Outsourcing is popular in Africa

Telkom Kenya, which operates fixed and mobile services under the Orange brand in the country, on Friday signed a 15 year outsourcing deal with Eaton Towers for the management of its passive network infrastructure.

The tower management and leasing deal is focused on both the maintenance of existing sites and the building of new sites. This will help reduce operating costs and capital expenditure, while improving network coverage and quality, as well as reducing Orange’s overall carbon footprint.

Telkom Kenya will retain ownership of its existing portfolio of over 1,000 towers while Eaton will invest in passive infrastructure upgrades and build new towers to provide Telkom with improved coverage and network quality.

The move is the latest in a series of similar deals for Orange in Africa, where sharing passive infrastructure is a key part of the strategy and similar deals have already been struck in Uganda, Cameroon and Côte d’Ivoire.

“We are confident that our agreement with Eaton Towers is a step in the right direction,” said Mickael Ghossein, CEO of Telkom Kenya. “The partnership will place us in a strong position to expand our network and develop innovative new services, in particular in rural areas, helping us achieve our ambition to provide the Kenyan population with excellent nation-wide coverage and relevant offers. Through this partnership, we will be able to reduce our operational costs and, at the same time, minimise the environmental impact of our network by reducing the use of diesel fuel.”

In related news, Pam-African wholesale carrier Liquid Telecom recently acquired Rwandatel, Rwanda’s fixed line network operator.

The deal includes Rwandatel’s copper and fibre network and its customer base but excludes most of the real estate the infrastructure is built on, which remains the property of Rwandatel.

Liquid’s Pan-African fibre network spans over 13,000km across Kenya, Uganda, Rwanda, Zambia, Zimbabwe, Botswana, DRC, Lesotho and South Africa.

Nic Rudnick, CEO of the Liquid Telecom Group, said: “Liquid Telecom is expanding rapidly and this is an important and strategic investment.  Rwanda is an outstanding FDI destination and we are very confident in the country’s economic future and growth prospects.”

This transaction comes four months after Liquid acquired the East African assets of the Altech Group including a controlling interest in Kenya Data Networks (KDN).

Telkom has written down the value of its assets by R12bn ($1.2bn) following a review by its board

South African operator Telkom has written down the value of its assets by R12bn ($1.2bn) following a review by its board. The operator said the decision to revalue it’s assets is important in enabling it to become competitive and efficient.

“We are committed to transforming Telkom’s financial performance,” said Sipho Maseko, group CEO at Telkom who took the over from former CEO Nombulelo Moholi in April of this year after leaving Vodacom, where he was COO. “This will require bold and decisive action. Tough and urgent decisions will have to be made, particularly regarding costs and the decommissioning of unprofitable services.”

Maseko added that the operator will accelerate the upgrade of its network in the medium term, and this will be essential for improvingservice delivery, efficiency and competitiveness.

The Telkom board explained that reasons it wrote down its assets, which included the extensive time period that shares have been trading at a lower value to its net asset value (NAV) and the fact that obsolescence of some of its legacy assets.

The migration of services from legacy assets to assets that are based on new technologies which will rapidly escalate over the next few years and further reduce the returns from some of the above noted legacy assets.

The impairment charge is a non-cash item and it will not impact the firm’s cash flow, said Telkom, adding that  after the impairment, the NAV per share is circa R34.

Asia will account for the majority of broadband subs by 2018

The number of broadband subscribers worldwide will increase by around 50 per cent over the next five years to reach 940 million by the end of 2018, with Asia-Pacific driving much of this growth according to new figures from UK research firm Point Topic.

This is lower than previous estimates from Point Topic, due to low fixed internet penetration in the developing world, although the one billion subscriber mark is expected to be reached (and exceeded) by the end of the decade.

By the end of 2018, South and East Asia is expected to have the greatest volume of broadband subscribers by some distance – around 340 million compared to the 150 million expected for Western Europe, the next-largest market.

Point Topic forecasts that Asia’s subscriber numbers will grow by 70 per cent over the next five years, due mainly to strong growth in Indonesia and Thailand.

Tunisiana believes it has found a way to entice users in emerging markets into increasing their reliance on mobile data services

The Tunisian subsidiary of Qatari operator group Ooredoo, Tunisiana, believes it has found a way to entice users in emerging markets into increasing their reliance on mobile data services. The operator said it saw the popularity of social networking site Facebook on fixed line networks in the country, and devised a tariff to cater to mobile users.

“The package is cheaper than the full mobile data package, but since so many people are using Facebook in Tunisia – it’s one of the most successful web services in the country – we decided to put together an entry level package,” explained Jalel Kamoun, BSS and VAS director at Tunisiana.

As wella s standard Facebook functionality, the Facebook Plus offering also allows users to view videos shared on the site from websites Youtube and Dailymotion. The operator also offers one day, one week and one month access for prepaid subscribers.

