What effect has the Arab Spring had on the telecoms sector?

Eighteen months after Tunisia’s Jasmine Revolution marked the onset of the Arab Spring, what effect has the upheaval in the region had on the telecoms sector?

According to Vodafone Egypt’s CEO Hatem Dowidar, speaking at the North Africa Com conference put on by Informa Telecoms & Media in Tunis in mid-May, the regional telecoms market has proved to be robust, and has in fact benefited from the demand for new forms of communications.

“It [the political change] did not adversely affect our industry,” said Dowidar. “People are relying more and more on telecoms to mobilize and to access social media, which has become integral to people’s lives.”

The use of YouTube in Egypt has, for example, increased ten-fold over the past year, according to Dowidar. A growing number of Egyptians use mobile broadband services and smartphones – and that has contributed to the continued growth in overall mobile subscription numbers, he added.

Indeed, Egypt has North Africa’s largest mobile market by subscriptions, with 80.82 million mobile subscriptions at end-2011, according to ITM research. Egypt is also North Africa’s biggest 3G market, with 7.62 million 3G subscriptions at end-2011. Although Egypt leads, the availability and take-up of 3G is increasing across North Africa.

Tunisiana, Tunisia’s biggest mobile operator by subscriptions, was – at its second attempt – awarded a 3G license as well as a fixed license earlier this month. Having secured the 3G license, Tunisiana plans to launch 3G services before the start of the Muslim month of Ramadan in late July, said CEO Ken Campbell at North Africa Com. Tunisiana is under pressure to launch 3G quickly because its two rivals, Orange Tunisie and Tunisie Telecom, already offer 3G services.

Algeria is the only major North African market to not yet have 3G, with 3G licenses unlikely to be awarded until after the nationalization of Orascom’s Algerian unit, Djezzy.

Other new services are also evident in North Africa’s increasingly complex and sophisticated telecoms market. Earlier this month, Tunisiana launched a mobile-money service called Mobiflouss, in partnership with Tunisia’s Post Office. Orange Tunisie has launched its own apps store. The introduction of MVNOs is expected in a number of regional markets, including Egypt, Morocco and Tunisia. Tunisia’s Virtual Networks plans to launch an OTT TV service as well as a triple-play offering.

Recent M&A activity in the North African telecoms market – both before and since the political upheavals over that have taken place in the past 18 months – also indicates a continuing interest in the potential of the region.

France Telecom has become an increasingly prominent player in North Africa, having launched Orange Tunisie, the country’s third operator, in 2010, and subsequently acquiring a 40 per cent stake in Morocco’s Meditel. And earlier this year, France Telecom and Orascom Telecom Media and Technology reached an agreement by which the former will take control of Egypt’s Mobinil. Other important recent M&A activity includes the merger of Vimpelcom and Egypt’s Weather Investments; and Qtel’s move last year to take control of Tunisiana by buying out its former partner Orascom. (Qtel conducted the Tunisiana transaction through its subsidiary Wataniya.)

France Telecom, Etisalat and Qtel have all shown an interest in the Libyan market, though it will not be clear what opportunities there might be in Libya until a new government is formed and draws up its policy for the telecoms sector.

But the North African telecoms industry also faces difficulties, which are not all due to the political upheavals in the region. Most of North Africa’s telecoms markets are competitive – in the mobile sector at least – and mobile penetration rates are now quite high, leaving fewer obvious opportunities for growth.

In Egypt, the retail price of mobile services fell at a rate of 40 per cent per year after the debut of third operator Etisalat Misr, according to Dowidar, although the rate of decline in prices has fallen recently. Mobile calls in Egypt now cost less than US$0.02 per minute, and the ARPU for prepaid subscriptions at Vodafone Egypt is less than US$3 per month, said Dowidar.

As a result, there is increasing pressure on North Africa’s operators to keep costs down, through various strategies including, increasingly, network-sharing.

Some figures suggest that the take-up of data services is being held back because data devices are too expensive for many. Smartphones account for only about two per cent of all mobile phone sales in Tunisia, said Mohamed Ben Rhouma, General Manager at Cellcom Tunisia, a distributor. (Though Ben Rhouma conceded that this figure does not take account of smartphones that individuals buy abroad and bring back to Tunisia.)

In addition, the cost of living is rising in Tunisia and that is squeezing the amount that many Tunisians are able or willing to spend on telecoms, said Tunisiana’s Campbell.

The roaming revenues of operators in Egypt and Tunisia have been hit by a decline in visitor numbers, as tourists stayed away from those countries because of the upheavals.

A lack of competition in the fixed sector is holding back commercial and other development, say some. In Tunisia, Orange Tunisie and Tunisiana have argued unsuccessfully that Tunisie Telecom’s fixed network should be unbundled. In Egypt, the lack of competition in the country’s fixed-broadband market was identified as a shortcoming in the eMisr National Broadband Plan report, published in late-2011.

