Du and Huawei invest in Dubai Metro

In the Middle East, UAE operator Du has announced that it has provided wifi access across the Dubai Metro, the majority shareholder in Orange Israel is looking to sell its stake in the firm and a Bahraini operator is left reeling after the Indian Supreme Court cancels its licence to provide 2G services in the country.

Du has teamed up with Chinese vendor Huawei on a project to provide wifi access across the Dubai Metro, which will deploy its transmission network solution across the rail service. The project will see passengers and small retail businesses able to access mobile services in the stations across 18 metro stops on the Green line.

Huawei admitted that it sees a lucrative opportunity among urban rail operators. The vendor said that it has completed a number of rail projects worldwide, and that the MENA region is currently the world’s fastest growing market for rail projects and is expected to double in size in the next decade. There is more than $250bn of planned investment in the railways sector in the region and Huawei said that rail is central to its growth in the region.

“Dubai is a great place to live, work and do business in, but as the city continues to grow, congestion and traffic are becoming more problematic,” said Dr. Liu Qi, president, Middle East for Huawei Enterprise. “Better public transport infrastructure is an added draw for businesses investing in the region.”

Meanwhile, the majority shareholder of Orange Israel, Scailex Corporation, is looking to sell its stake in the operator. In Israel, France Telecom’s Orange brand is operated by a company called Partner Networks, in which Scailex currently holds a share of approximately 44.5 per cent.

The company has appointed Deutsche Bank and Lazard Freres to oversee the sale of its stake and Deutsche Bank has confirmed that it will supply a credit line of up to $1bn to the winning bidder, if necessary and subject to certain conditions.

The company is considering options including a deal that would turn Partner into a privately held company, according to Scailex’s statement.

And Bahraini operator Batelco said that it is carefully studying the detailed judgement handed down by the Supreme Court of India with its legal advisers and STel Management, following the decision from the Supreme Court of India to cancel 122 spectrum licences purchased in 2008.

Batelco invested in STel in order to enter the Indian market and said that it did so after following a diligence exercise with the support of financial and commercial advisers. The company said that it also received certain representations and warranties from STels promoter regarding the validity of the licence. However, it stressed that it was not involved in the bidding for licences, which have since been found to be marred by corruption.

“Batelco was not involved in the STel licence application process nor had any knowledge of any of the events surrounding the granting of the 2G licences in January 2008,” the firm said in a statement.

Batelco will also review the sustainability of its business operations under the revised conditions imposed by the Indian Supreme Courts. It has held 42.7 per cent equity in STel since May 2009.

“As Batelco continues to grow and diversify its operations, it intends to explore all options to remain involved in the Indian telecommunications market,” the company added.

Nayla Khawam, CEO of Orange Jordan

Nayla Khawam, CEO of Orange Jordan, talks about the country’s increasing demand for broadband, even in rural areas, and the key applications which are driving this growth.

What major developments have there been for the broadband industry in the MEA region this past year?

The most significant development has definitely been the increase in speeds and the expansion of broadband networks. At Orange, our broadband network is now producing speeds of up to 24 Mbps.

While our 3G+ network can now transmit content at up to 20 Mbps, there is still a demand for faster broadband connections that include the convenience of fixed-line phone service.

We are also seeing expanding demand for broadband in rural areas, which bodes well for the future of Jordan’s telecom industry, as well as the general development of the country.

Are broadband networks finally catching up with the technological aspirations of consumers, businesses and public bodies?

Absolutely. While there are certainly challenges remaining, we have come a long way in relation to other countries with a longer history of Internet use. I believe that Jordan is approaching the mindset where the idea of parity with these countries is no longer an unattainable goal.

In order to provide the best services for customers, Orange has taken steps to provide segmented services which are specialised to the client. For example, we have a highly specialised Business Enterprise Unit that provides integrated telecom services – including high-speed broadband Internet – to our business clients based on their needs. We have also been contracted by government departments to provide communications solutions.

At the same time, we are getting broadband Internet into the homes of individual subscribers with a greater geographical reach than ever before. There is no longer the concern that Jordan is missing out on the Internet revolution. Believe me, we are right in the middle of it!

Will consumers ever fill their super-fast broadband pipes?

Yes and no. Most of our consumers are going to be satisfied with the high-speed broadband Internet connection that we are currently providing. Our customers can stream HD video, take advantage of international video calling, and share rich multimedia content quickly.

That being said, there is always going to be a minority of largely young, tech-savvy individuals who are going to push the limits of the connection speed and bandwidth. At Orange we always consider this demanding consumer group, because if we can satisfy them, we can satisfy anyone.

What do you think will prove the killer application that creates demand for super-fast broadband?

Orange provides a wide range of wired and wireless broadband that keeps the customer connected all the time with their family, friends or business, even on the go. For fixed broadband, we think that applications like gaming, Web TV, live streaming, on-demand video, cloud computing and live sharing will be some of the major ones.

In terms of wireless broadband, its growth will be mainly linked to the introduction of new devices like tablets, notebooks and smartphones, which allow the customer to communicate and use new features that are provided by manufacturers and applications developers.

These new features include social networking, people hubs, mobile TV, streaming, personal cloud computing (for example access to their Google+ account or Sky Drive from Microsoft): those will be some of killer applications that we are sure to encounter in the near future.

Nayla will be speaking at the Broadband World Forum MEA 2012 event taking place in Dubai on 25-27 March, 2012. For more information and to register, please visit http://mea.broadbandworldforum.com

Dr Mohamed Nadder Hamdy, director capacity planning, Etisalat, UAE

Disclaimer: “The following interview expresses Dr Hamdy’s personal opinions based on his own experience and published research work. It does not reflect his company’s official policy or directives.”