Kamoun added that when Tunisiana subscribers on the package try to log in into a web page other than Facebook, they are redirected to a landing page prompting them to upgrade to the full package.

“It’s a good entry point, because when subscribers get used to it, at a certain point they realise that they should upgrade,” Kamoun added.

“As an entry point, because when you move to 3G, there has to be a perception of value compared to what the competition offers. So instead of selling cheaper packages, why don’t you offer special packages that they don’t have? Make them the same price, and then slowly upgrade them to the higher plan.”

Zeinal Bava, CEO, Portugal Telecom

The CEO of Portuguese incumbent Portugal Telecom, which also holds 23.34 per cent of Brazilian player Oi, has voiced concern over Europe’s ability to continue to compete on the global telecoms stage if further consolidation among the operator community is not encouraged.

Speaking at a user group held by Portuguese business assurance specialist WeDo Technologies last week, Zeinal Bava said Europe should look to the US for a lesson. “Europe doesn’t like in-market consolidation and the US loves in-market consolidation,” he said. “And I think the US is right, because if you don’t have in-market consolidation, if you don’t look at the EU as one big market then, we will always lag behind the US.”

The European mobile sector has been damaged by operators’ “irrational behaviour” on pricing, partly driven by regulation on termination rates, he said. Termination rates in Europe came down too quickly for operators to be able to adjust their cost bases, he said, at the expense of margin and shareholder return.

“If you do something at the expense of your shareholder’s money. Guess what?” he said. “He’s not going to give you capital to invest in your network.”

With ARPU in some markets in Europe dropping to $15– 20 per month, Bava said, technology upgrades become difficult to justify. “The US is the only market where I think they have found the right business model because ARPU in mobile in the US is $50.”

Bava said that Portugal Telecom lacks the capital to lead any consolidation itself and, in any case, is focused on its Brazilian and African portfolios. But Europe faces serious challenges if operators cannot drive scale in the region, he said.

“European operators have to get together simply because we are competing against very large companies worldwide. Either we scale to compete or we get priced out of the market. Unfortunately Europe has taken the view that in-market consolidation has not been a priority and that means it will be very difficult for European operators to aspire to the kind of efficiency that a market like the US is developing now.”

Orange Tunisie and Tunisiana will deploy submarine cable connecting Tunisia to Europe

Two of Tunisia’s mobile operators have signed a deal with with backbone operator and cloud services provider Interoute for the deployment of a submarine cable connecting Tunisia to Europe.

Orange Tunisie and Tunisiana, which is 90 per cent owned by Qatari group Ooredoo, will deploy a private submarine cable, called Didon, which will cover nearly 170km. It will connect to the city of Kélibia, Tunisia to Interoute’s pan European fiber optic network, via its landing station in Mazara del Vallo, Siciliy, Italy.

The cable is planned to be in place by April 2014 and its capacity will begin at 100GBps at launch with an aim to reach 8Tbps, per operator. According to Interoute, the cable will act as a force for social development and economic growth for the country.

“The Didon cable will provide increased capacity and better service to the seven million consumers and businesses that rely on Tunisiana,” said Ken Campbell, CEO of Tunisiana. “This investment is also a testament to our belief in the potential for growth in Tunisia as a hub for the region.”

Didier Charvet, CEO of Orange Tunisie added: “This investment is also a proof that Orange Tunisie believes in the development of the ICT sector and e-services in Tunisia.”

The Broadband World Forum is taking place on the 22nd – 24th October 2013 at the RAI Exhibition and Convention Centre, Amsterdam. Click here to pre-register for the event.

The submarine cable brings more connectivity to Africa

The African continent became more connected this week as global telecoms network exchange Epsilon Telecommunications interconnected with both the SEACOM and West Africa Cable System (WACS), giving the company undersea cable connectivity that circumnavigates Africa.

Epsilon specialises in managed network services, and said it is seeing growth in Africa for its outsourced network service model. African carriers which need to connect abroad are using Epsilon to gain access to 170+ countries and similarly Tier 1 carriers who need a presence in smaller African markets can now use Epsilon to connect in the region.

With SEACOM connected, Epsilon can offer its customers network connectivity to Africa via the SEACOM undersea network as well as carrying African telecoms traffic globally. Customers of SEACOM in turn have access to Epsilon’s 450+ preconnected network operators around the world.

SEACOM’s undersea cable system directly connects South Africa and eastern Africa with Europe and southern Asia, covering a distance of over 17,000km.

The interconnection agreement with West Africa Cable System covers the west cost of the continent. The consortium-owned WACS undersea cable system spans 16,000km and has 15 landing stations from South Africa to the UK. The WACS consortium is made up of 11 international telecoms carriers.