North Africa remains an attractive yet difficult region. Broadly, it is attractive because it has a substantial, growing and youthful population; its people tend to have more spending power than their counterparts in many other emerging markets; and because there are good growth prospects in data services. But political uncertainty, tough economic conditions and fierce competition in the mobile market in particular mean that operating in the region is no easy ride.

The LTE Awards 2012 are taking place on May 23rd, at the El Xalet, Montjuic, Barcelona.

Now in its third year, the annual LTE Awards, in associated with Telecoms.com, are now established as the leading event of its kind. The LTE Awards are designed to recognise, celebrate and reward the great innovations that are being made in the industry, and this year are co-located with the LTE World Summit 2012, taking place on the evening of the 23rd, at the El Xalet, Montjuic, Barcelona. The event is sure to be a glamorous and entertaining evening for all participants.

The winners, from a varied selection of 10 categories and 48 shortlisted companies, will be picked by an independent panel of judges, consisting of leading industry experts, during a two week assessment process.

To whet your appetite for the event here is a preview of Category 3: Most Significant Development for Commercial LTE Network by an Operator.

This award recognises the progress by operators in deploying LTE.

CSL Limited

CSL announced that its network was ready for commercial service in October 2010. It was the first LTE network in Asia and the first 4G LTE dual-channel network in the world. 4G LTE was deployed across the entire Hong Kong market, with deployment emphasis placed in the areas where mobile broadband traffic is heaviest.  Key aspects of the innovation are, development and deployment of quad-band antennas, Software Defined Radio (SDR), CSFB for LTE smartphones and common 2G/3G/LTE packet core. CSL has launched USB modem, a pocket wifi and a smartphone that support LTE. CSL also launched new volume based pricing models with one set of service plans for both 4G and 3G to enhance market adoption. Contracted revenue for new mobile broadband customers was up by 50 per cent compared against the three months average before the service launch.

Etisalat

Etisalat launched the first mobile LTE network in the UAE in November 20, integrating 1000 base station with overlap to the 3G network using same SIM card. The deployment covers 80 per cent of the populated area of UAE. The LTE launch focussed on the high volume hotspots and targeted business users. An extensive indoor rollout for consumers is planned to cover the main shopping malls, airports, high rise towers such as Burj Khalifa, Dubai international Airport and Dubai mall. The launch used Huawid USB modem and routers and Samsung Galaxy smartphones and tablets. New customers receive a USB device for free or discounted when subscribing to Etisalat’s My DataPlan bundles on a six or 12 months contract. The My DataPlan bundles provide customers with a data allowance of up to 20GB, the largest in the UAE.

KT Corp

KT launched commercial LTE service in South Korea on 3rd January 2012 aiming to roll out the service nationwide to 84 cities by the end of April 2012. The service is called WARP to bring to mind faster-than-light propulsion systems from sci-fi such as Star Wars. The system is designed using a cloud-based radio access technology bringing together 144 base stations under on virtual station. The serive launched with four devices and plans to provide 18 by the end of 2012. As of Feb 2012, LTE smartphones were driving revenue and ARPU 1.43 fold higher than other smartphones.

Smart Communications

Smart Communications Inc. officially launched its 4G LTE network in April 2011 in over 30 locations in the Philippines. A key beneficiary of the launch was SHINE, an mHealth service operated by Smart. SHINE is a hosted electronic health information and referral system that can be accessed by mobile phone or a computer with internet connectivity. It enables doctors, nurses, and midwives to record patient encounters, easily find and retrieve patient records, remind patients and healthcare providers, facilitate referrals among facilities, and more efficiently generate government required reports. The LTE network facilitates speedier and more reliable access to this critical system on mobile devices.

The LTE World Summit is taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your http://ws.lteconference.com/interest.

Dr. Ayman ElNashar is senior director of wireless broadband and site sharing, for du, in the UAE.

Dr. Ayman ElNashar is senior director of wireless broadband and site sharing, for du, in the UAE. Ahead of the LTE World Summit, taking place on the 23-24 May 2012 CCIB, Barcelona, Spain we collect the thoughts of Dr ElNashar on the state of LTE and the issues surrounding it.

What are the main challenges you have faced, or expect to face, as you roll out LTE?

We are deploying LTE in In-Building Solutions (IBS) sites and are also focusing on securing backhauling capacity to cater for LTE peak throughput.

To what extent can LTE provide an insurance against declining revenue streams from voice and SMS?

I believe LTE will enrich the user experience and will compensate operators for declining revenue from voice and SMS by offering rich multimedia services and offering additional applications.

Is there a place moving forward for unlimited data tariffs? Are they sustainable?

Eventually VoLTE will be implemented but in a smart manner that efficiently utilises resources and QoS to improve the user experience.

With so much attention paid to the radio access network is there enough focus on backhaul?

In our case I think there is.  We should focus on exploring other non-traditional backhauling approaches such as PTP, GE Eband and PTP links among others.