Etisalat is the largest mobile operator is the UAE, commanding 60 per cent of its local market. As one of the major operators in the region the recent launch of an LTE service across most of the major cities in the county can be viewed as a major statement of its intent to stay ahead of the competition.

Ahead of his key speaking role at the upcoming LTE Middle East and North Africa conference, to be held in Dubai on the 29th-30th April, we catch up with Dr Mohamed Nadder Hamdy, director of capacity planning for Etisalat.

At what stage is your LTE rollout?

We have commercially launched LTE in September [2011] and started selling the devices a few weeks back. We have covered all the main cities with around 1000 base stations on 2.6GHz.

What are the major challenges that an operator will face when deploying an LTE network?

The first challenge is the selection of the spectrum to be used. Most countries have the 2.6GHz bandwidth available, but it has very bad propagation capabilities. It requires significantly more sites that what we used for 1800 or 900MHz. In order to use any of the GSM band, in particular 1800 you need to refarm from the GSM 2G network, which is not that simple. A significant number of users still have 2G handsets, as they are cheaper and don’t consume the battery [as much] as the more advanced smartphones. So that’s a major issue – the spectrum allocation, and selecting the best spectrum to deploy. For us, we have started with 2.6, as we have no choice. We had to deploy LTE as fast as we could and there was nothing else available. It’s fairly costly, in terms of the number of basestations and we feel that in terms of future expansion we should be going for the 1800 band direction.

How was your spectrum auction process managed?

The spectrum was not auctioned – we just applied. It’s a little different here in the UAE, as there are only two operators here and you pay fixed fees for the band annually. So even for the current 2G and 3G bands we are paying annual fees. It’s not a one-time lump sum that we pay.  And similarly the 2.6 band follows the same scheme. We requested an allocation of 20MHz on that band and we just paid the fees.

Why would you characterise the 2.6Ghz band as “very bad”?

What you care about most at this stage is the coverage everywhere – and the distance you can cover with this band is about one third of what you can cover with the 1800. That forces you to deploy a lot more base stations. The penetration for the indoor environment is also much worse that for the other bands. My experience with this band was not encouraging and we would tell other operators that are going into LTE to apply for lower bands.

Because its propagation distance is smaller, it means that you need to put more cells next to each other to get more capacity, [It’s a challenge] …if you are starting a new network and you want to have greater coverage, but you don’t have the traffic this band definitely doesn’t let you do that without a reasonable number of sites.

Are you planning on refarming your network to enable LTE to operate on 1800?

Our dongles do operate at 1800 but the fact is that most of our 2G subscribers are still using 2G handsets. We don’t see that they are going to change it in the near future. We still have a lot of traffic on the 2G bands so it will not be easy to refarm it straight away. To obtain full throughput from LTE you need around 20MHz of bandwidth, so we are taking it in steps for 1800. We might start with 5 or 10MHz and as the traffic on 2G reduces we will evacuate more and so on. I would say this would take approximately two years.

How common are the spectrum issues you are facing are to the rest of the Middle-East?

It is common and it is causing a great deal of ambiguity. It’s a compromise – if you want to start now then you have to use a worse band than if you wait a few years more. For example, the digital dividend that most countries are evacuating by giving up the analogue broadcasts. Even if we are promised that it will be evacuated, we don’t know if it will be in one or two years. So you are under this pressure to wait or you can deploy now with the higher cost of base stations. It’s a dilemma.

What other crucial issues do carriers need to take into account?

Another problem that everybody is facing is the availability of devices. Currently in our market we don’t have handsets at all; they’re all data dongles. The issue is that devices are not all capable of handing over to the previous 2G and 3G networks. This aspect needs a lot of improvement as it’s not very smooth so far. In the US they have some phones but they are CDMA with LTE- they don’t have phones that work on UMTS with LTE.  Of course the lack of voice is one of the major challenges so far. It is not available in the initial deployment. We are not offering voice services and this is one of the things that will limit the strength of LTE in the initial stages.

What benefits will VoLTE bring to carriers and consumers?

VoLTE will be of benefit as it will enable the use of smartphones, one of our major revenue streams – because it’s convenient for everyone to have the internet in their pocket. Without voice, no one will be carry an LTE smartphone so it’s extremely important for us.

The scheme we are adopting for VoLTE is the IMS solution, and that is not yet ready. It will take some time. The terminals also need to be IMS ready. A possible solution will be circuit-switched fall back, where the terminal will revert to 3G to make a voice call – but we don’t want to go that route; we want to go directly to the IMS part, which is recommended by the 3GPP and all the industry.

What’s wrong with the circuit-switched fall-back route? After all, it has worked in the US?

Circuit switched fall-back has a lot of call set-up delay. Imagine if your mobile needs to change to 2G or 3G before making or receiving voice calls – it takes maybe 15 seconds or more to search for a cell and switch to it. We are worried it will affect our customer perception.

So the disadvantages are primarily to the end user?

Yes. LTE is characterized by very high spectral efficiency and, much higher capacity so if you are carrying the voice over the LTE then you are relieving the 3G network from voice traffic and it will be faster to refarm the 2G and even dismantle its equipment. While we rely on the 2G and 3G networks to carry the voice we are losing capacity there. It will make it difficult to redeploy into LTE. By the end of 2012 we will have voice enabled handsets and the network will be ready?

Do you think LTE will be easier to monetize than 3G?

We were one of the first to adopt 3G technology in 2002/3 and we didn’t see any traffic pick-up until 2006-7. The reason is that there is no ‘killer-app’. I expect the LTE will be the same. There was no clear application for the 3G – even until today – the only thing that came up was that customers started to get smartphones and YouTube and other websites that require heavy throughput came up and that’s why started people started moving to 3G. The trend is now for smartphones and tablets, but before these devices came we didn’t have a real need. So it’s a matter of applications, a matter of the user need. In a few years we will have HD on YouTube so LTE will pick up. There is no killer app, but it might come.