Vivendi has revealed that it has received two binding offers for its 53 per cent stake in Moroccan operator Maroc Telecom

French conglomerate Vivendi has revealed that  it has received two binding offers for its 53 per cent stake in Moroccan operator Maroc Telecom.

Although the firm did not divulge who made the offers, UAE-based Etisalat and Qatari operator Ooredoo have both independently stated that they have made bids for the stake.

Vivendi said that it will examine the proposals during the coming weeks to determine which is in the best interests of both Vivendi and Maroc Telecom shareholders.

Etisalat said in a regulatory statement to the Abu Dhabi Securities Exchange, that its offer takes into consideration the outcomes of a due diligence exercise that the group recently completed. The offer will be binding until the end of the second business day following the approval of Etisalat extraordinary general meeting.

Qatar incumbent Ooredoo, formerly known as QTel, said that “certainty of funding has been arranged with a consortium of banks.” The operator added that further updates will be announced in due course.

Mobinil has called on two of transaction management software provider Openet’s solutions to help better monitor usage information and better engage with subscribers

Egyptian operator Mobinil has called on transaction management software provider Openet to help better monitor usage information and engage with subscribers.

Openet’s Policy Manager and Interaction Gateway deliver real-time usage information, and a channel for interaction with Mobinil’s subscriber base of 35 million.

Mobinil’s VP for technology Yasser Shaker said that it is important for the operator to maintain high levels of quality of service standards that have helped it to consolidate its position in the Egyptian market.

The operator has the second largest share of the Egyptian market, with 29.6 million subscribers as of December 2012, trailing only Vodafone Egyppt with its 38.7 million subscribers, according to Informa’s WCIS.

“We continue to invest in best-of-breed technology to ensure that we maintain these levels,” he said. “Providing transparency into usage and costs gives our customers control over expenses and increases their trust in us.”

Wilgon Berthold Tsibo, CTO, Equateur Telecom, Congo

Wilgon Berthold Tsibo, CTO, Equateur Telecom, Congo is speaking at the LTE Operator Strategies track on Day One of the LTE Africa 2013 conference, taking place on the 9th-10th July 2013 in Cape Town, South Africa. Ahead of the conference we speak to him about the particular challenges Africa is facing as local telcos look for roll-out LTE.

Please give me an overview of Equateur Telecom and tell me more about your customers and the wider MNO market in the Congo.

Congo is a country of four million inhabitants and there are more than 3.8 million mobile phone users; a penetration rate of 95 per cent. The MNO market Congo is composed of four operators : MTN Congo, Airtel Congo, Warid Congo & Equateur Telecom Congo (ETC),  known under the trade name of Azur-Congo. MTN and Airtel enjoy the largest market share (41 per cent and 40 per cent respectively) due to the length of time they have been established in the country – nearly 15 years. Warid, with six years market presence has 11 per cent market share, and finally Azur Congo (ETC) holds eight per cent of the market after three years.

ETC is the fourth mobile operator in Congo Brazzaville and launched in 2010 in two main towns of the country – Brazzaville and Pointe-Noire. ETC has a commercial 2G license at 900 and 1800MHz frequencies and currently ETC is engaged in a deployment to achieve nationwide GSM coverage by the end 2014. We also offers EDGE services.

The customer base is mostly composed of young people, ages between 16 and 29 years old who are addicted to new technologies.

What are the biggest challenges to rolling out LTE in the Congo and the wider continent?

Most of Congo’s networks are 2G networks with some 2.5G services. One operator has started 3.75G services, but success has been limited. The biggest challenges to an LTE roll-out in the Congo will be mastering the equipment swap from 2.5G to 4G. After the swap, the second challenge will be obtaining terminals that are compatible with LTE, in order to make the product accessible to the whole population.

The LTE Africa conference is taking place on the 9^th-10^th July 2013 in Cape Town, South Africa. Click here to download the brochure for the event.

Will LTE act as a fixed-line replacement in Greenfield areas in Africa?

LTE won’t be a fixed-line replacement in Greenfield areas in Africa, but LTE is coming to reinforce the capacity and the diversity of services in Greenfield areas. LTE and fixed-line will keep walking together for a long time, because the availability of terminals constitutes a brake on the African LTE market boom.

What are the challenges around moving from WiMAX?

The challenges around moving from WiMAX to LTE are first and foremost adapting infrastructure to the Long Term Evolution technology and also ensuring the compatibility of terminals for the use of LTE services. Though they are close technologies in terms of development, the major challenges remain terminal availability.

FDD or TD-LTE – what is your technology preference and why?

Our preferred technology is Frequency Division Duplexing (FDD)-LTE because FDD is very good in situations where the uplink and downlink data transmissions are symmetrical (which is not usually the case when using wireless phones). More importantly, when using FDD, the interference between neighbouring Radio Base Stations (RBSs) is lower than when using TDD. Also, the spectral efficiency (which is a function of how well a given spectrum is used by certain access technology) of FDD is greater than TDD.