What’s your view on FDD vs TD-LTE spectrum?

FDD is the best choice for mobile operators with 2G/3G networks, while TD-LTE can be considered as an evolution for ISPs with WiMAX/WLL networks.

Is there enough innovation occurring in the mobile network industry? Can you provide some examples?

Yes there are many evolutions in data, applications, and even legacy voice services like HD Voice. Also, on the network side, LTE will be evolved up to 1Gbps. There’s also the introduction of Single RAN, RAN with cloud concept, and femto/small cells.

What changes would you hope to see in the industry in the next five years?

We hope to see LTE evolved to 1Gbps and we need to see IMS as a common platform for all services.

Why are you attending the LTE World Summit and what are you looking forward to most?

To be involved in the state-of-the-art technologies that will be demonstrated at the conference

The LTE World Summit is taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your http://ws.lteconference.com/interest.

Four Middle East operators have launched LTE

Within the past year, four Middle East operators have launched LTE: Etisalat in the UAE; and all three of the mobile operators in Saudi Arabia – STC, Mobily and Zain.

But it is still early days for LTE in the Middle East. Although none of the operators will reveal their LTE subscription numbers, the indications at the LTE MENA conference, which was put on by Informa Telcoms & Media in Dubai on April 29-30, were that the number of LTE subscriptions in the region is still only in the low thousands.

Of course, the Middle East is not alone in this – LTE is a new technology and LTE subscriptions worldwide at end-1Q12 totalled only about 15 million, of which more than half are accounted for by just one operator, Verizon Wireless in the US, with about eight million LTE subscriptions.

One of the factors behind the low take-up of LTE in the Middle East is – as elsewhere – the lack of LTE devices. The LTE devices that Middle East operators are offering are almost entirely limited to LTE-enabled USB modems (dongles), though Zain Saudi Arabia has recently also introduced a LTE/wifi router.

However, Etisalat, STC and Zain Group all said at the LTE MENA conference that they monitoring the LTE device market and are considering forming partnerships with device makers to introduce additional LTE devices, particularly LTE-enabled smartphones and tablet PCs. Middle East operators are typically much less active in the device market than their peers in Europe and North America. But the arrival of LTE arguably presents Middle East operators with an opportunity, or perhaps a need, to become directly involved in the sale of LTE devices.

The fact that Middle East operators are short of suitable devices to popularize LTE was demonstrated by the recent launch of the new, third version of Apple’s iPad. Middle East operators hoped this LTE-enabled version of the iPad would give a push to demand for LTE connections, but their hopes were dashed because the iPad is at present only configured to work with the spectrum bands used for LTE in North America, 700MHz and 2.1GHz – neither of which is being used for LTE in the Middle East.

Operators in the Middle East are also still in the early stages of developing their pricing and promotion of LTE to consumers. There are signs that operators are deciding that they should make LTE more affordable. Etisalat, for example, has this week cut the price of its LTE dongle from AED799 (US$217) to AED599 (or free or AED159 or AED359 with one of Etisalat’s several six- or 12-month data plans). Etisalat is also shifting its marketing for LTE away from a focus on technical terms and features (LTE; 4G; download-speed metrics) that are likely to mean little to potential customers and towards messages that better communicate the benefits of LTE (such as, “Upload 850 pictures while you order coffee”).

Another notable feature of LTE in the Middle East – as well as a possible problem area – is the wide range of modes and spectrum bands that are being used. In Saudi Arabia, local mobile operators had initially hoped to use the 2.6GHz spectrum band for FDD-LTE, but this band is not available for available to them because it is being used by the military.

Consequently, STC decided instead to launch TD-LTE in the 2.3GHz spectrum band – a choice that the operator says is justified by the fact that this variant of LTE is being used in China and India, large markets that will give it momentum. Saudi No. 2 operator Mobily is also using TD-LTE in the 2.3GHz band. However, Zain Saudi Arabia, the country’s No. 3 operator, is using FDD-LTE in the 1.8GHz spectrum band.

In the UAE, Etisalat launched FDD-LTE in the 2.6GHz band, and plans to also launch in the 1.8GHz band, as well as in digital dividend spectrum when that becomes available. Du, the UAE’s No. 2 operator, plans to use the 1.8GHz spectrum band for its LTE launch. Bahrain has recently started a spectrum-allocation process that is expected to see the 2.6GHz spectrum band allocated for the launch of LTE services in that country.

This variety of mode and spectrum selections is almost certainly going to create difficulties for users who are hoping to roam with LTE devices within the region, unless some action is taken by regulators and the industry to co-ordinate spectrum use at a regional level.

Nevertheless, the likely increasing availability of LTE devices, combined with the wider availability of LTE networks as well as further promotion of LTE by the operators, is likely to boost LTE in the region.