With that in mind, why did Etisalat need to move to now?

The reason we went to LTE is to be prepared and get the know-how – before the traffic comes. To learn how to implement it, to operate it, before we get the heavy traffic. The data traffic is doubling every year and the major contributor is video which is now 50-60 per cent is video. I don’t forecast huge traffic device from customers as the devices are still expensive, but it’s a good opportunity to learn, to optimise and prepare for when the heavy traffic comes. We are charging almost the same as for 2G and 3G, but the dongle is still expensive so not everyone is not willing to go for that yet. It will come down through economies of scale, and soon the packages will be attractive.

What are you hoping to get out of the LTE MENA conference?

It will be very useful to get to know what the other operators are doing, the lessons learned and how they overcome it. That is the benefit of these sessions – so that others will not have to repeat the mistakes that others have committed.

Dr Mohamed Nadder Hamdy, Director Capacity Planner, Etisalat, UAE will taking part in the LTE Executive Think-Tank on Day One of the LTE Conference, taking place on the 29th-30th April, Westin Mina Seyali, Dubai, UAE. Go to the website to register your interest.

Juan Jose de la Torre, Etisalat

Juan Jose “JJ” de la Torre, A/Vice President – Marketing Strategy and Planning at Abu Dhabi-based operator Etisalat, discusses the company’s LTE and fibre rollouts, how it plans to drive user adoption of the attendant high speeds on offer, and the opportunities presented by over-the-top video delivery.

What major developments have there been for the broadband industry in the MENA region this past year?

In terms of mobile, over the years Etisalat has invested in the best equipment and robust technology infrastructure to support reliable network performance and high-quality connectivity that enables its customers to enjoy making their calls without interruptions. Etisalat pioneered the GSM and 3G services in UAE and currently connects the whole country through its GSM network and more than 99 per cent of the populated areas in the UAE through its 3G network.

We have seen that the developed countries in the MENA region, particularly in the Gulf area, are rolling out LTE. Etisalat is taking the lead in this, in terms of LTE coverage and capacity. Etisalat has deployed an FDD-LTE network that allows full mobility and smooth transition between LTE and HSPA+, enabling customers to stay connected from coast to coast.

Regarding fixed broadband, Etisalat continues to be among the top players in the world in terms of Fibre-to-the-Home (FTTH) coverage. At present, around 90 per cent of our market is fiberised. Suiting the UAE’s demographics and geography, FTTH can fully satisfy high-end home and business users and well meet customers’ requirements.

Overall, what we are seeing is that operators in the MENA region have really stepped up and put in a world-class infrastructure. In the UAE, Etisalat envisions that all UAE residents will soon be digitally connected. Through a mix of advanced broadband technologies, the corporation sees to add significant value to customers’ lifestyles, enabling them to achieve much more than what is possible today.

Are broadband networks finally catching up with the technological aspirations of consumers, businesses and public bodies?

The Gulf region is currently in a very privileged position, because what is in the ground today is much more advanced than what the market is demanding for. We have made an investment that is far ahead of what has been made in many countries in Europe. Now, we are aggressively forging a path forward in terms of customer experience improvement.

Still, the Gulf region and the MENA region are in the early stages in terms of user behaviour and consumption of broadband. Currently, the content that is broadcast on our networks is predominantly Western content, and the applications available are mostly from Western companies. This does however present a massive opportunity for local Arabic content producers and applications developers, considering the Middle East comprises nearly half a billion of the world’s population.

In other places, it is the user who is pushing the operator to go the extra mile and deploy more fibre, whereas in our case the fibre is already in the ground and the capability is already there. We only need to wait until the market is more mature and starts moving onto the next stage.

We have a very aggressive roadmap to deliver unprecedented speeds compared with Europe in the next 18 months. What is coming ahead is very attractive and very appealing, but at the same time we need to do it in a way that actually drives user-adoption, and generates mainstream products which are not only for the most advanced user but for the masses. Essentially, we need to help the market move forward to understand the benefits of fast broadband.

Will there still be a place for DSL technology in five years’ time?

Selective rollouts of DSL will be a necessity, not only in terms of economic implications, but also in terms of technical feasibility. This means that there will be certain discrete boroughs where it will be technically difficult or uneconomic to roll out and penetrate with fibre, so we need to have DSL to meet prevailing customer needs.

Our commitment is that we will always try to provide fibre and if fibre is not available, we are going to do as much as possible to make it happen. However, if we cannot deliver fibre, we will offer alternative technological solutions such as DSL or LTE to cope with market needs and customer needs. As a top player, Etisalat having a number of service delivery platforms is useful and I consider this as an advantage for the UAE’s end-users.

How big a challenge does over-the-top video pose to broadband operators and networks?

For us, OTT is an opportunity. We see OTT as a way to expand our product portfolio and deliver a 360-degree experience to our customers. Etisalat has been a pioneer in the region and one of the few operators in the world to launch its own OTT services.

The Etisalat OTT Platform enables telcos and ISPs to generate new revenue streams by offering enterprise platform services to media businesses seeking to deliver their own branded video services directly to global consumers via broadband PCs, mobile and OTT devices. This model provides an additional value proposition for content providers syndicating into telco or ISP service networks.

Today, we have an OTT version of our video services called ‘eLife OnWeb’, which, so far, has been rolled out across a number of devices with a number of different manufacturers, all across the MENA region. This means that a customer located in a country where we do not offer fixed-line services would still be able to enjoy our eLife OnWeb video services.

It is an opportunity to expand our reach and our supremacy in the entertainment ecosystem. At the same time, it will really enrich the customer experience. It is a way to realise our vision of a multi-device strategy, where the entertainment and the infotainment follow the end-user across difference screens, different devices and different markets. We really believe that OTT is going to be the way to materialise a great opportunity for us. I believe that OTT on multiple devices is true ‘ICT fixed-mobile convergence’ in action.

