter the local market. 

 The sun started to eclipse across Instaphone Empire when other vibrant competitors started to reverberate the telecommunication market around 2006. As Warid, Mobilink, Jazz, Telenor and Ufone started gaining grounds, Instaphone started to substantially lose subscribers. Another decisive factor was that Instaphone attained primacy amid a non-competitive tech environment. The lack of presence of competitive rivals in the market led to sluggish internal organizational bureaucracy. The result was poor quality and less appetite for effective service delivery. 

Amid a painful twist of market dynamics, Pakistan`s first cellular company was reduced to a meagre customer base of 500,000, with 50pc customers residing in Karachi only. As the telecommunication landscape was undergoing a robust technological overhaul, the Milicom group was smart enough to relinquish its commitment to Instaphone. Millicom had entered Pakistan in the early 1990s. It had owned two cell phone operators — Paktel and Instaphone — with local telecom partners but it had offloaded its share of Instaphone to Arfeen Group.

Despite the reduction of royalty by the government for mobile operators, from 4% of the gross revenue to only 1.5%, Instaphone exhibited callous disregard and poor planning vis-à-vis licensing fees. Thus, Pakistan Telecommunication Authority (PTA) cancelled the license of Instaphone in January 2008, citing the country’s first cellular company’s failure to pay its outstanding dues. 

The subsequent irrelevance of Instaphone in Pakistan`s telecommunication panorama can be scrutinized by Maliha Khaqan and Kamran Siddiqi`s research titled “Brand Failure in Pakistan: Content Analytic Findings”. The authors of this research identified seven crucial factors that render even a highly popular brand empire obsolete after some time. These factors are: Brands often fail to recognize their power, dilute their brand equity by overextensions, ape the competing products, become overly optimistic in catering to the market single-handedly, try to deceive customers by focusing more on advertising while compromising on quality and forget to keep pace with rapid innovations and technology. Though the downfall of Instaphone cannot be attributed to all these factors but inadvertently, it sleepwalked towards few mistakes. 

Branding of product is more important in the contemporary entrepreneurial landscape by cultivating strong associations with market monopolies and relevant stakeholders. Furthermore, it’s very important for the government to own and protect the interests of emerging market titans. Pakistan falls short of cementing entrepreneurial friendly policies and frameworks owing to conflicting state interests and lack of synergy with the contemporary developmental model. 

To cultivate a favourable business ambience for telecommunication and entrepreneurial ventures; the government of Pakistan needs to take certain fundamental steps. The systematic study and research to gauge the success and failure of once-popular brands is dire need of the hour. Furthermore, to learn fruitful lessons from the rise and fall of Instaphone, it’s important for telecommunication and other novel tech ventures to learn important lessons from the Instaphone case study. The classic research-intensive work of Matt Haig titled “Brand Failures: The Truth about the 100 biggest branding mistakes of all Time” outlines a significant lesson for aspiring novel brands in Pakistan. He argues that the periodic shift in brand identity, partly influenced by changing ownership, tends to liquidate the interest of customers. Instaphone also exhibited fluctuating marketing strategy owing to changing ownerships. This liquidates the interest of the customer base over time. 

If Instaphone envisions re-launching and re-branding with renewed vigour, it’s important to chart its strategy upon the following factors: First, Refrain from Brand Amnesia that is fundamentally changing identity and outlook of a brand, in the wake of fluctuating ownership. This blunder diminishes the interest of the audience in a particular service. Second, to relinquish brand ego that is a colossal miscalculation that a single service could overwhelm all other competitors. This chimaera diminishes competitiveness and quality of service. Brand Deception is another colossal mistake that cajoles every entrepreneurial venture to forsake quality and merely focus on deceiving the audience via seductive advertising tactics. To cultivate a sustainable position in the entrepreneurial panorama of Pakistan, Instaphone should have relied upon a self-sufficient business model concomitant with avoiding the above-mentioned blunders.

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