Are you considering network sharing agreements to lower costs and what are the regulatory issues surrounding this?

The strategy of sharing infrastructure is good as it reduces both CAPEX and OPEX. It reduces CAPEX for new operators entering into the business, because it does not have to raise large amounts of capital for its roll-out and it enables it to cover a large amount of territory through building sharing agreements. In return, the new operator will significantly reduce the OPEX of the site owner (fuel, electricity, maintenance, security, capacity) through its participation in the operational costs of the site. It will also enable the site owner to have a faster return on investment.

What particular challenges does Africa face in terms of backhaul provision?

The particular challenges are the availability of capacity at long distances from sites. Most operators use satellite links to serve remote areas but these links are very expensive and we cannot assure  quality during inclement weather. The emergence of different optical fibre platforms across Africa may be a solution.

How do small cells fit into your strategy?

In our strategy, small cells are a vital for 3G data off-loading, and we will also find also small cells vital for managing LTE Advanced spectrum more efficiently compared to using just macro-cells. The current cell architectures cannot support the exponential growth in demand for data transfer over the long term. The new radical concept of small cell networks can provide a viable solution economically and ecologically.

Kai U. Wulff, access field development director, Google

Kai U. Wulff, access field development director, Google is speaking on Day Two of the LTE Africa conference, taking place on 9th-10th July 2013 in Cape Town. Ahead of the show, we speak to him to find out more about his role, and why he is excited about Africa and its potential for growth.

In his keynote address at Mobile World Congress in 2012, Google’s Eric Schmidt declared that his company’s mission was to reach, “the next five billion”. Of the world’s population of seven billion, only two billion are online, presenting a huge opportunity.

One of the great Greenfield areas is, of course, Africa. According to Informa WBIS statistics only 4.27 per cent of households on the continent have fixed-line broadband internet access. While over 70 per cent have mobile phone coverage, this is almost exclusively basic feature phones – the seemingly near ubiquitous smartphone world of the US and Europe is an adventure that is only just about to start.

Clearly Google has a desire to help get the continent of Africa online as quickly and efficiently as possible and accelerating that process is the task of Kai U. Wulff, access field development director for Google, who is delivering a keynote address on Day Two of the LTE Africa conference, taking place on 9th-10th July 2013 in Cape Town.

Wulff says he is driven by Google’s famous mission statement, “to organise the world’s information.” “You can only do this if [people are] brought online,” he says. “The second part of our mission statement is to make information universally accessible, and it can’t be universal if it’s limited to sub-set of people.”

Google is not a charity of course, and it naturally has a vested interest in growing its market, which Wulff admits. “Of course, Google is an internet company, so why wouldn’t we want to promote anything that increases the usage of the internet, as that what makes our company.” However, Wulff insists that his role is not to promote Google but to promote internet access in general. “My focus is not to bring people online to use Google products. Whether they want to use our products or not, it is my job is to bring more people online and then give them a much better experience online.”

But is internet access really a priority for people who might have more pressing concerns that sharing something on Google+? Actually, Wulff is certain that internet access is crucial for improving the lifestyles of those in Africa. “In today’s world I could not live without the internet in my job, so how can we expect to help to develop a continent if we are depriving them from access to the biggest source of information? You can’t solve the problem of poverty without giving people an incentive to use the internet. It may be a different incentive to the way the people in the Western world have it – people use it for pure entertainment, or a way to spend their money. In Africa it’s about how it makes their lives better.”

He gives the simple example of a tomato seller who can go online to check the optimal prices that he can sell his produce for, without having to spend a large amount of time physically travelling to the market. “I think that’s a tangible improvement in lifestyle.”

Indeed he thinks that there are many in the West who might start to worry about competition from Africa once it really starts to get online.  “If we give them access to the internet and give them proper tools some people might start to worry about competition from those markets.”

For that to happen though Africa needs to have move online local presence. One of the things that concerns him is what he refers to as the ‘trade imbalance’ of content. “I’m a bean counter by trade, I’m not a techie. As a bean counter you learn that no market can be sustained if you have a constant trade imbalance. If you look at the internet and Africa then there’s a massive trade imbalance – 99 per cent of the usage is downstream. [That] can’t be healthy long term.”

It’s not just that imported content is not as relevant as local content he says, it’s also important for content to be stored and maintained locally. “It’s distorting the whole picture. It’s distorting the peering costs, the incentives that people have. I think it’s paramount that people put their content online and put it on the continent. This might be controversial because we have a lot of data centres in the US, but I think we have to create more local content in Africa and keep it there.”

Aside from simple coverage, one of the reasons that content sharing is not popular in Africa is cost. In the West, while we might complain about our data bundles we are used to being able to upload our pictures and videos without normally incurring large costs. But Wullf points out that in Africa every picture you might upload costs money and will compete with you being able to do something online that is important for the basic necessities of daily life. “That’s one of the reasons I’m doing what I’m doing,” he says. “To make usage easier, faster and hopefully cheaper.”

