Paktel Project Paktel Limited (Paktel or the company) commenced operations in 1990 as one of two wireless telephony providers.  It is currently 98.86% owned by Millicom International Cellular (Millicom or MIC).  As of the end of 2005, Paktel had nearly one million subscribers for a 5% market share placing it as the fifth operator out of 6 players in the market.      The project focuses on the expansion of Paktels existing GSM 900/1800 operation in Pakistan through extending coverage and enhancing network capacity. MIC and Paktel will also spend increased resources on marketing and distribution to re-establish the Paktel brand and grow market share.  The company will invest in its network in order to improve network coverage as well as enhance the quality of service. By increasing the availability of telecommunications services in Pakistan, the project will:    - Expand access:     The project will increase the availability of reliable and affordable telecommunications services for consumers and businesses. As of December 2005, mobile penetration in Pakistan was approximately 14.6% (just over 21 million mobile subscribers) and fixed line penetration was approximately 3.0% (4.5 million fixed line subscribers).  This project will enable Paktel to upgrade technology, increase capacity, and improve coverage, which will allow more consumers and businesses to have access to reliable and affordable telecommunications services in a country with very low teledensity.    -  Extend geographic coverage:    Paktel plans to add new sites to its network as it builds out past the main cities in Pakistan thereby extending service to the frontier and border areas of Pakistan.      - Support telecom liberalization agenda:    As indicated by the telecommunications law passed in 1996 and the amendments and updates issued throughout 2003-2005 as well as the issuance of two new licenses to new entrants in 2004, the Government has committed to establishing best practices in telecommunications sector reform, including market liberalization in the mobile and fixed line sectors. The project will support private sector involvement and promote competition in the telecommunications sector which are goals of the Government.     - Product & Service Innovation:     Although Paktel is not the only mobile operator in Pakistan with foreign sponsors, its relationship with Millicom has resulted in several benefits including knowledge transfer for product and service innovation.  Paktel was the first operator in Pakistan to launch several services, including per second billing, and is looking to continue leading the market with innovative products and services best suited for Pakistan.  The project will enable Paktel to improve the quality and variety of services offered as its new GSM network will utilize SMS, GPRS and MMS services to enable multimedia and data applications.      - Demonstration Effect & Capital Mobilization:      As a result of past economic and political uncertainties, the climate for private sector investment in Pakistan has been challenging. The new governments efforts to improve macroeconomic management and public governance are encouraging, and an IFC investment at this time would show highly visible support for the administrations efforts to encourage private-sector investment. In addition, both the international and local commercial banks participating in the Paktel financing are looking to IFCs leadership role in providing financing to challenging emerging markets like Pakistan. This catalytical role is even more important with the proposed IFC B Loan.