The service was launched in July of last year, in partnership with LG. It has been embedded in the LG Smart TVs sold in the MENA region. We are now expanding this to a number of other manufacturers – not just manufacturers of TVs, but also of set-top boxes, tablets,  smartphones and so on. We are putting our OnWeb application in a lot of devices.

The eLife OnWeb application gives you access to live Internet-based content, to pay-per-view, to Etisalat’s On-Demand (video-on-demand) and to our applications store. It really opens up a range of possibilities to a customer who is not using an Etisalat network.

Juan Jose de la Torre (“JJ”) will be speaking at the Broadband World Forum MEA 2012 event taking place in Dubai on 25-27 March, 2012. For more information and to register, please visit http://mea.broadbandworldforum.com

Mouin Abdallah,CTO of ITC, Saudi Arabia is speaking at LTE MENA conference, due to be held on the 29th-30th April in Dubai

As one of the biggest economies in the Middle East, high-speed connectivity has long been important to Saudi Arabia. The Kingdom’s Integrated Telecom Company, (ITC), is a service provider that offers internet access to both businesses and consumers. It possesses over 15,000km of fibre optic backbone infrastructure and two independent international gateways, providing it with a competitive advantage over its local rivals.

The telecoms landscape in the country is tightly controlled, but ITC gained a breakthrough in 2005 with a license to provide data connectivity and internet access across the whole country, Mouin Abdallah, the CTO of ITC, tells Telecoms.com.

The company focused on both the business and the consumer market and was primarily a fixed line provider, but due with to the geographical constraints of the country WiMAX technology proved to be the most effective method of delivering that last mile connectivity to remote areas. The WiMAX network was deployed as far back as 2006, which Abdallah explains was the reason for going with the early 802.16d standard, strictly a fixed line replacement.

The service currently has 60,000 subscribers, according to Informa WBIS statistics, but it’s hard to argue that on a global scale the sun is setting on WiMAX as a technology. Rather than moving to the later mobile focused variant, 802.11e, Abdallah said that ITC is now planning its move to LTE. He admits that in many ways it is like starting again as far as a network deployment. “We have to look to the LTE network as a Greenfield network; we’re not doing a migration.”

Part of the issues ITC faced in terms of its infrastructure was the fact that it served both its consumer and corporate networks from the same network. Its challenge is to smoothly separate the two. “We’re trying to resolve the issue what we have now of having two corporate and consumer segments on the same network; we’re trying to benefit from LTE carrying the consumer segment.”

Abdallah says the rollout is in its final stages and Huwaei has been selected as the vendor. It will run at 2.6GHz for the simple reason that, “that’s what we have available”. He says ITC is glad it has access to a decent amount of FDD 2.6GHz bandwidth, which gives it a fair amount of scope to deliver the services it needs. “We have 2x10MHz, which will give you a certain throughput which is enough at the beginning. But at a later stage we might need more spectrum”.

Rival Mobily is using TDD-LTE technology. Is that something that ITC had considered? “We try to look at the TDD, but FDD is available now. With TDD we have to very careful with compatibility – there are some complications in TDD.”

He admits though that challenge of 2.6GHz is that it requires a large number of sites to compensate for the relative lack of coverage it provides. One way to lower costs is through site sharing, which he says makes sense for all parties. “Basically, when we roll out the networks there are certain things you have to put in place, to find the sites, to acquire the sites, to install the equipment.”

To assist with this process Abdallah has put site sharing agreements in place with other operators, though the level of agreement does not extend to equipment sharing. Spectrum sharing is on the agenda, however he says. “We are exploring spectrum sharing solution, for sure. We’re trying to see how we can leverage the spectrum we have to try to optimise our investment.”

In general Abdallah is happy with the way the move to an LTE future is going. He states that he is glad that ITC doesn’t have to deal with the issues that existing carriers do on their network. Other operators he observes are struggling with the lack of access to good spectrum and are looking to refarm 1.8GHz used for 2G services over to LTE, an issue that ITC does not have to deal with.

“[As] we are a Greenfield we don’t have this [issue]. It might easier as a Greenfield [network]. For an existing operator, I’m not sure how they would implement LTE in their network.”

As a data only player ITC is also less affected by the lack of LTE handsets in the region but will welcome them when they come and hinted that it would like to get into the voice market. “Dongles for us would be enough, but we want the handsets as it will provide us with an additional footprint in the market.”

Abdallah says ITC is keen to learn from the experience of other companies and for that reason is looking for the LTE MENA conference, taking place in Dubai at the end of May. “It’s really important for us to know and understand, from a marketing perspective, what other operators are going to do, how they will optimise their investment, and position LTE technology in the market. It’s going to be really interesting and we’re looking forward to presenting our vision.

“The challenge is how and what we can squeeze, at all levels, out of our investment. These are the major concerns for operators.”

Mouin Abdallah, CTO, ITC, will be speaking at the LTE Middle East and North Africa conference takes place on the 29^th-30^th April, Westin Mina Seyali, Dubai, UAE. Go to the website to register your interest.

Wolfgang Wemhoff, CTO of Nawras (Oman)

Wolfgang Wemhoff, CTO of Omani service provider Nawras, discusses the company’s rollout of new fibre and wireless networks, the extent to which businesses and public bodies are currently utilising the benefits they offer, and laments the current lack of wireless spectrum.

What major developments have there been for the broadband industry in the MEA region this past year?

During 2011, the MEA region witnessed the fast development of mobile broadband based on HSDPA and a similar growth of DSL. Last year also saw the start of LTE rollout for mobile and FTTx for fixed broadband.

In Oman, Nawras had an exciting year with the continued expansion of its 3G+ network as well as the completion of its fibre-optic network and WiMAX rollout designed to serve the company’s growing number of home and corporate broadband customers.