One of the key areas that Wulff is focussed is to try and promote network sharing agreements between telcos to make a more efficient use of infrastructure. Duplication of effort is, as he frankly puts it, “really stupid”. “[If] everybody has his own masts, his own backhaul, his own generator you’re tripling the cost to the market. Especially when you’re talking fibre deployments because one fibre deployment has [effectively] unlimited capacity and [instead] you have three fibre running out at a very high cost. It would be like everyone who has a supermarket building their own road network. It doesn’t really make sense.”

Aptly then what Wullf is working on is improving the lines of communication between telcos. “Before you run three fibre lines up a hill, think about it. Speak to each other,” he advises.

This cooperation could really reap benefits for everyone in the eco-system. “Only a very small portion of Africa is covered, so if we were to deploy the capital a little bit more efficiently across the continent then everybody wins – more users, more usage, more money for the operators at lower operation costs, and lower prices for the end users.”

With much work to be done in terms of bringing basic mobile coverage to Africa some might see LTE as a luxury, but Wulff thinks that LTE is actually a great fit. “It’s about cost-per-bit. It’s that simple. Cost-per-bit delivers. The first high capacity IP MPLS networks that Siemens ever deployed with state of the art technology was in Nairobi – it wasn’t in New York City or Berlin, it was in Nairobi. Why would somebody deploy technology that has a higher cost per bit with the argument that it’s ‘good enough’ for Africa? You always go for the tech that offers the lowest cost per bit.”

He does concede that it’s unlikely to make sense to bring LTE to rural areas, and that initially LTE will focus on the high revenue markets. However, it should enable Africa to essentially bypass the slow evolution of mobile networks that the West experienced as it moved from 2G, then 3G to 4G.

Putting a techie hat on for a moment, Wulff says that LTE ability to lower costs while maintaining quality is one of its key assists for Greenfield areas. “You can do air interface per device ,per end user, so you could theoretically have one LTE networks and five operators and they could sell five different offerings based on QoS, depending on how much they want to spend on their air interface. That’s pretty cool if you ask me. I’m not representing an operator, but I like LTE from that aspect.”

Ultimately, Wullf comes across as being very optimistic for the prospects in the region. He warns that African operators should be careful to tailor their offerings for their own market and not simply try and mimic what has worked elsewhere. “That’s [been] one of the problems in some of the deployments, where basically the business case is just a copy/paste of developed markets. And then people figure out that this was not a great idea. We need to depart from the idea that a five-year old version of a European business case will work in Africa. It’s something that needs to be very, very specific and then it can be truly rewarding for everybody.”

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France Telecom-Orange had signed a deal to allow pan-African tower operator IHS to manage over 2,000 towers across Côte d’Ivoire and Cameroon

Orange has signed a deal to allow pan-African tower operator IHS to manage more than 2,000 of its mobile network towers across Côte d’Ivoire and Cameroon for the next 15 years.

The towers will remain Orange’s property and the operator said that it chose IHS because the firm would bring specialist knowledge and skills to improve customer experience whilst reducing Orange’s cost base.

Available space on the towers will also be marketed to rival mobile operators through IHS’ tower sharing model, Orange confirmed.In return, Orange subsidiaries will gain access to available slots on towers that IHS currently owns in Cameroon and Côte d’Ivoire.

In October last year, in those same two markets, South African operator group MTN  announced it would sell 931 of its mobile network towers from its Ivory Coast operations to  IHS for $141m, as well as 827 towers from MTN Cameroon for $143m. Under the terms of the agreement, IHS set up two tower companies – one in each country – to manage the towers and other passive infrastructure.

Orange added that IHS’ focus on the passive infrastructure will accelerate network modernisation, and will mean it can increasingly rely on the use of renewable energy to power the network. IHS has committed to building hybrid solar and generator power sites in an attempt to cut diesel consumption at these sites by up to 70 per cent.

“Sharing passive infrastructure is a compelling opportunity for Orange to offer a better service to its customers in Africa and the Middle East through improved network coverage and reliability,” said Marc Rennard, executive director in charge of Africa, Middle East and Asia for the Orange Group.

“It also allows us to drive efficiencies, reduce costs and manage the particular conditions in emerging markets such as the cost of energy and accessibility of sites. This agreement leaves open the possibility for Orange subsidiaries elsewhere in Africa and the Middle East to look into similar partnerships.”

Issam Darwish, CEO and founder of IHS, also voiced his belief that placing tower infrastructure in the hands of mobile tower specialists benefits consumers, businesses, local economies as well as the operator. He said that the firm’s 12 years experience in the market and its relationships with operators and equipment suppliers allows it to bring improvements across the value chain.

