Aptilo Networks positive about prospects for WiMAX in developing countries

Johan Terve, Aptilo Networks:
good opportunities for WiMAX in emerging markets

DevelopingTelecomsWatch was a proud media partner of this year's iteration of the annual Africa Com conference and exhibition held in Cape Town. The event concluded on Thursday this week, wrapping up two days of discussions and networking among the continent's telecoms operators and their business partners from the vendor and systems integrator communities.

One theme explored in some detail at the conference - via a special breakout session - was the question of to what extent WiMAX is gaining traction in Africa.

With this in mind, DTW spoke this week with Johan Terve, VP Marketing at Aptilo Networks, a supplier of pre-integrated management solutions for control of billing, user services and access in WiMAX and Wi-Fi networks. Aptilo Networks had a presence at Africa Com so we were keen to get a sense of whether this was indicative of an upbeat view of the scale of the WiMAX opportunity in Africa - and across developing countries and emerging markets more generally.

For proponents of WiMAX, the emerging markets opportunity may grow in importance - certainly if we are to believe bleak analyses of the technology's ongoing prospects in more developed economies. One such comes from Terry Norman of consulting and research firm Analysys Mason, who in August predicted a difficult time ahead for equipment makers.

Norman believes that "over the last two or three years, WiMAX has gained a strong foothold in developing countries in which there is a need for broadband, but the fixed infrastructure is poor." He feels, however, that these markets offer insufficient growth potential and size "to sustain continued investment from such heavyweights as Cisco Systems, Intel and Motorola without additional sales in the developed markets". Therein lies a problem, argues Norman, because "in the developed markets of Europe and the USA, we see some early signs of a difficult future for WiMAX."

One difficulty could be any reluctance on the part of of leading mobile operators to deploy the technology. Terry Norman writes that in developed European markets, operators are almost certainly upgrading their 3G technologies to 4G LTE in order to match the rising demand for data. Norman draws a connection between leading no leading MNOs hinting that they might adopt WiMAX and the idea that "LTE is imminent."

Johan Terve rejects the notion of that it being "too late" for WiMAX in developed markets. Terve feels that such language would suggest that "this is a race with a single winner". He believes the opposite to be true and that both WiMAX and LTE will co-exist just like xDSL and fiber do in the wired broadband world.

While Terry Norman of Analysys Mason was downbeat about the growth prospects for WiMAX in Europe and US but sounding somewhat positive about the case for the technology in emerging markets, some analysts are more cautious even about the latter opportunity.

A Cellular News article published last month asks whether there really is a big market for WiMAX in the developing countries. The article is built around opinions recently expressed by industry watchers Ovum, who find "that the confluence of several factors including technology cost, coverage, vendor support and service provider choices will limit WiMAX to only a niche technology in the emerging markets, forming part of established fixed and mobile operators' broader broadband access portfolios."

Johan Terve responded to this point by saying that "if they mean that WiMAX technology will be niche based on size, then there is an element of truth in that since in the end LTE will be bigger because of its massive support amongst mobile operators" and because "the industry expects LTE to be a replacement technology for 2G/3G mobile phones as well."

"The WiMAX market does not have the ambition to be a new mobile phone system", argues Terve. "In terms of pure mobile data technologies for portable laptops and mobile Internet devices," he continues, "the two markets will be more equal, and for the 'Wireless DSL' or CPE market WiMAX will probably be larger".

Last month's Cellular News article, however, contends that most emerging markets WiMAX operators currently have thousands, or tens of thousands of subscribers, rather than the hundreds of thousands of subscribers that they planned to have at this stage. DTW asked Johan Terve to what degree he is concerned by these modest numbers.

"We in the vendor community are always far more optimistic in growth projections than the reality," he answered. "The projections of rolled-out LTE networks and subscribers will most likely have to be revised down in the coming quarters. However, there is a big difference between LTE and WiMAX in that the tier 1 mobile operators already have a huge subscriber base just waiting for more bandwidth [and] disappointed with what the current 3G networks have been able to deliver. This will make the LTE ramp-up quicker than it has been for WiMAX having to deploy from scratch. Essentially all larger WiMAX operators are new to market, including Clearwire, PacketOne, Yota and UQ. None of them have the luxury of just adding WiMAX technology to existing cell towers. Are we concerned about WiMAX? No, we are seeing signs now within our customer and prospects base that things are really starting to move. One encouraging factor is, for instance, one of the largest operators in India that is currently deploying Aptilo’s solution. This type of operator tends to scale very quickly in terms of subscriber growth. As a company, we are continuing our multi-wireless support (currently Wi-Fi and WiMAX) and have added LTE to our roadmap to be able to cater to all the help operators need in managing their mobile data traffic."

Where, then, does Aptilo networks see some of the richest opportunities in Africa and in emerging markets more generally?

"We see the greatest opportunities with existing Internet Service Providers and new greenfield challengers in the first phase," says Johan Terve. "We also see a great opportunity with CDMA mobile operators that have hesitated to deploy EV-DO for broadband data services. Their strategy is to keep developing their voice offering in CDMA and then choose between LTE and WiMAX for data. For them LTE is a heavier fork-lift than for 3G operators and WiMAX has the benefit that it is here now, ready to deploy."

Could Terve point to any specific examples of this particular deployment scenario?