Nawras also launched its first submarine sea cable as part of the Oman to India Tata Global Network-Gulf cable system.

Nawras is currently taking part in an FTTH project which is trialling this super-fast broadband technology in the north of the capital city. Around one hundred customers are currently involved in evaluating this service.

Are broadband networks finally catching up with the technological aspirations of consumers, businesses and public bodies?

It would be interesting to actually reverse the question and ask if the market has actually started to take advantage of the benefits offered by the major investments made by telecom operators in different broadband technologies?

There is a fast take-up of different social media and downloading of content, primarily driven by consumers. However, are businesses and public bodies truly utilising the opportunities for interacting with customers and citizens?

In Oman, the government is working hard to create a digital society, but overall broadband penetration is still comparatively low, so many opportunities remain.

Will consumers ever fill their super-fast broadband pipes?

With telecommunications technology evolving at a rapid rate, the very definition of super-fast seems to change on a regular basis.

What has been described as a thirst for a tsunami of data will continue to drive development, with customers’ appetite for data increasing and technology constantly trying to stay one step ahead of demand.

What technical challenges lie ahead for the broadband industry?

The major challenge I can see for telecom providers is being able to get sufficient wireless spectrum to meet increasing demand from customers. At present there is a shortage of available spectrum, but we understand the Telecoms Regulatory Authority (TRA) is actively working to rectify this situation in Oman.

In addition, customers will be expecting to move seamlessly from one device to another wherever they may be.

Operators, manufacturers and regulators will need to work together to use today’s incredible connectivity to deliver convergence, which will in turn enhance the customer experience and foster future innovation.

How can network operators best monetise their investments in super-fast broadband networks?

For a network operator to best recoup investment in super-fast broadband networks, a fair fee needs to be charged.

The challenge is to meet the increased demand for data with a great service for as many customers as possible, while transferring data at the lowest cost in order to develop revenue growth at cost-efficient levels. An interesting alternative would be to charge OTT providers an interconnect fee.

How can telecoms regulators further support the MEA region’s burgeoning broadband business?

The most crucial role that telecoms regulators could undertake would be to provide spectrum.

The provision of this spectrum will enable increased speeds and more sophisticated services, as well as accommodate anticipated data usage moving forward. As mentioned earlier, we understand that the TRA is actively addressing this issue.

It will also be necessary for regulatory frameworks to adapt to allow convergence trends to develop.

Wolfgang will be speaking at the Broadband World Forum MEA 2012 event, taking place in Dubai on 25-27 March, 2012. For more information and to register, please click here

Dr. Imad Y. HOBALLAH, Telecoms Regulatory Authority (Lebanon)

Dr. Imad Hoballah, Acting Chairman and CEO of Lebanon’s Telecommunications Regulatory Authority, talks about major developments in the broadband industry in the MEA region over the past 12 months.

LTE is rapidly gaining momentum in the Middle Eastern region. With new LTE deployments and commercial network launches that took place in Saudi Arabia from Zain Saudi, STC, Mobily, and the UAE from Etisalat, LTE subscriptions will grow at an average annual growth rate of 200 per cent. Global LTE subscriptions are racing ahead of initial expectations. They have already passed 3.7 million in the third quarter of 2011, spanning over 36 worldwide networks.

The deployment of FTTH services has been steadily growing and boasting speeds of up to 1Gbps, as in the case of the incumbent operator STC in Saudi Arabia. Also, the take-up of IPTV services is noticeable, with the focus of operators such as the Saudi incumbent on international expansion.

Faster speeds and increasingly affordable broadband access has fostered development of a digital economy, encompassing government services (e-government), e-health, e-education and e-commerce. In Qatar, for instance, strategies and specific initiatives have been launched in the areas of e-commerce, e-government, e-health and e-education.

The regulator has also unveiled plans to develop Qatar as a digital media hub, recognising the current underrepresentation of Arabic content on the Internet and hence the potential for growth. Kuwait has also taken steps to develop a digital economy; national level policies for e-health and e-government have been developed, with a number of services available online.

For countries that have been lagging behind in the rollout of broadband services like Lebanon, the market is set to enter a new growth phase centred on mobile data services after the two mobile network operators launched the overdue 3G services in 2011, deploying HSPA+ network infrastructure. DSL speeds have also been increased to a minimum of 1Mbps.

Are broadband networks finally catching up with the technological aspirations of consumers, businesses and public bodies?

Reliable and fast broadband networks are paving the road for a new breed of technological solutions based on the so-called Cloud Computing offers demanded by consumers, businesses and public bodies. Cloud Computing technology is being widely adopted worldwide due to its low cost, scalability, security, etc.

Cloud Computing solutions rely on fast broadband access between the end-user and the cloud in order to provide full functionality and features, in addition to remote management. It is noted that in developed countries, cloud computing is growing fast due to the availability of high-speed and robust broadband connections.

In developing countries, cloud computing is a great tool for development in multiple sectors such as education, industrial, financial and telecommunication; however, these goals cannot be achieved where broadband is not fast, reliable and secure. Yet, we note the landing of several broadband submarine fibre-optic cables in MEA and Africa (e.g. IMEWE, WACS, ACE, etc) promises to bring increased connectivity to the region

Will consumers ever fill their super-fast broadband pipes?

Consumers tend to demand more capacity for cheaper prices. Trends show that they are willing to accept offers for new and innovative services. On the operators’ side, as owners of the super-fast broadband pipes, the challenge is to find those services and market them to the “right” customers.

Network providers and operators have an abundance of customer data that enables them to collect a variety of information on user behaviour. Such information could be utilised in building commercial offers, leading to the marketing of the right products to the right customers and eventually raising the demand for and the consumption of broadband pipes.

