By 2015, 95% of Qatari homes are to be connected via fibre

Qtel, one of the two major telecoms providers in Qatar (the other being Vodafone Qatar), has started connecting its customers to the country’s new fibre-based broadband network.

In the past few months, Qtel’s field teams have laid out over 1,200 kilometres of fibre cable throughout the capital city of Doha, capable of connecting more than 60,000 homes.

So far, around 2,000 homes are believed to have been connected by Qtel, enabling them to receive high-speed Internet access and high-definition content on its IPTV service ‘Qtel Mozaic TV’.

After initial work in the West Bay Lagoon area, there are now Qtel teams working in parts of the Al Kharatiyat and Al Waab areas of Doha, with plans to move into new districts in the coming months.

Residences which are eligible to be connected to the Qtel Fibre network are being leafleted to ensure they know to expect a visit from the Fibre Team.

The Qatari government has appointed the Qatar National Broadband Network Company (Q.NBN) to oversee the contraction of an open-access fibre broadband network which will provide very high-speed broadband services to 95 per cent of households and 100 per cent of businesses in the country by 2015.

Both Qtel and Vodafone Qatar have signed agreements with Q.NBN to participate in the project, and Qtel has already committed itself to investing QAR 600mn ($ 165mn) in the network.

More content like this in the broadband zone

Virgin Mobile launched services in Qatar in May, having struck a partnership deal with local incumbent Qtel

Virgin Mobile’s newly launched operation in the emirate state of Qatar has had its wrists slapped by the regulator along with its local host and network partner, Qtel (Qatar Telecom).

The MVNO launched services in Qatar in May, having struck a partnership deal with local incumbent Qtel. But Vodafone Qatar, the only other mobile operator in the country, complained to the regulator about the way Virgin was positioning itself in the market.

The regulator, ictQatar, on Saturday issued a ruling that favoured both parties. Virgin will be allowed to continue selling its services because “customers who have purchased Virgin Mobile services have entered into contracts with QTel and not Virgin Mobile and, as such, Virgin Mobile does not require a telecommunications licence.”

However, Virgin will have to adjust its marketing, because the regulator found that the services “were represented by QTel to the public…in a manner which misled or deceived people about who was providing the services. Some people were misled into thinking that Virgin Mobile was a new telecommunications operator or service supplier in Qatar. This had the effect of distorting competition,” the regulator said.

In these situtations the only winners are the lawyers, and Vodafone is believed to be considering it’s legal options against Qtel and Virgin.

Qtel dominated the market in Qatar at the end of June with 2.198m subscribers, while Vodafone brought up the rear with 534,000 customers.

Qatar is also the country where Vodafone has a metro femtocell installation in place, serving open public areas. On Monday the carrier said it has also extended its residential femto offering to Greece – a new femto market alongside the UK and Spain.

Virgin Mobile

How does this article affect your perception of Virgin Mobile? What is this?

Virgin Mobile is Neutral

Total votes: 3

37 0 3 a732d38d30 0

Welcome to Doha

It’s just coming up to six am in Doha airport, Qatar, on Wednesday morning, with this member of the telecoms.com team part way through the trek back to the UK from China, via Qatar and Turkey. So it seems strangely fitting that local carrier Qatar Telecom (Qtel) should pick today to unveil its preparations for the move to LTE.

Qtel has tapped Nokia Siemens Networks (NSN) to modernize its infrastructure and add more capacity to its mobile network. Under the deal NSN has supplied its RAN equipment, including its Flexi Multiradio Base Stations and all IP backhaul technology, allowing Qtel to roll out HSPA+, and in the future, LTE.

NSN operates Qtel’s network under an existing managed services contract.

In other Middle Eastern news, Saudi Arabian operator STC said it has contracted Chinese vendor Huawei to deploy what it claims is the Middle East’s largest pre-commercial LTE network in Saudi Arabia.