But it will be some time before LTE becomes a mainstream technology in the Middle East – ITM is forecasting that the number of LTE subscriptions in the Middle East will be only a relatively modest 15 million at end-2016.

Orange has introduced a new cloud-based Telepresence service

Orange Business Services, the France Telecom owned brand, has announced the latest attempt to revitalise video conferencing, saying that conditions are now right for the technology to succeed.

At a press event that connected London, Paris and Beijing through its cloud-based video conferencing solution Telepresence Pass, the chief executive for Orange Business Services, Vivek Badrinath, said that a crucial difference of over previous iterations of the technology was that it was cloud-based enabling it to be fully managed by Orange.

Badrinath said it is attractive to users as it is very easy to use and that modern video usage had increased the appetite for video based communications. “Video as such is become much more important in interaction,” he said. “The fact that people watch short videos means that the taste for video communications has increased.”

Badrinath said a key benefit of the Telepresence Pass service was that it was compatible with multiple carriers and vendors such as Polycom and Cisco. He said Orange has 300 video staff trained to support the service worldwide and that it is backed by a 24/7 concierge service.

Orange said the service performs best when a dedicated telepresence room is used as these offers uniform conditions that optimise lighting and audio, which enhance the meeting experience. However, all conferences can also be accessed over the public internet using mobile devices such as PCs, and iOS powered phones and tablets.

To enhance the service, Badrinath said that Orange has invested €750m during 2011 to extend network coverage and improve QoS. Asia Pacific, Europe and U.S. are now interconnected using dual 10G belts, while Europe was enhanced with a 40G/100G optical network. Emerging countries meanwhile had benefitted from a 20 per cent increase in network capacity and coverage.

Pieter Schoehuijs, of Dutch paint company AkzoNobel, spoke at the launch to explain how it had successfully introduced the Orange technology to help connect its 80 global offices. In response to a question on whether there was any resistance from staff on using telepresence considering it would reduce the opportunity for travel, Schoehuijs responded that senior executives who would otherwise have to travel very frequently actually welcomed the technology. “The travel is fun to start with, but that chewing gum loses its flavour real quick,” he said.

Schoehuijs also highlighted the green credentials of the Orange service, stating that AkzoNobel had made an investment of €7-8m in the Orange Telepresence service but that it had saved the company about 50,000 hours a year based on 4,000 people participating in the teleconferencing, equating to 25 tonnes of CO2 emissions a year. “Not only is it financially attractive, but from a sustainability perspective, it’s quite frankly a no brainer,” he said.

The service is available now available directly on an Orange dedicated MPLS network in 67 countries, and up to 106 countries using leased lines. Costs range between €400-€4000 per month depending on the number of screens and requires 2Mb/s of bandwidth per screen for 1080p connectivity.

The Broadband World Forum is taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands. Click here now to register your interest.

Jayhun Mollazade, CEO of Azqtel.

Jayhun Mollazade, CEO of Sazz, the brand name of Azqtel, Azerbaijan, is speaking at the LTE MENA conference taking place on the 29th-30th April 2012 at the Westin Mina Seyahi, Dubai. Ahead of the conference Telecoms.com speaks to him about why the company originally launched with WiMAX, but is now is closely eyeing LTE technology.

Jayhun Mollazade was a man with a vision. As an Azerbaijani citizen living in the USA he saw an opportunity to dramatically improve the ageing and archaic soviet telecoms infrastructure of the former Soviet state. Over the past five years, Azerbaijan has put an emphasis on developing its ICT sector and as a result the country now has three mobile carriers along with several ISPs offering ADSL based fixed-line internet connectivity. But while the broadband market was growing by 30-40 per cent each year only one of the local carriers was offering 3G services and Mollazade and his partners saw that there was a real opportunity to offer high speed wireless data services.

At that time though, while LTE had a large amount of buzz and expectation about it, as far as building a real-world commercial network, the only real game in town was WiMAX, as Mollazade told Telecoms.com. “In 2009 there were discussions about LTE at the Mobile World Congress, but WiMAX was more established with certified products and affordable prices – LTE was more like something which may come. [When it did] the equipment, modems, end-user device – all of them were exorbitantly expensive, so we decided to go with WiMAX and to gain a customer base of subscribers.”

Initially, Azqtel’s licence only covered downtown Baku, the capital city of Azerbaijan, but in 2010 the service raised funds and was relaunched under the brand name Sazz, as a service that now covers the metropolitan areas of the capital Baku, and the nearby town of Sumquayit, covering a total of around four million people.

The service currently offers speeds of 10Mb/sec, which is on par with the real world speeds seen in most LTE networks running round the world. The price of 25 New Manat, around US$32, is affordable. Mollazade told Telecoms.com that the service has picked up thousands of customers in the past year, and is already cash-flow positive. However, on a global scale it’s clear that while the winds of technology are driving the LTE ship forward at a pace, WiMAX is virtually dead in the water. What then are Azqtel’s contingency plans for the future?