“Through innovation and our engineering experience we are also able to bring environmental benefits to Côte d’Ivoire and Cameroon through a more efficient energy mix using solar power and the most up-to-date generator equipment,” added Darwish.

Ismail Patel, Informa Telecoms & Media

“I note there is a disproportionate emphasis on the quality of the networks being deployed, in comparison with the discussion on how they can actually be monetized. The regional apps and content market is far from mature and – away from the glitz of the large regional incumbents’ physical networks – there is a danger of a large number of operators becoming dumb pipes; fattening these pipes up with FTTH and LTE will not guarantee any significant increase in ROI.”

I made this statement 12 months ago, soon after Broadband MEA 2012. And how cruelly true has it turned out to be. Here are some of the main themes of this year’s conference summarised.

Return on NGA investments is a tough job no matter where you are

Assessing the opportunities and threats to broadband in the MEA region was put into the limelight at Broadband MEA 2013. There was no significant buzz surrounding LTE as there was 12 months ago. Nor was FTTH – which was the theme at the same occasion two years back– fondly looked at as the protector of broadband growth and ROI.

I noticed that, in the context of the Middle East specifically, as promising next-generation access deployments age into the distance of the past, discussions on the prospects and realities of broadband in the region become starker, more sober and more mature. The feeling was that operators with the latest NGAs in fixed and mobile have been subject to a fast-track reality check and are letting go of any lingering hopes of fast returns.

The consensus is on data being the savior of revenue, rather than NGAs per se

Broadband MEA 2013 came at a critical time when incumbents’ local markets are dwindling in traditional voice and SMS revenues. They are increasingly looking towards mobile data – not for maintaining growth, but just to break even and protect themselves from competition. There was a tacit realization that fattening the physical and wireless pipes via deploying NGA will barely assist operators. The best of FTTH speeds and 4G LTE are beyond the reach of most customers, and even those who can afford them do not simply adopt these tariffs. Nobody was heard boasting of 100Mbps, 200Mbps or 300Mbps over fiber (which has been deployed in the region). FTTH subscriptions are mainly in proportion to households that actually want the service, yet 80% are in the <20Mbps bracket.

In 4G mobile, the issue of spectrum fragmentation was revisited. The high entry-price barrier in 4G smartphones and their scarcity was touched upon and the issue of compatibility in the latest devices with current regional 4G operating frequencies was raised.

The challenges facing Q.NBN

Moving to a more specific case, an industry insider in Qatar who wished not to be named told me that he would be surprised if there is real competition over fiber in 12 months time. For all the talk of the government-appointed institution steering the two operators to real competition (which means customers are able to choose which operator they would want to take for fixed services), the fact that Ooredoo – no business cards yet – owns, operates and is still migrating its legacy copper network to fiber is proving to be a sticking point.

Getting an incumbent to divest control over its own infrastructure is not an easy job, and it might require intense negotiations and even legislation for Vodafone Qatar to ever operate fixed broadband off what is currently Ooredoo network territory. As it stands, Vodafone Qatar is providing services in Barwa City, south of Doha, where the Q.NBN did deploy FTTH; the problem is the same though as customers there cannot choose Ooredoo services, simply because it has not signed up to providing services there. Network sharing will remain a challenge until it actually arrives.

The UAE is also witnessing incessant technical issues in the realization of fiber bitstream, which was touted for launch way back in 2011.

The emerging Middle Eastern and African countries

The four ME countries of Afghanistan, Iran, Iraq and Palestine were well represented at the event while African players also had the chance to showcase their latest developments.

Roshan and Wasel, as well as the Afghan regulator, gave presentations in what promises to be one of the fastest-growing major telecoms market globally. Afghanistan has almost completed shoring up international connectivity and deploying a national fiber ring, and 3G is expected to boost the mobile sector even further. Physical infrastructure remains weak, but three fixed WiMAX licenses and a satellite operator are set to enter the fixed broadband market.

Iran spelled out its FTTH/B plans for the next decade – to connect 10,000,000 homes to fiber by 2020 in an ambitious NBN project. In fact, it is so ambitious that those present looked on in polite amusement. With a burgeoning population, bandwidth remains an issue in Iran. Yet with demand always ahead of supply, Iran promises to be one of the most promising telecoms markets in the world, which is quite a feat given the ongoing externally-influenced economic problems.

Conclusion

Despite their challenges, there is great hope in emerging MEA markets. Conversely, there is a degree of fear on the part of the regional major incumbents in developed markets about revenues drying up. Many are now looking beyond their borders for new licenses and M&A opportunities. The group looking at M&A is showing signs of stimulation in innovations for end users, but nowhere near the levels of their Western European or North American counterparts. They will have to work to forge meaningful partnerships and dig out services that are relevant to their customers’ respective markets and that the customers would want to pay for.