The first phase of the project has already been delivered, offering peak downlink data rates of up to 100Mbps per user with commercial LTE data cards in the field. The pre-commercial LTE network is expected to complete its roll out by the end of 2010, covering major metropolitan areas such as Riyadh and Dammam.

As part of the deal, Huawei has deployed its IP microwave products from its RTN900 series into STC’s LTE backhaul. Ying Weimin, president of the LTE product line at Huawei, said: “Huawei projects data services will increase 500 to 1000 times in the next decade. With surging demand for data applications, the entire industry is facing the significant challenge of how to effectively deploy and operate a profitable mobile broadband network.”

NSN

How does this article affect your perception of Nokia Siemens Networks? What is this?

NSN is 54.8% positive

Total votes: 322

11 249 322 37cb29e1a2 0

Huawei

How does this article affect your perception of Huawei? What is this?

Huawei is 24.4% negative

Total votes: 318

14 120 318 26695df7ea 0

But both the Middle East and Africa continue to offer some of the best regional prospects for WiMAX, as a result of the relatively low take-up of fixed broadband – or indeed any fixed lines – and growing demand for data services.

The Middle East and Africa have the lowest household broadband penetration of all world regions, according to research by Informa Telecoms & Media. Household broadband penetration in the Middle East as a whole was 9.39 per cent at end-3Q09, and in Africa it was just 2.25 per cent.

Of course, those figures conceal considerable intraregional variation. The rate of household broadband penetration is very high in some of the small Gulf states – above 90 per cent in both Kuwait and Qatar – but in Jordan it was 18.85 per cent at end-3Q09, in Iran 2.97 per cent and in Syria only 0.45 per cent.

In Saudi Arabia, household broadband penetration was 33.85 per cent at end-3Q09, a lot lower than in some of its small Gulf neighbours. And Saudi households tend to be large, so population broadband penetration is a lot lower, at just 5.63 per cent at end-3Q09.

New Saudi fixed-line operator Etihad Atheeb is among those seeking to take advantage of the country’s relatively low broadband penetration by developing what it says will be the largest WiMAX network in the Middle East, Africa and Europe. Only the Clearwire network in the US and Wateen in Pakistan will be bigger, according to Etihad Atheeb. Etihad Atheeb launched its service in June under the Go brand, and by October it said it had 45,000 subscriptions. Go is offering residential subscribers a free WiMAX/Wi-Fi modem and plans that cost as little SAR109 ($29) a month. Go is also offering a USB modem for portable use.

Although Go is using the mobile 802.16e version of WiMAX technology, it is licensed as a fixed operator and so can offer only fixed and nomadic services and not mobile. But Go says the Saudi regulator should introduce a unified licensing program that accommodates the blurring of the lines between fixed, nomadic and mobile. Such a move would also allow Go to offer mobile services.

Saudi Arabia’s No. 2 mobile operator, Mobily, acquired local WiMAX operator Bayanat Al-Oula as a means of targeting the fixed-broadband market. In mid-2009, Mobily awarded Samsung a $100m contract to expand the Bayanat network to cover up to 20 cities. Mobily says it will bundle WiMAX with other services, including its extraordinarily successful HSPA mobile broadband service. Mobily says the two services are complementary, with the HSPA service being designed for mobile use while WiMAX is for fixed (even though Mobily uses the mobile 802.16e version of WiMAX).

Zain Bahrain also regards its WiMAX and HSPA services as complementary offerings, aiming its WiMAX service aimed at the fixed-broadband market and its HSPA service at mobile broadband customers. But Bahrain’s Mena Telecom, which also offers WiMAX services, plans to take advantage of the Bahraini regulator’s ruling that the country’s WiMAX operators can offer mobility starting in November.