“We are looking in the next couple of years to be in line with the wireless capabilities of broadband”, admits Mollazade. “But we haven’t made any specific decisions”, he adds. “Technology always changes. Maybe five years from now there might be something different.”

Mollazade tacitly admits though that a transition to LTE is very much on the agenda, though exactly what it does choose to do is tied to what happens in terms of spectrum. As a WiMAX operator, Azqtel has a generous 60MHz of 3.5GHz, and though that’s frequency that isn’t widely deployed for LTE it’s an option it would take up if it could. “WiMAX operators round the world are at 3.5GHz and all of them, including us, are really strongly urging vendors to come up with a migration for LTE based on 3.5GHz. However, if we decide to go to LTE we would ultimately require LTE licenses if 3.5GHz is not going to work for us.”

“It’s all going to depend on a number of factors. Whether LTE will be available on 3.5GHz or not, whether we can acquire 2.6GHz or 2.3GHz or 700MHz frequencies. Or whether we need to skip all of this, and wait for LTE Advanced. We are weighing all options. But at the moment the customers in Baku are happy with what we are offering.”

In particular they are happy with the fully unlimited service that they currently enjoy. Is that a situation that Mollazade thinks is sustainable going forward? “It’s a true unlimited. In our legal contracts we warn that we may restrict user torrents, but quite frankly at this early stage, we don’t have any policies. As an operator we will be looking into given priority to VoIP over browsing and over YouTube, so at the moment we are looking at different technologies that will give us a DPI solution. However, at the moment with WiMAX we think we can keep unlimited. That gives us an advantage. The other carrier’s unlimited [services] are twice as expensive.”

In the meantime though, the focus is on expansion with the aim to move beyond its current city limits. “We are planning to expand nationwide. We have secured some contracts on education, in health and sports. We are planning in 2013 to go beyond the capital. Azerbaijan has a developing economy, but there is a need for broadband in the second, third and fourth cities. And we have a plan to deliver triple-play across the nation.”

Mollazade is quick to highlight the advantage its service has over the rival fixed-line ADSL services. “ADSL customers have to wait for a couple of weeks for it to come to them. And they normally get half [the performance] that they pay for – and we add a nomadic experience. So for a quality, speed and price perspective I think we are more competitive.”

The big challenges over the next 12 months Mollazade says will be keeping a close watch on capacity, particularly as its customer base grows in order to maintain the three pillars the company is based on, good service, affordability and good customer support.

Mollazade is enthused about the possibilities that LTE MENA conference, taking place in taking place on the 29th-30th April 2012 at the Westin Mina Seyahi, Dubai will provide, such as the chance to learn first-hand about how others in a similar position have dealt with change. “We are also curious to know about the experience of others, so we are looking at Sprint and Clearwire and P1 and Yes in Malaysia.

LTE MENA conference is taking place on the 29th-30th April 2012 Westin Mina Seyahi, Dubai. Click here to register your interest.

Akbank is using LBS functionality to push out coupons and other marketing to users based on their current location

Turkish carrier Turkcell and local bank Akbank have announced a partnership to introduce an NFC-based mobile wallet service incorporating location-based elements.

The consolidation of Turkcell’s mobile payments and LBS initiatives means that subscribers holding Axess cards can pay for goods via Turkcell’s Cep-T Cuzdan m-wallet. Akbank is using LBS functionality to push out coupons and other marketing to users based on their current location.

Akbank’s executive VP in charge of payment systems, Mehmet Sindel, said that the company aims to integrate mobile phones with payment systems and said: “We completed the first stage of our project that is enabling shopping with Axess cards by registering them with users’ mobile phones in previous months through our collaboration with Turkcell. Today, we never leave our mobile phones behind when we walk out the home, and we let our friends and people around us know our location through social media on our mobile phones. We have now launched the first application in our country which combines NFC technology and location based services. By doing so, we will enable our card holders to make full use of the advantages of mobility, and with location based marketing we can easily alert card holders to notice the opportunities around them.”

Watch out for our feature focus on mobile money later this week.

Hatem Bamatraf is the senior VP of network development at Du in the UAE

Hatem Bamatraf is the senior VP of network development at Du in the UAE. He is speaking on the subject of LTE as an evolution to technology and business, on Day One of the LTE MENA conference, on the 29th-30th April 2012, Westin Mina Seyahi, Dubai. He tells Telecoms.com his views on how to arrest declining revenues, the sustainability of unlimited tariffs and touches on issues around spectrum use.

What are the main milestones you have reached with relation to your LTE deployment?

Du has been very active in the area of LTE and we have successfully concluded all our LTE Technology trials. We have also completed the deployment of all the LTE base stations and the associated evolved packet core network. The final plans for our commercial launch is ongoing.

To what extent can LTE provide an insurance against declining revenue streams from voice and SMS?