But for now, in local markets, broadband or, more precisely, mobile content and data are turning out to be the savior of revenues for the foreseeable future. Whether LTE will have a significant and influential role to play in it or not (in the way that 3G and HSPA were in relation to 2G and 2G+) is the million-dollar question. Exploiting assets, both old and new, will have an influence on how the data field is mined, but it’s going to take much more than simply deploying a fat pipe for operators to make any consequential return on investment. It will be interesting to see how developments in mobile data and digital media are coming along in the African and Middle Eastern regions at Broadband MEA 2014.

Altimo has made a bid to own all shares in Egyptian counterpart Orascom Telecom Holding

Russian operator group Altimo has made a bid to acquire all shares in Egyptian counterpart Orascom Telecom Holding (OTH). The firm made an offer via the Egyptian Stock Exchange, and OTH said it learned about the offer through a notice published by Egypt’s Financial Supervisory Authority (EFSA).

Altimo has submitted an offer to purchase Orascom Telecom Holding outright – all 5.25 billion shares – through wholly owned subsidiary Baskindale Limited, which is based in Cyprus. It has bid at a price of $0.70 per share.

The potential acquisition has numerous implications.  Altimo already owns a 48 per cent stake in Amsterdam-headquartered operator group VimpelCom. VimpelCom, in turn, owns operator group Wind Telecom, which is the parent company of Orascom Telecom Holding.

VimpelCom acquired Orascom Telecom Holding from Egyptian billionaire Naguib Sawiris.

“Based on the EFSA Letter, OTH understands that EFSA is currently reviewing the tender offer application and has instructed the Egyptian Stock Exchange,” Orascom Telecom Holding said in a statement.

Google has long been interested in white spaces

US white space specialist Carlson Wireless has teamed up with Google to launch the first wireless broadband trial using TV white space in South Africa. The test case will focus on offering wireless connectivity to ten schools across the Cape Town area in an attempt to show that broadband can be offered over white spaces without interfering with licensed spectrum holders.

To prevent interference with other channels, the network will use Google’s spectrum database to determine white space availability. The hardware – Carlson’s RuralConnect Broadband Solution, featuring the Neul Horizon software, will provide the communications backbone for the trial.

Google has had an interest in white spaces since around 2009, around the same time Professor William Webb, now CTO at Neul was head of research and development at Ofcom.

Rolling out wireless broadband technology into the unoccupied radio waves used as buffers between TV channels could enhance broadband access in rural areas. Compared with cellular, Bluetooth and wifi, white space devices use lower frequencies that have greater reach and in-building penetration.

But regulators have acknowledged that white space proponents must first prove that devices can operate without interfering with TV broadcasts and other wireless technologies that share these frequencies, such as wireless microphones. The most likely solution to this problem seems to be that adopted by the US – requiring that such devices include geolocation capabilities and provisions to access an internet database of the incumbent services, allowing for the white space device to be told what spectrum may be used at that location, which is exactly what Google’s database does.

Jim Carlson, president of Carlson Wireless, said, “This is a small example of TVWS spectrum overcoming a need that exists all over the world…providing connectivity to underserved areas is more than an interest to us, it’s specifically what got us into the game.”

Arno Hart, Project Manager at TENET(The Tertiary Education and Research Network), said, “This TVWS technology trial brings South Africa to the cutting edge of innovation in terms of improving Internet connectivity, and is a very positive step towards bringing many more South Africans online. This trial will also be used to inform the regulatory process in South Africa.”

Asif Aziz

Asif Aziz, Group Director Marketing Products and Propositions, Expresso Telecom, Africa, is taking part in a panel discussion entitled ‘Getting Ready for LTE: Deployment Considerations’,  on Day One of the LTE MENA conference, taking place on the 13^th-14^th May 2013 at the Jumeirah Beach Hotel, Dubai, UAE. Ahead of the show, Aziz gives us a few insights into the opportunities LTE presents in Africa.
What major developments have there been with regards to the LTE industry in your region this past year?

There has been some mention of an LTE roll-out. With the landing of ACE cables (African Coast to Europe) into West Africa there has been an increase of available bandwidth to operators. This will also enable development of retail propositions.

Does it make sense to think of LTE as a fixed-line replacement in certain cases?

My view is that it will be a complimentary service to strong fixed assets and in combination this will really help boost the customer experience.

Is VoLTE part of your plans and what benefits will it bring both to operators and consumers?

VoLTE is not currently part of our plans, but VoIP has arrived and is already widely used.

Pricing for LTE is a controversial subject. Are operators getting it right?

All operators are adopting a ‘wait and see’ approach.  As competition arrives and the technology is passed into the hands of real customers, we will likely see a change in approach.

Do you think that LTE offers great opportunities for monetisation or does it present challenges?