Service providers are beginning, rightfully, to shift their focus from being mere voice and Internet-pipe providers to working on the right partnerships with application/content providers, in an attempt to tap the potential revenue associated with new, Internet-based services. This is becoming a necessity for them in order to compete in the market and continue to afford the CAPEX and OPEX expenditures required to keep up with increased demand for network upgrades and faster broadband pipes.
What do you think will prove to be the killer application that creates demand for super-fast broadband?

The definition of ‘super-fast broadband’ varies from one country to the other. In some countries such as the UK, super-fast broadband services should be able to deliver more than is currently possible over existing copper telephone lines (i.e. faster than ADSL2+, which tops out at 24Mbps), whereas in other countries, such as South Korea, the speed is 100Mbps.

I am not sure as to what will be considered the killer application. To some, Internet Protocol Television (IPTV) is gaining momentum as an important application for the next-generation Internet and will provide exciting new revenue opportunities for service providers. Internet Protocol television (IPTV) provides digital television services over Internet Protocol (IP) for residential and business users at a lower cost.

These IPTV services include commercial grade multicasting TV, video on demand (VoD), triple play, voice over IP (VoIP), and Web/email access, well beyond traditional cable television services. IPTV is a convergence of communication, computing, and content, as well as an integration of broadcasting and telecommunication.

To others, over-the-top (OTT) video services such as YouTube and Facebook  are more popular. These services refer to video, television and other services provided over the Internet rather than via a service provider’s own dedicated, managed IPTV network. OTT is delivered directly from provider to viewer using an open internet/broadband connection, independently of the viewer’s ISP, without the need for carriage negotiations and without any infrastructure investment on the part of the provider.

What technical challenges lie ahead for the broadband industry?

In developing countries including Lebanon, the main technical challenge for the broadband industry is to cater for advanced backbone and access infrastructures in order to cope with the increasing demand for higher broadband capacities.

Building a robust national and access infrastructure including FTTx requires significant public and private investments. Often public funding and/or subsidies are needed to maintain acceptable Return On Investment (ROI) for the private sector.

Moreover, serving rural areas continues to be a challenge. New solutions are being adopted such as public access femtocells, which are cost effective and easy to integrate, especially for remote areas where the backhaul connection could be provided via DMW or satellite.

As mentioned earlier, service providers and operators should tap the application/content business through partnerships and/or acquisitions of existing application/content providers. while benefiting from the operators’ visibility on customer behaviour to create innovative products and services.

How big a challenge does over-the-top video pose to broadband operators and networks?

Broadband service providers and operators are at risk of becoming dumb–pipe providers utilised by so-called over-the-top (OTT) application/content providers such as YouTube, Google, Facebook, etc.

Even though revenues from OTT are small in comparison to those from new IPTV service offerings, they still represent a missed opportunity for service providers.

Some suggest that the best approach for operators is to negotiate partnerships with OTT providers. One way to do that would be to charge for content delivery and guarantee quality of service for certain types of OTT traffic.

This could be paid for by either the content provider or by the end-user. However, it remains questionable whether giant OTT providers are willing to enter into such agreements with much smaller service providers.

How can network operator’s best monetise their investments in super-fast broadband networks?

Again, with the rise of application/content providers, network operators may become mere data “pipe” providers, selling only the broadband capacity with no significant ROI. Network operators have many options to avoid such a situation. The first option is to avoid competition with those providers by delivering an extra layer of value that only they can provide. This layer is based on using data analysis, such as Deep Packet Inspection (DPI), which leads to “customer experience visibility”, resulting in huge opportunities in the advertising world such as targeted ads.

The second option is to leverage the network policy capabilities the network operators have, to deliver an enhanced video streaming service for partners that want to guarantee a certain QoS for their customers. A revenue sharing model might be used in this case.

The last option is to benefit from the synergy created by the partnership with (or the acquisition of) existing application/service providers, allowing the creation of dynamic providers that possess customer visibility and application/content exposure.

How can telecoms regulators further support the MEA region’s burgeoning broadband business?

Governments and telecom operators should promote policies that encourage partnerships, especially in the rollout of services like FTTH. Also, because of the huge cost in the rollout of fibre infrastructure, some governments subsidise investments in fibre infrastructure in the same way they do for other utilities like roads and highways, as is the case in Australia and USA. In addition, regulators and policy makers may consider transforming existing universal service programs into programs for digital inclusion that support broadband services for all citizens.

Policy makers and regulators have several options to provide incentives for the private sector to invest in broadband, such as by adopting enabling policies, simplifying licensing regimes (licensing regulation can be simplified and a unified licensing framework can be introduced with all services unified under a single license or concession), making available more spectrum, reducing regulatory obligations and barriers to broadband build-out and access to broadband networks (e.g. by adopting rules or promoting policies and incentives that encourage infrastructure sharing, particularly involving passive sharing of towers, ducts and other support facilities), and offering tax incentives (reduce taxes on services, devices and equipment which will in turn increase penetration levels and pave the way for increased demand of broadband services).

Policy makers and regulators should also stimulate innovation and the development of applications and services by nurturing the creation and adoption of applications, services and digital content (for instance, the wide diffusion of e-government and e-finance applications and services will considerably raise consumer demand for broadband).

Moreover, private investment in research and development (R&D) should be encouraged by all possible means.  It is also essential to protect intellectual property, as this empowers researchers and inventors to lead the way to a smart and innovative digital economy. Innovation can be encouraged through intellectual property regimes that balance monopoly use of inventions with building a rich public domain of intellectual materials.

Regulators and policy makers have a role to play in promoting a first-class training system in all countries to provide creative human resources. It is crucial to facilitate investment in all forms of education, notably in the area of R&D, ICT knowledge transfer and the development of digital applications and content (in particular those related to the local culture). Sufficient and sustainable funding should be provided to universities, computer labs and other public research institutions, leveraging international partnerships when possible and advantageous.

