India's cellcos to balk at mandatory switch to solar-powered equipment?

Solar power: mandatory for India's cellcos?

The green credentials of DevelopingTelecomsWatch are pretty weak - this blog has never dedicated an entire article specifically to an examination of the environmental impact of telecoms technology.

Moreover, the only time DTW has discussed 'green' technologies at length, when wind and solar-powered mobile base stations were evaulated more than a year ago, the focus was mainly on cost benefits for operators. Just a cursory mention was made how such solutions compare favourably - in terms of environmental impact - to diesel-powered generators in the vast numbers of sites where electricty distribution infrastructure is inadequate across developing countries.

Even in terms of the narrower arguments about cost control, last April's article was by no means constructed entirely of fulsome praise for wind-powered and solar-powered mobile network infrastructure. It was noted that while running costs can, of course, look very attractive, the costs of investing in new solar panels and wind turbines themselves are not trivial. DTW also reported concerns on the part of the GSM Association about the results of trials of sun and wind-powered base stations.

Mobile operators, then, mindful of these questions, could presumably be resistant to any attempt to make reliance on these green technologies mandatory.

This is precisely the situation which could be facing cellcos in India.

Writing for India's Economic Times earlier this month, Subhash Narayan asserts that the country's government "may ask telecom companies to install solar panels to generate backup power for cellphone towers, a move that could hurt the sector already troubled by a squeeze in margins."

A proposal being finalised by the Ministry of New and Renewable Energy (MNRE), writes Narayan, "is aimed at containing the use of polluting diesel gensets to provide back-up power" and "could increase the cost of network expansion significantly"

"The green drive will prevent these engines of development (telecom towers) from becoming grave environmental hazards," said an official with MNRE. "We are discussing the proposal with various stakeholders. A cabinet note is proposed to be finalised thereafter to get the clearance for the scheme," the official said, requesting anonymity

Predicatably, the industry response, as reported by Narayan of the Economic Times, is not terrible enthusiatic. "This could significantly impact the margins of companies already under pressure due to rising spectrum cost and the cut-throat competition in the sector," said 'an executive with a large private telco'.

Narayan asserts that the Indian government is not keen on providing any subsidy for solar power equipment, but says it could offer them soft loans under refinancing schemes of Indian Renewable Energy Development Agency.

This skepticism from India notwithstanding, one can still find evidence of cellcos in developing countries going down the green power route. Chinese vendor, ZTE, for example, seems to have encouraged MTN's Cameroonian opco to take delivery of an unspecified number of solar-powered base stations.

India's cellcos to balk at mandatory switch to solar-powered equipment?

Refreshing news for emerging markets MVNO proponents?

Kirène Mobile avec Orange: new MVNO on the scene in Senegal; graphic from www.kirenemobile.sn

In March I asked which of India or Africa would be the first to see mass-market MVNOs. I tentatively concluded that perhaps India looked the better bet.

In that discussion, I made reference to a presentation by Carlos Valdecantos of mmChannel, a technology company dedicated to the development and management of digital entertainment services and platforms on a B2B format. In this presentation, Carlos argues that while Africa, taken in the round, might not yet be ready for the wide scale development of MVNOs, certain markets could possibly prove to be more attractive for investors in prospective virtual mobile operators. For Carlos, the high-potential markets are South Africa, Ghana, Morocco, Algeria, Tunisia and Egypt. This is due to their meeting several criteria that he sets:

• good market size (population level, GDP)
• strong economic liberalisation
• dynamic telecom sector

For Carlos, mid-potential African markets for MVNOs are Namibia, Mozambique, Cameroon, Gabon, Congo and Equatorial Guinea. These are described as having a reasonable mix of suitable market size, developing economic policies and economic reform underway. In this model, a further group of low potential markets is defined as being countries which "show an interesting opportunity in some of the key characteristics but completely fail to meet others." These are: Botswana, Tanzania, Kenya, Uganda and Sudan.

This leaves a large number of African countries which Carlos describes as "no go markets" for MVNOs.

Yet it is from one of these "no go markets" that news comes today of an MVNO being launched. According to a Cellular News item, Kirène, a mineral water brand in Senegal says that it has launched an MVNO in the country, running on the Orange Senegal network. The mobile service will be branded as "Kirène Mobile avec Orange", with the Mobile Virtual Network Enabler (MVNE) services being supplied by Transatel.

Quoted in the article is a gentleman I've had the pleasure of meeting more than once on the conference circuit, Philippe Vigneau, Transatel's Director of Business Development: "Being a forerunner for both companies, this project was really important to us. First of all because it was the first partnership concluded in Africa on a brand agreement (with Orange). On the other hand it is the first time that a food-industry brand, turns to a worldwide operator to develop a mobile telephony offer."