I believe that LTE will become a critical enabling platform for commerce, so in that sense it will provide great opportunities. However, in the lower ARPU markets of Africa, there is a strong need to establish a business case before beginning deployments.

What do you think will be the most exciting new development in LTE in 2013?

For Africa it will certainly be the increased availability of LTE services in 2013.

The LTE MENA conference is taking place on the 13^th-14^th May 2013 at the Jumeirah Beach Hotel, Dubai, UAE. Click here to find out more about the event.

Ericsson has secured a five-year deal to manage mobile networks across Africa

Swedish infrastructure vendor Ericsson has secured a five-year deal to manage mobile networks across Africa. The firm has signed a managed services contract with Atlantique Telecom, part of the UAE-headquartered Etisalat Group, for the operator’s Western and Central African operations.

Atlantique Telecom has operations in Benin, Central Africa Republic, Côte d’Ivoire, Gabon, Niger and Togo. The contract covers network operations, field maintenance, network optimisation and spare parts management for Etisalat’s multivendor mobile networks, including access, core and transmission, as well as value added services.

The firm said that it aims to develop offerings based on value-added services to its growing subscriber base. During the past decade, the number of mobile connections in Africa has grown an average of 30 per cent per year, the firm noted.

Nagi Abboud, CEO of Atlantique Telecom, said that the Ericsson deal enables the operator to focus on its core objectives.

“With the evolution of the competitive landscape in our markets, we need to adapt our operating model to provide a better service to our end users,” he said.

“Adopting this business outsourcing model is therefore an important step in our group strategy execution that will be for the benefit of our subscribers, who remain our top priority, and this will, as well, open new growth opportunities to our employees.”

Lars Lindén, Head of Ericsson in region sub-Saharan Africa added that managed services is a proven business model to support operators in growth.

“It is one of the most dynamic areas in our industry. Our work together will support Atlantique Telecom in defining a new generation of operators in Africa,” he said.

Infonetics predicts 2013 will be a "huge year" for 100G

The global market for optical network hardware looks set to have a good year in 2013, with North America and 100G expected to shine particularly bright, according to a report from Infonetics Research.

The US research firm estimates that the worldwide optical network hardware market fell ten per cent worldwide in 2012, with the SONET/SDH optical segment faring particularly badly last year, as global legacy capex fell 30 per cent.

However, Andrew Schmitt, principal analyst for optical at Infonetics Research, believes that things are looking up for 2013.

“Our conversations with equipment providers continue to trend positive, particularly in North America where 100G spending is about to ramp,” says Schmitt.

“The general consensus remains that an optical cycle for equipment in the core is emerging, what we call the ‘optical reboot.’

“Meanwhile, there are positive rumbles in the EMEA region, where 2012 ended with a spending flourish and carriers are cutting dividends to plough capital into general capex.”

The analyst adds that he is looking forward to visiting carriers in Beijing this spring, and that preliminary indications suggest that 2013 will be a “huge year” for 100G technology.

Dubai-based Etisalat has signed a global consultancy services deal with Huawei

UAE-based operator group Etisalat has signed a global consultancy services agreement with Chinese vendor Huawei.

According to the operator, Huawei’s business consulting team will partner with Etisalat to assist in developing the operator’s mobile broadband services and its digital services portfolio.

The primary objective of the agreement is for Huawei to support the operator group in enhancing its profitability through traffic monetisation schemes, premium customer-support solutions and cooperation on go-to-market strategies for new Etisalat services, the operator added.

The agreement will include cooperation on Etisalat projects such as building LTE mobile networks and over-the-top (OTT) media offerings such as Etisalat’s e-Plus packages.

“This agreement continues a long and successful history of collaboration between both companies and presents us with a win-win situation,” said Mr. Ahmad Abdulkarim Julfar, Etisalat Group’s CEO. “With a large and growing global presence of over 139 million customers in fifteen countries, Etisalat Group has built up a large and talented international workforce. This agreement will enable us to further collaborate to bolster the international expertise that already exists in the group.”

Samuel Eto'o, owner of Eto'o Telecom

The MVNO is most notable for being owned by Cameroon international footballer Samuel Eto’o – the highest played footballer in the world, according to business news website Business Insider. Despite the athlete’s wealth, the firm’s employees claim they have not been paid their salaries or bonuses for five months, according to African website Africa Top Sports.

The employees claim they are owed more than 12 million CFA francs (US$24,000) by Eto’o Telecom, and have even threatened to organise a hunger strike until they are paid, according to the report.

Employees are hoping the footballer will personally intervene to rectify the situation, and have been holding placards that roughly translated, read: “Eto’o, your idea of Eto’o Mobile was good. But our leaders took the opportunity to rip us off and exploit us. Come to our aid!”

The firm’s  Deputy Director General Georges Dooh Collins was dismissed in January. He was fired by the board in consultation with senior management, according to local news website Investir au Cameroun.