Dr. Hoballah will be speaking at the Broadband World Forum MEA 2012 event, taking place in Dubai in March 2012.

Nima Pournejatian is chief technology officer of Iran’s MobinNet, the countries first and only WiMAX operator

For a company that is just a year-and-a-half old, Iran’s newest broadband player has certainly made its presence felt in its local market. Since the service was launched in August 2010, MobinNET has picked up 130,000 subscribers. The attraction of the company for its customers is that in a country where fixed line connectivity is relatively scarce and expensive, MobinNET offers the flexibility of wireless WiMAX connectivity to homes and mobile users, at an attractive price.

As such, MobinNET expects to increase its customer’s base to 160,000 customers by the end of March 2012, as its CTO, Nima Pournejatian tells Telecoms.com. It offers a number of packages for both consumers and businesses, while corporate customers can access high-level features such as dedicated point-to-point bandwidth and Enterprise Layer-3.

As a WiMAX player it is purely a data play at the moment, but a VoIP service will also be introduced in the near future. MobinNet offers speeds ranging from 128kbps to 2Mbps packages with and without download restrictions. The speeds might not be outstanding compared to the world’s fastest networks but in terms of wireless connectivity but it’s still welcome when there’s not a huge amount of choice. As WiMAX Pournejatian explains, there are no 3G operators in Iran, so WiMAX is a great solution for providing mobile broadband to eager customers. “If you look at the Iranian telecom market and infrastructure you’ll understand that there’s a lack of cable infrastructure. In European countries there are cable companies that are providing service but we don’t have that here.”

The fast expansion of fibre-optic connectivity for landline telephony is ironically boosting the attraction of WiMAX, as fibre optic connections are too expensive for consumers as a data connection, and there is no ADSL network to provide an affordable alternative.

“The ADSL implementation in Iran is restricted, because there is no copper network. There is a limitation in that [fibre optics] cannot provide ADSL – so it’s an advantage for WiMAX. You can install a modem and CPE for user and they will use the service. It’s a unique opportunity in the Middle East because of the geographical area and the population [distribution] that we have, and an advantage over the cable and copper based technologies.”

Consumers inevitably face restrictions on the certain types of traffic – P2P in particular. “Most traffic is HTTP and P2P. We have a limited amount of P2P traffic as if we open it, it will fully utilise our bandwidth. Bandwidth in Iran is very expensive compared to other countries so we need to limit this.”

Pournejatian explains that its day-to-day challenge is keeping its 450 base station strong multi-vendor network running smoothly.  “We’re the first WiMAX operator to have launched a multi-vendor integration operation. Because WiMAX technology is not as mature as 3G, or 2G, so multi vendor is a real challenge for us. As far as we know, we’re the only WiMAX operator that has three vendors on the active layer.”

The reason for this is that MobinNet wants to keep its suppliers on their toes. “We don’t want to be a single vendor and we want to keep the competition going and not depend on one vendor. Huawei is providing core, plus access and transmission network, and Samsung and ZTE are providing access plus related transmission equipment – base stations and microwave related transmissions.”

The major progress coming to MobinNet is the adding of VoIP services, which will help lower the cost of international calls for customers. “In our license we have the capability and permission to offer voice services, so we are going to launch [them] in the next couple of weeks so we can offer unmetered international calls.

As with all data enabled offerings MobinNET offers a feature enabling them to connect multiple devices via short range wifi.  Other innovations in the market are the introduction of WiMAX for IPTV services, and Iranian consumers are now able to buy Samsung smart televisions with MobinNet WiMAX CPEs attached for access to Video on Demand services.

“Right now if you look at our service it is mostly HTTP browsing and P2P. But in near future, I predict this would be more video traffic as well. Using interactive right now is a challenge and a subject to investigate. I predict that VoD will dominate. Right now we have bundled our TVs with one of the Smart TVs in the market and they are using our service as their internet.”

While MobinNet’s WiMAX service has got off to a successful start, it’s clear that the momentum worldwide is behind LTE mobile technology. Clearly this is a strategic business decision rather than a purely business one, and Pournejatian’s comments, “I don’t know if we’ll have a LTE bid or not but if there is, we will bid. We are investigating right now, but we have not decided. We look at some WiMAX operators right now that are moving to TD-LTE and it could be done for us as well. The major concern is that there will not be enough terminals in the market that will work on TD-LTE and at 3.5GHz – so that’s where we need to focus. Plus, we are analysing the FDD version of LTE as well. There will be a need for more investment in new spectrum I think.”

It is to help make this type of decision that is actually drawing MobinNET to attend events such as the Broadband MEA conference. “We are looking to see what the other broadband operators do and what the LTE and WiMAX operators do. We would like to see people at C-level and to talk with them to see their strategies, what they are looking for in all parts of the business – the network side, the IT side,  the marketing as well. We think [about] networking with others and also to listen and watch the presentation from operators and vendors to decide what technologies to use. We need to understand what type of marketing campaigns can be used – I think it will help us lots.”

The timeframe for this transition is likely to be the second half of the year, and if it happens there will effectively be two networks running at the same time but Pournejatian doesn’t think this will be a problem. “As far as the air interface is concerned WiMAX is very similar to LTE. So there are many common points. Both of them use as IP core and the transmission network is common to both technologies.  The only difference is the access layer. Even at the access layer both of them use OFDMA.”

Nima Pournejatian is the chief technology officer of Iran’s MobinNET Telecom and is speaking on day one of the Broadband MEA conference, due to be held  on the 27th March 2012, at the Westin Mina Seyahi Beach Resort and Marina, Dubai, UAE. Register your interest here.

By tracking the fundamental credit health of three major Middle East telecom firms – Qtel, Du and Saudi Telecom – for the relevant period, and comparing the results to various peer groups inside and outside the region, a clearer picture of the impact of the Arab Spring develops. It seems that the impact of political uncertainty has not had the negative effect one might expect.