There is no doubt that the revenues generated from mobile broadband data is increasing and will keep increasing for many years to come. This has been fueled by many factors including the evolution of smartphones and their fast adoption by end-users, the huge growth in video streaming traffic such as YouTube and generally what I call the increase in the “always-on-the-web” attitude. This not only comes from business users, but by youth who have grown up with the concept of always being attached to the internet. With around four billion smartphones and 10 billion smart devices being forecast for 2020, it is clear that the revenue generated by mobile broadband will be the dominant factor.

Is there a place moving forward for unlimited data tariffs? Are they sustainable?

I don’t think “real” unlimited data tariffs were or will be a reality. Even when major operators offered what they called “unlimited data”, they still had a cap on the amount of data being offered in such data packages or bundles. However, it is very important to note that LTE indeed will affect that cap, which will need to be significantly increased given the much bigger pipe that LTE provides to end-users.

With so much focus on the radio access network is there enough attention paid to to backhaul?

Backhaul expansion will play an essential role in any future mobile broadband network evolution. With the radio access network being able to provide such huge bandwidth, operators are already starting to realise how important it is to expand and keep expanding the backhaul network. It is very important to note that this backhaul expansion is not just about increasing the pipe; it is also about having a pipe that is smart, scalable and QoS capable.

What’s your view on the debate over FDD vs TD-LTE spectrum?

The upcoming LTE-Advanced offers unprecedented throughput to end-users. In return, it is a “spectrum-hungry” technology with its “carrier-aggregation” feature. The lack of spectrum for the upcoming LTE-Advanced is certainly an issue. But the efforts in this front are already ongoing, specially with regards to the ‘digital dividend’ in the 700MHz band and even the newly proposed ‘digital dividend 2”, which adds another valuable 100MHz to the original offering. So the real question will be how the standards bodies will come up with the band plan for this spectrum band and the different options for both FDD and TD-LTE.

LTE MENA conference is taking place on the 29th-30th April 2012 Westin Mina Seyahi, Dubai. Click here to register your interest.

Marwan Zawaydeh, CTIO of Etisalat, UAE

Marwan Zawaydeh is the CTIO of Etisalat, the largest mobile operator in the UAE. He is appearing on Day One of the LTE World Summit taking place on the 23-24 May 2012 CCIB, Barcelona, Spain, where he will be speaking on the topic of the impact of LTE on operator business models. Ahead of the conference, Telecoms.com catches up with him to found out the latest on Etisalat’s LTE roll-out.

What are the main milestones you have achieved with relation to your LTE rollout?

In a short time frame, we have achieved major milestones related to the LTE network rollout. As an example, a complete end-to-end dedicated packet core for the LTE network has been built. In 2011 we covered 80 per cent of the total populated area in the UAE through the integration of 1000 sites. This was done after an extensive testing phase to ensure full compatibility and interoperability with the existing 2G/3G networks for mobility to ensure service continuity. Nevertheless, we have started reframing of the 1800MHz band to ensure LTE indoor coverage can be deployed as fast as possible with the minimum of cost.

What are the main challenges you have faced, or expect to face, as you roll out LTE?

We have faced several challenges as we are one of the early movers to this technology. We can summarize these challenges as follows:

By having a clear business model that is based on offering innovative new services. With its full IP and simplified flat architecture LTE technology is superior to 2G/3G so these should utilize the high throughput and low latency of LTE. The new services will also open opportunities for partnership with application developers and content providers to offer innovative, interactive advanced video services, while optimizing the quality of customer experience. From an incumbent operator point of view, such as Etisalat, we need to consider enhancing the customer experience, increase revenue and optimizing CAPEX and OPEX costs.

What is your take on the unlimited data tariffs? Are they sustainable?

Although unlimited data traffic provides an attractive marketing message with the dramatic increase of mobile data traffic, due to the continuous increase of the smartphone applications, video calls and limited network bandwidth resources, the unlimited data traffic term is seen as unsustainable. Mobile operators should be more inventive with data bundles as well as deploying innovative indoor solutions such as wifi, and small cells.

With so much attention paid to the radio access network is there enough focus on backhaul?

We believe backhaul should facilitate the maximum throughput attainable on the radio access network. With the deployment of 3G/UMTS in 2004 and then subsequently FTTH/GPON in 2007, we already started modernising our mobile backhaul over IP by using FTTM (Fibre to the Mobile) for backhaul of 2G/3G base stations. Today, Etisalat has one of the largest fibre penetration ratios in the world, with fibre connecting most of our base stations.

With the adoption of LTE and its enormous bandwidth potential (keeping LTE-Advanced in view), we have already started developing a converged mobile backhaul network. This has the capacity to serve 2G, 3G and LTE traffic over a single fibre today and will be upgradable to more than 1Gbps capacity per site using NG-PON backhaul. As fibre infrastructure is already laid, such evolution will be without any fork-lift upgrade.