In Jordan, Zain says it launched WiMAX services because it did not have a 3G license, but it did have WiMAX and ISP licenses and wanted to move further into the broadband market. In fact, Jordan’s WiMAX market is among the busiest in the region, as a result of liberalization, the country’s low broadband penetration and the absence of 3G services. Orange Jordan has been awarded the country’s first 3G license and is scheduled to launch services in 1Q10; the country’s other mobile operators have to wait another year to launch their 3G services. No. 3 mobile operator Umniah, Q-Tel unit Wi-Tribe and Bahrain-based Kulacom have launched WiMAX services in Jordan, in addition to Zain.

In Iran, where broadband penetration is very low, Mobin Net, which has been awarded a nationwide WIMAX license, has said that it is aiming to have 500,000 subscriptions within three years.

In Africa, a number of major operators – including MTN, Orange and Safaricom – are using WiMAX, as are smaller operators and new entrants. It is generally cheaper and easier to build a WiMAX network than a new wireline network for the data services that are seeing rising demand. WiMAX might also be a better bet for data than overloaded mobile networks. And WiMAX can be used for backhaul on those cellular networks.

Comium, which operates GSM networks in Ivory Coast, Gambia, Liberia and Sierra Leone, plans to launch WiMAX services in those countries and five others (Burundi, the Democratic Republic of Congo, Rwanda, Uganda and Zambia) by end-2010. Reliance WiMAX, a division of Reliance Communications, has acquired WiMAX licenses or licensees in a dozen or more countries in sub-Saharan Africa. And Augere, a company set up by former Orange group executives, has launched WiMAX services in Pakistan and Bangladesh and plans to do so in Tanzania and Uganda in 2010.

So there is considerable activity and potential. But that should be kept in perspective: WiMAX subscription numbers remain modest, particularly in comparison with HSPA. There were 107,300 WiMAX subs in the Middle East at end-2009, and that number is forecast to rise to 717,000 at end-2014, according to Informa. Africa had 192,400 WiMAX subs at end-2009, and that number is forecast to rise to 2.53 million by end-2014.

But there were 8.02 million 3.5G+ (HSPA and beyond) subscriptions in the Middle East at end-2009, and that will rise to 145.33 million at end-2010, according to Informa forecasts. In Africa, there were 6.2 million 3.5G+ subs at end-2009, a figure expected to rise to 138.51 million at end-2014.

Fortunately, the portfolios of international operations that the bigger players have built up over the recent few years present substantial opportunities for achieving economies of scale.

The Qatar-based Q-tel group has found that its network equipment costs have dropped by 10-15 per cent as a result of centralising procurement following its international expansion, Q-tel CEO Nasser Marafih said at the GSM>3G Middle East Telco World Summit that was put on by Informa Telecoms & Media in Dubai this month. Q-tel expects to make further similar cost savings as a result of centralizing its buying in areas such as roaming, wholesale and value-added services.

Operators that have scale are also better able to move into new service and technology areas, as Q-Tel has demonstrated with its Wi-tribe subsidiary, which specialises in WiMAX operations. Wi-tribe launched services in Jordan a year ago and in Pakistan recently. It will launch in the Philippines in 2010. Q-tel is further taking advantage of that WiMAX expertise by deploying WiMAX in Qatar to offer fixed-broadband services in areas that are not covered by its wireline network. Q-tel’s Omani subsidiary Nawras also plans to use WiMAX when it launches fixed services.

Q-tel is also planning to use managed-services unit Navlink as a platform for offering services to the enterprise market. Q-tel and AT&T each own 38 per cent of Navlink.

In addition, Q-tel is planning to introduce a single brand across its international operations in 2010. Such unified branding is in itself a form of economy of scale.

Etisalat also takes advantage of the economies of scale that come with its scale and international footprint, said Jamal Al-Jarwan, CEO of international investments at the UAE-based group, speaking at the conference. Etisalat has cut costs on the production of its airtime credit vouchers by centralizing manufacture in a single factory in the UAE. Etisalat has also centralized data-clearing and is looking at centralizing back-office functions. And some customer-service calls by Etisalat’s subscribers in the UAE are automatically re-directed to the group’s call-center in Egypt, which is cheaper to run than the one in the UAE because staff and other costs are lower.