I will watch with interest to see how successful this enterprise turns out to be. Is Senegal the right place for such a venture? Or is Carlos Valdecantos right to content that the country is among the "no go markets" for prospective MVNOs?

I am also intrigued by the notion of a food and beverage sector brand getting into the MVNO business. In his presentation, Carlos observes that there is likely to a strong correlation between the long-term profitability of an MVNO and the strategic assets the company/brand brings to its mobile venture. He cites assets and examples including:

• systems + billing + customer base - example: Tele2 using fixed-telephony IT infrastructure to support virtual mobile service offerings across Europe.
• differentiated value proposition/specific target segment - example: ay yildiz, an MVNO aimed at Turkish immigrants in Belgium, with special prices on calls to Turkey and Turkish language customer support.
• access to customers/sales and recharge channel - example: Fresh Mobile, an MVNO offering in the UK from the Carphone Warehouse, the country's leading independent mobile phone retailer.
• access to huge customer base - Tesco Mobile is the MVNO offering of the UK's largest supermarket chain, which has a distribution channel unrivalled in its pervasiveness; the chain also collects rich customer data via discount card schemes.

On my travels in Turkey, I've also heard it suggested that Istanbul's big three football clubs, each of which has a fanatical fan base numbering in the millions, might enter the MVNO space once market conditions make it feasible.

I am much less clear what a mineral water brand brings to an MVNO project, much less in a potentially very challenging market such as Senegal. That said, I have never visited the west African country and could not comment on the degree to which Kirène is a dominant, well-loved brand. Perhaps brand equity alone will be enough to make this enterprise succeed.

Refreshing news for emerging markets MVNO proponents?

Good prospects for WiMAX as Uganda's mobile market grows strongly?

According to a recent Cellular News item, a new report from Pyramid Research predicts that mobile penetration in Uganda is expected to increase from 39.0% in 2009 to 70.7 % by 2014, driven by successful market liberalisation and increased competition.

Assuming the 39.0% is Pyramid's forecast y.e. 2009 figure, this is rather more optimistic than the 31.03% predicted by Informa Telecoms & Media.

The Pyramid report's author, Sylwia Boguszewska, anticipates that Uganda will see the second highest percentage increase in terms of mobile subscriptions in African countries - with only Cameroon's market set to grow more strongly.

Boguszewska notes that as a result of the liberalization process, the Ugandan mobile market is now contested by five mobile operators, three of which are well-established: MTN Uganda, Uganda Telecom, and Zain Uganda.

As Boguszewska explains, these longer-standing players have been joined more recently by Warid Telecom Uganda (in Feb 2008) and by Orange Uganda in March this year. A sixth entrant is set to join the fray soon. I understand that this will be an operation associated with the Ugandan arm of Indian eBusiness solution provider Anupam Global Soft, which, according to a Cellular News story from last summer, is owned by India's Reliance Communications and holds mobile and landline licenses. That same article stresses how far it might be unwise for any prospective new entrants to test the patience of of the country's regulator, the Uganda Communications Commission (UCC) with a delayed launch, recounting how HiTS Telecom came under fire for failing to launch on time. The recent launch of the France Telecom-backed Orange-branded MNO was facilitated by this failure on the part of HiTS Telecom. As was noted in Global Mobile Daily in March, France Telecom acquired a 53% stake in the Ugandan HiTS Telecom operation in October last year.

Released a little ahead of Pyramid's report was a Global Mobile Daily Uganda market update. This indicated that Uganda Telecom dominated mobile growth in 3Q08, with net additions nearly seven times as high as in 3Q07. It also reported strong interest in its W-CDMA services.

The GMD update suggests that Uganda Telecom's performance was thanks to the Libyan investor Lap Green, which acquired a majority stake in Uganda Telecom in 2Q07, and subsequently put in place an expansion strategy worth USD 115 million.

MTN Uganda, however, continued to report the highest ARPU in the market at USD9, and Uganda Telecom the lowest at USD5 in 3Q08.

The GMD update continues with an review of Internet services in Uganda, "which continued to grow in popularity, with fixed-broadband subscriptions increasing by 15% year on year in 3Q08."

"With total subscriptions reaching 4,050, fixed broadband is still the main mode of Internet access", continues the article, with mobile broadband accounting for only 500 subscriptions in 3Q08. Nonetheless, Informa Telecoms & Media estimates that mobile broadband subscriptions increased 150% quarter on quarter. According to Informa, deployments of fixed WiMAX are planned by licenced operators Infocom and TMP this year, following on from the launch of mobile WiMAX by Warid Telecom in December 2008.

Good prospects for WiMAX as Uganda's mobile market grows strongly?