Moreover, with the upcoming evolution towards small cells and BBU Cloud (Distributed BBU and RRU), we are also keeping an eye over mobile fronthaul requirements and will prepare the network to cope with them.

Do you think that VoLTE will have an impact and if so in what time frame?

We will notice the real uptake in LTE subscribers once VoLTE is fully functional, so in that sense it will have a big impact. However, it requires a smooth handover between different technologies to ensure excellent quality of service and this should be the focus of the operators and vendors at this stage. Single Radio Voice Call Continuity (SRVCC) will be the first step towards network conversion and this will play a key role in enhancing the customer experience and expediting the monetization of investment in LTE. In terms of timeframe, terminals that support Circuit Switched Fallback will be available in the market in Q2 of 2012, while the handsets that will support the SRVCC will be available by Q4-2012. This will help increase the demand for LTE network. We are conducting trials with major smartphone vendors and the test results so far are very promising.

Is there enough innovation occurring in the mobile network industry? Can you provide some examples?

I feel more innovation is needed. Operators should innovate to be able to compete with the OTT players. From my point of view an innovation culture will be integrated with our corporate strategy we should not wait for standards to be established before innovating. Innovation shall be opened to our customers and applied in away to create a more loyal community.

Where do you stand on over-the-top players contributing to the costs of rolling out networks?

The over-the-top players are still leading the innovation fight by using our network to reach our customers with the best ideas to solve customer needs. As it stands, operator will keep paying the bills for network expansion, while the OTTs will keep increasing the revenue. The costs involved are not only that of network expansion but also from innovative social media services that impact on voice services and therefore on our main revenue streams. Mobile operators need to grab part of these revenues by developing a partnership model with over-the-top players by complementing their solutions through offerings such as customer reach, cloud infrastructure, bill payments and security solutions and adapting to upcoming standards; such as “Joyn”, which is part of the IMS road map.

What changes would you hope to see in the industry in the next five years?

With the fast adoption of the LTE technology with its exceptional customer experience thanks to its low latency and high throughput, I foresee more vertical integration across the mobile industry. The main differentiation will be in how to apply this technology that is changing many people’s way of life and creating a connected world. More creative cloud-based services will be launched, M2M will take a huge focus and draw investment, and new business models based on revenue sharing will be the way forward for growth.

From the network side, I see a move toward all IP architectures and IMS based systems with more convergence in 2G/3G/4G networks at both the access and core side.

Why are you attending the LTE World Summit and what are you looking forward to most?

We are attending to share the experiences and challenges that have been faced by operators in the rollout of their LTE networks and to get an update on their technology strategy, network road map and plans to address the many challenges which include dealing with data traffic growth, the increase in of smartphones, how to enhance the customer experience, the off-loading of 3G/HSDPA networks, how to improve network efficiency, how to lower network costs and how to enhance overall revenue.

The LTE World Summit is taking place on the 23-24 May 2012 CCIB, Barcelona, Spain. Click here to register your interest.

Dr Zeyad Bin Thamer Al Otaibi, group CTO of STC

Dr Zeyad Bin Thamer Al Otaibi is the group CTO of STC, one of the leading operators in the Middle East region and will be interviewed on stage on Day One of the LTE MENA conference taking place on the 29th-30th April 2012 at the Westin Mina Seyahi, Dubai. We talk to him about his views on how OTTs can contribute to the cost of networks, how LTE will lead to increased revenues and why unlimited data deals may have a future after all.

What are the main milestones you have reached with relation to your LTE deployment?

We have already launched LTE service at 2300MHz using our Single RAN platform and over the calendar year of 2012 we will continue our roll-out to cover over 70 per cent of the Saudi population.

What are the main challenges you have faced, or expect to face, as you roll out LTE?

Given that we are adding LTE on top of our Single RAN sites, adding the LTE radios is quite straightforward. We recognise that many mobile operators have major challenges deploying sufficient backhaul bandwidth. At STC we are fortunate to have a very extensive fibre network connecting both businesses and consumers and we can easily leverage our FTTH programme to provide FTTM (Fibre-to-the-Multi Dwelling Unit).

Where do you stand on the issue of Over-the-Top (OTT) players contributing to the costs of deploying networks?

STC will provide both consumers and content providers with whatever they have paid for. At the moment most consumers choose to purchase “best-effort” internet services and over-the-top (OTT) providers may choose to purchase content delivery network (CDN) services. In the future consumers may wish to purchase premium video services from the likes of Netflix, Amazon, and iTunes and STC will certainly provide the underlying QoS capability.

There are several viable commercial models to make it easy for the consumer. It may be easier for the OTT provider to collect the payment for the movie plus the premium QoS connection and then remit the payment to STC (so in that sense the OTT player is “paying” for the connection).