International operators can also create roaming services that take advantage of their presence in a number of countries. Zain has perhaps done the most in this area with its One Network roaming scheme. But Etisalat says it plans to create a similar proposition across its operations in Egypt, Saudi Arabia, Sudan and the UAE.
Zain has also of course inked a series of managed services agreements, covering variously its networks in Iraq, Nigeria and most recently, East Africa. Batelco is keeping the costs down on its next deployment, the launch of services in India through its S Tel unit, by leasing all its towers in India from a local company rather than build its own, according to Ghassan Murad, Batelco’s head of mergers and acquisitions. S Tel will offer services in six of India’s rural C circles or mobile license areas, where ARPUs are very low, though mobile penetration is also low.

Vodafone has set up a unit to improve group efficiency by developing products and services centrally, or by transferring best practice between operations, according to Denise D’Elia, international services director at Vodafone Egypt. As a result, Vodafone Egypt will soon introduce a mobile-money service based on the m-Pesa scheme run by Kenya’s Safaricom, in which Vodafone has a 35 per cent stake.

The benefits of that centralization are not restricted to Vodafone-owned operators. Du, the UAE’s No. 2 operator, has a partner-market agreement with Vodafone that allows it to take advantage of the latter’s buying power and product development.

The focus is on improving efficiency but there is still interest in expansion, with Al-Jarwan having also said this month that Etisalat expects to win the third mobile license in Libya shortly. Etisalat is also interested in the planned Syrian third mobile license and in the privatization of Lebanon’s two mobile operators.

But further consolidation among the big Gulf operators is unlikely, because all are to some degree state-owned entities and are seen as national champions. “I wouldn’t see consolidation in the next five years,” said Al Jarwan.

Gulf cable deployment to spur regional growth

The telecoms industry in the Gulf region is in the throes of change with mobile markets becoming more competitive and saturated. As a result the big players are expanding into Africa and Asia Pacific in a bid to continue growth. But there is also a need for more domestic capacity to support expansion at home in both the mobile and fixed markets.

Members of the Gulf Cooperation Council (GCC), which consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates are feeling the heat in their home markets, which have become more open and where penetration rates are well over 100 per cent.

There were 57 million mobile subscriptions in the GCC at the end of September 2009, up 26 per cent from 45 million at the end of September 2008.

Last week, network operator Tata Communications signed strategic partnership agreements with several of the region’s major telecoms carriers to establish a new cable that will connect the region directly to the world’s major business hubs and city centres via Tata’s global network.

The partners are Bahrain Internet Exchange, Nawras of Oman, Qatar Telecom, Mobily Saudi Arabia and Etisalat of the United Arab Emirates, which will each be the exclusive landing party for the TGN Gulf Cable System in their respective geography.

The cable and the relationships with the landing parties will be further developed to provide an extended portfolio of value added services for local and global enterprise customers, Tata said. Using their own cable station, each party will have access to a high speed route to the global market, and will benefit from much needed resilience and diversity to the infrastructure in each country. This capacity will enable expansion in broadband penetration, internet usage and enterprise applications, the consortium said.

In 2007 and 2008, the Middle East and Africa have boasted the highest broadband subscription growth rates in the world. For technologically and economically advanced nations universal access to broadband services has become an integral part of economic policy. Just look at the amount of press broadband has been receiving in Europe. So it no real surprise that governments in the MENA region are also seeing the availability of broadband services as essential to a healthy and a stable economy for the future, especially in the face of recent recessionary trends experienced around the world.

Let’s not judge the region on its questionable past in terms of telecoms infrastructure development. There’s another incentive for MENA governments to improve their broadband infrastructure in terms of its importance as a necessary educational tool that can spur national development and innovation.