From A Regional Perspective Using S&P’s Credit Health Panel (CHP) scoring system, the three companies were ranked against their Arab nations peer group using 33 fundamental metrics categorized by three main panels: Income (ability to generate income), Operational (ability to manage its balance sheet), and Liquidity (ability to repay its debt obligations on time).

Table 1 shows the relative rank for 18 regional peers to provide a snap shot of the region’s telecommunication industry post- Arab Spring. Out of the three companies selected, Qtel rests at “Bottom” overall and Saudi Telecom is classed “Below Average”. Du has an “Above Average” score. However, in terms of Income, Qtel and Saudi Telecom have an “Above Average” and “Top” score, respectively, while Du is scored as “Bottom”. In terms of liquidity, Qtel and Saudi Telecom have “Above Average” scores, while Du has a “Below Average” score.

However, while Table 1 provides a useful snapshot of the relative credit health of key ME telecom businesses, it does not indicate how the entire regional sector was affected by the Arab Spring. For this, a wider perspective is required.

Is The Signal Strong In EMEA?

With this in mind, the research was extended to encompass a peer group of 22 companies in the integrated telecommunication services and wireless telecommunication services sub-industries across Europe and Africa.

Table 2 shows that all three companies are performing relatively well against their European and African peers. Indeed, this broader analysis suggests that the Middle Eastern telecom industry is actually stronger in some instances – in terms of credit health – than its European equivalent, despite the negative economic impact of the Arab Spring.

To find an answer to why GCC telecoms have performed so well, it is worth a deeper examination of the credit profile and market perception of Qtel – the biggest mover under the previous two peer groups.

Qtel – How Has The Credit Health Changed?

Qtel has improved its credit health in the past four years. One important indicator is Qtel’s liquidity ratio in Chart 1 – that is, its ability to immediately extinguish its current liabilities.

Plotted against the company’s standard peer group of 40 firms, it is clear that since March 31, 2007, Qtel has been increasing its shortterm assets to cover its immediate liabilities. And after March 31, 2011, this ratio peeked above the group average.

In addition, Chart 2 shows that the company’s leverage (total liabilities-tototal- assets) dropped significantly from nearly 80 per cent on March 21, 2007, to around 65 per cent on March 31, 2011.

However, Qtel’s long-term debt (chart 3) grew significantly from $5,411m in 2009 to $12,013m in 2010. A conflicting performance is appearing as the total liabilitiesto- total-assets are falling but the long-term debt is rising (comparing charts 2 and 3). One likely explanation is that Qtel has increased its assets at a faster rate than its debt.

Indeed, Qtel’s total assets have been increasing rapidly since 2006; Chart 4 shows a 1,252 per cent increase since December 31, 2006. This was mainly driven by Qtel’s acquisition of a 38.2 per cent stake of NavLink for $28 million on November 20, 2006. Despite these very positive flashes, a growing debt burden could change Qtel’s perception in the market and thus its equity value.

Consequently, as an entity’s credit profile is often linked to share price in this manner, it is helpful to take a closer look at Qtel’s equity profile to examine it for any adverse behavior during the Arab Spring.

Qtel – How Has The Market View Changed?

Qtel’s share price dropped immediately after the beginning of the Arab Spring, with a significant fall (around 20 per cent) in the beginning of March 2011. Since that date, the price has slowly been increasing, mainly outperforming the S&P GCC Composite Index since April 2011. Interestingly, the S&P GCC Composite Index has rebounded since the drop in March 2011. However, the S&P GCC Composite Telecommunication Services Index only rebounded for a transient period. From April 11, 2011, it has been dropping, posing questions about the sector’s overall performance. However, Qtel is outperforming this index as well, showing signs of weathering the storm well. This could be a market response to Qtel’s initiatives to improve its leverage ratios.

Concluding Thoughts

In light of this fundamental credit health analysis, it seems that the key Middle Eastern telecom companies have been fairly resilient during the tumultuous political period in the region. Saudi Telecom, Du, and Qtel have actually improved their CHP scores despite strains from the Arab Spring.

From an equity perspective, the GCC Telecoms Index is showing decreasing performance, but Qtel so far appears to be relatively unaffected as it has continued to see increases in its share price. Qtel is clearly taking actions to improve the company’s credit health, and the market is rewarding this initiative.

Pavle Sabic is a Solutions Architect at S&P Capital IQ

After prolonged trials Etisalat has commercially launched LTE services in the UAE

Etisalat, the largest carrier in the UAE, has launched a commercial LTE network in the country. The service will offer customers mobile LTE-based broadband using E398-LTE USB modems, which it said were available immediately from Etisalat Business Centres and other outlets.

The USB dongles can be picked up free on contracts by signing up to Etisalat’s MyDataPlan ‘Ultra’ pack on a six-month or 12-month contract with a 20GB data allowance. The dongles can also be purchased contract free for AED799 ($218).

Matthew Willsher, chief marketing officer for Etisalat said in a statement that, “We are very excited about introducing the first real 4G (LTE) experience to our customers in the UAE. The launch of the service and USB modems follows user trials that showed exceptionally satisfying performance. In coming months, our customers can expect a range of LTE compatible data-centric wireless routers and tablets, and 4G enabled phones, as and when they are available in the market.”

Etisalat has deployed 1000 base stations in the UAE and cover 70 per cent of the population and Willsher said that it is aiming to cover the population of the whole country. The network used FDD spectrum and outside of LTE coverage Etisalat said devices would automatically fall back to its HSPA+ service to maintain a high quality of service.

Back in October Etisalat took the technology initiative in the country by introducing Near Field Communication (NFC) technology to Blackberry Bold 9900 devices, enabling purchases us to $50 to be made with the phone at MasterCard purchase points.