Alternatively, STC may provide the OTT content player with a carrier billing service where STC collects the payment for the movie and the connection and remits a share of the revenue to the OTT player.  Or the OTT player could provide a channel of content on STC’s IPTV platform and the revenue is shared. In all these scenarios, where the consumer has, one-way or another, chosen to pay for premium content, the OTT is player is in effect contributing to the cost of deploying the network.

To what extent can LTE provide an insurance against declining revenue streams from voice and SMS?

LTE will give STC a lot more data “inventory” to sell at a lower unit-cost per GB and therefore it will increase our potential revenue.  For example, and using hypothetical numbers, if LTE increased our network capacity from 100TB to 1,000TB and reduced the cost of data by 5x we would have the capacity to increase potential revenue by a factor of two.  As  consumers become more habituated to wireless data they may be prepared to pay for ever greater quantities of data and in the same way that fixed broadband reversed the decline in fixed ARPU, mobile broadband may, as you put it, provide insurance against declining voice and SMS.

However there is also a whole series of new “Operator-On-The-Top” services (RCS, mobile advertising, carrier billing, mobile payment etc.), which are enabled by HSPA and LTE and which will generate new revenue lines.

Is there a place moving forward for unlimited data tariffs? Are they sustainable?

There is a place for all tariff packages, at the right price!  The right price for an unlimited package depends on the cost of providing the data.  STC is very focused on reducing the Total Cost of Ownership of every GB of data and taking all steps to reduce that cost.  As more and more new technologies are deployed in the field to reduce the unit-cost of data (more spectrum, LTE, mimo, adaptive antennas, Cloud RAN, targeted offload, etc, ) the cost of providing unlimited packages will fall to the point where it becomes more and more affordable.  Today demand for data is rising faster than the supply which is why some operators are discontinuing the unlimited packages, but as the new technologies drive unit cost down, unlimited packages will be affordable again. Operators do have to manage the rebalancing of voice/sms and data tariffs so that total ARPUs are maintained or increased.

With so much attention paid to the radio access network is there enough focus on backhaul?

STC is fortunate to have such an extensive fibre network. For several years we have been investing in providing both point-to-point and GPON fibre and this positions us very well for LTE. I would agree that if an operator does not have a rich fibre backhaul option that the benefits of LTE/HSPA+ may be more constrained. Moreover as we move into the future world of small cells, especially Cloud RAN architectures, fibre backhaul becomes an ever more critical component.

What’s your view on FDD vs TD-LTE spectrum?

All spectrum is good spectrum.  At the moment all the players in the Kingdom of Saudi Arabia (KSA) have TDD spectrum and this enables us to deploy immediately. In the future, as demand rises, we expect that we will have to use additional FDD blocks (1800, 2600) as and when these blocks become available.

We do recognise that the value of a block of spectrum depends heavily on the eco-system of other global operators who use it and thus the number of device vendors who will produce compatible terminals.  We note that for TD-LTE there is a huge potential market in both China and India for TDD and this will drive the availability of devices. We also note that unlike 3G, in LTE many of the devices and chipsets will usually support both FDD and TDD, making the number of compatible devices even greater.

Do you think that VoLTE will have an impact and if so in what time frame?

There are at the moment many different ways to provide voice (2G, 3G, OTT, RCS etc) and there is no urgency for yet another system.  However we have deployed IMS to support our Voice-over-Broadband for our FTTH and RCS customers. In due course, as devices become available, VoLTE will be added too.

Is there enough innovation occurring in the mobile network industry? Can you provide some examples?

There is a huge amount of innovation going on in the mobile Industry as a whole but perhaps not enough by the mobile network operators. Handset, infrastructure, and App developers all have many innovations in the market and in their development pipelines. Most operator innovations have revolved around pricing promotions to attract and retain customers but the operators would benefit from more innovations to increase their revenues. However with the RCS and WAC API initiatives there are positive signs that operators are starting to do more to develop “Operator-On-The-Top” services that will generate new revenue streams.  STC has not in the past been a pioneer, preferring to be a fast-follower. However, we have recently established a VC fund to nurture innovations relevant to our markets and are reinforcing a culture of innovation within STC.

What changes would you hope to see in the industry in the next five years?

We are just at the beginning of what is perhaps the most exciting phase of mobile network development. In KSA we have a national project to re-orient our economy from commodity based to ICT based. In five years I would hope that STC has made excellent high-speed, low-cost, fixed and mobile broadband services available to all our citizens.

I would like to see that in five years the industry has made smartphones and excellent quality high-speed wireless data services affordable for the mass market and that mobile operators are fairly compensated for providing these services. I would hope that by then mobile operators are providing their customers with a much wider range of content, applications and transactional services in a seamless manner. I would like to see more local Middle Eastern and Saudi companies developing and hosting these services on top our high-quality high-performance network.

Dr Zeyad Bin Thamer Al Otaibi is the group CTO of STC, and will be appearing on Day One of the LTE MENA conference taking place on the 29th-30th April 2012 at the Westin Mina Seyahi, Dubai. Click here to register your interest.