Mobile has had the edge for years. It was easier and cheaper to deploy. However, saturation in the mobile market has begun to have a positive impact on the fixed side with operators recognising the importance of having multiplay strategies to more effectively compete. A major change is already under way and technologies such as FTTx have a bright future, largely due to the high demand from greenfield projects, especially in the Gulf Cooperation Council countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. FTTx technologies in the Middle East and North Africa have a 1.7% market share, relatively high compared with Europe, where FTTx had 1.5% at end-2008.

Demand for bandwidth is increasing due to demand for media both managed and “over the top” (i.e third-party, iPlayer for instance, delivery of video that bypasses a broadband provider’s pay-TV distribution services and goes directly to the consumer) throughout the region. However, the vast majority of residential access users require higher access speeds, mainly for basic applications such as e-mail, surfing and linear downloads.

Find out more about Informa Telecoms & Media’s latest research on the MENA region

Nawras wins fixed line licence in Oman

Second placed Omani mobile operator Nawras has been issued a fixed line licence, the company said on Tuesday.

Nawras, which is majority owned by Qatar Telecom, is now licensed to provide fixed, data and international telecommunication services in Oman, and can use its network infrastructure to offer WiMAX and HSDPA services, the company said. The licence is valid for 25 years.

Since its launch in 2005 as the second operator in Oman, Nawras has won over 1.6 million GSM customers and claims to have achieved a market share of more than 45 per cent by the end of the first quarter of 2009.

Nawras’ extension into fixed line and consumer broadband services complements the Qtel group’s strategy to grow its operations across dedicated business lines, as part of its objective to become one of the world’s top 20 telecoms companies by 2020, Qtel said.

Qatar’s incumbent operator, Qatar Telecom, is under threat from Vodafone, after the UK-based operator won its second licence in the country this week.

In addition to the mobile licence Vodafone acquired in Qatar earlier this year, the Big V has also snapped up the right to offer fixed line services and plans to offer both from early 2009.

Analysts at Ovum note that although Qatar Telecom, which operates under the Qtel brand, has faced competition in the mobile sector with its international operations, it has never faced competition in its home market on the fixed or mobile side.

“With Middle Eastern governments starting to recognise the importance of telecoms in the development of their economies, they hope that liberalisation will bring increased development of infrastructure, increased teledensity, better quality of service, increased customer choice and more attractively priced services, all of which will put pressure on the incumbents to stay ahead of their competitors and prove beneficial to customers in these markets,” Ovum said.

Vodafone’s fixed licence win in Qatar follows the recent acquisitions of Ghana Telecom and broadband provider BroadNet in the Czech Republic. This brings the number of its subsidiaries offering fixed services to 13 out of 19. As Ovum notes, this is a big change from the days when the Mannesmann acquisition seemingly encumbered Vodafone with fixed line operation Arcor.

Ovum analysts Sally Banks and Steven Hartley, added that the fixed telecoms market remains a monopoly in most Middle Eastern countries, but said the status quo is set to change with signs that many countries intend to offer fixed licences during the next year or two. “Competition will come as a shock to many of the traditional state-owned incumbents in the region and they will have to diversify their current offerings to defend against the impending competition,” the analysts said.

Vodafone and its local partner will pay Riyal7.72bn ($2.1bn) for Qatar’s second mobile licence, authorities revealed on Tuesday.

A Vodafone led consortium was awarded the second mobile telecoms licence in Qatar in December, beating rival bids from Verizon and Etisalat.

Regulator ictQatar also revealed the shareholding structure of Vodafone’s local consortium, which will see the Vodafone/Qatar Foundation Consortium holding 45 per cent and governmental and Qatari institutional shareholders take 15 per cent.

The company will have to release a 40 per cent stake to public shareholders through an IPO, which will be held on or before November 30.

It is expected that the Vodafone will launch services in the first quarter of 2009, catering to one of the richest nations on earth.