"We are currently working with one of our Caribbean CDMA mobile operator customers that will continue with their CDMA for voice and build their data broadband on WiMAX," he responded.

Aptilo Networks, then, is among those continuing to make positive noises about the value WiMAX may be able to add to the communications landscape of emerging markets and developing countries worldwide. It is likely this theme will be revisited when DTW reports on next year's Africa Com event, and it will be interesting to see how far this view has proven to be accurate by that time.

Aptilo Networks positive about prospects for WiMAX in developing countries

Zain (Africa) Speculation Watch: Episode 13

Anil Ambani, Reliance Communications: eyeing Zain's African operations?

The newswires have been humming with more than enough Zain-related information over the last few days to justify this thirteenth episode of our mini-series following the summertime rumours around the Kuwaiti telecoms firm.

On Sunday, Eman Goma of Reuters reported that the pan-MEA mobile group has asked shareholders to vote on removing certain ownership restrictions, a move that would pave the way for selling a large stake. This seems to have prompted a Sunday surge in Zain's shares on the Kuwaiti stock exchange, as speculation rose that the move could allow an outside investor to take a large stake in the company.

In the most recent chapter of the Zain (Africa) Speculation Watch story, we considered the possible sale of the 24.61% stake in the operator held by the Kuwait Investment Authority (KIA) (the Gulf state’s sovereign wealth fund) - Kuwaiti newspaper al-Rai, had reported that "the KIA has no objection to discussing any offer to buy its stake in Zain whether made by the UAE’s Etisalat or others under the condition that the offer would be serious and with attractive returns."

Without expressing an opinion about possible purchasers of that stake, it now seems that Zain's management would welcome the opportunity to part ways with the KIA. As a Cellular News article reported this week, Zain CEO Saad al-Barrak has said that he wants to see the sovereign wealth fund sell its stake in his company as soon as possible. "I wish they would leave tomorrow, and I am working on this," he said. He added that the motivation was to ensure the company could operate without political interference.

Whatever the future holds for the group as a whole, stories continue to bubble up about Zain's African portfolio. Only yesterday, that man Eman Goma was reporting comments made by Barrak to al-Rai, to the effect that the company is in talks with three major telecoms firms, including one from India, to sell all or part of its African operations.

Which companies are being referred to here? One of them might be France Telecom. Ten days ago we noted here that in a recent Reuters note on the French incumbent telco's need to limit margin erosion, Finance Director Gervais Pellisier was quoted as saying that the company "might look at some of the African assets of Kuwait's Zain if the latter decided to sell them in parts."

What about the unnamed Indian party? Could that be Bharti Airtel? Back in February, I would not have hesitated to offer that name as my best guess. An article by a former colleague of mine, Nick Jotischky of Informa Telecoms & Media, prompted me to write my own piece about whether India's market-leading cellco might be driven to more aggressive international expansion by the numerous competitive pressures it faces in its home market.

Since then, of course, the Indian mobile operator has been involved in lengthy talks with South Africa's MTN group about a possible tie-up between the two. Given the apparent complexity of those discussions, is it naïve of me to assume that simultaneous talks with Zain would not be feasible? After all, my understanding has always been than an exclusivity agreement has been locking Bharti Airtel and MTN out of discussions with other prospective bedfellows. Earlier this month, the Bharti Group announced the extension of this exclusivity period through to 31st August, and the Economic Times has reported in the last few hours that Bharti Airtel is now very close to raising the funds needed for what would India’s biggest cross-border deal to date, surpassing Tata Steel’s acquisition of Corus for USD 12.2 billion in 2007.

Even if it were possible for India's leading mobile operator to discuss any interest in Zain's African assets at the same time as working on its mooted tie up with MTN, another complication would be that the Kuwaiti group and the South African group have somewhat overlapping footprints. The two companies compete with each other in Congo, Ghana, Nigeria, Uganda and Zambia.

As Eman Goma's article noted, this issue of overlapping assets would also have to be taken into account in any approach Etisalat may make for Zain. Goma quotes Prime Holdings analyst Sleiman Aboulhosn, who says that the Emirati group may be content to cherry pick some of Zain's assets in the region, given regulatory restrictions on a wholesale purchase. "Etisalat cannot buy the ones that co-exist with its own assets, for example in Nigeria," he said in Dubai. "So they might be interested in some parts."

If Bharti Airtel is currently an unlikely suitor for Zain, which other Indian companies might be making the enquiry mentioned by Saad al-Barrak? One possible candidate is state-owned telco BSNL. In June, Reuters reported comments made by the company's Chairman, Kuldeep Goyal, who said the the public sector telco is looking to expand to Africa by acquiring new licences or stakes in firms. "We are looking into various options there... getting into new licences, which are being issued, or partnering with existing licencees (and) taking a stake," Goyal told reporters. Asked whether BSNL, which has cash stockpile of more than USD 6 billion, was ready for a big acquisition, he said: "Yes, why not?"

The positive assessment of the state of BSNL is not shared by Kunal Kumar Kundu of consulting and IT services firm InfoSys. In our most recent article here at DTW, I quoted Kundu's recent Asia Times article, which is nothing short of a gloomy assessment of the health of the state-owned operator, which he feels is set to go the way of struggling government-run Air India, "which has had to crawl cap in hand for a state bailout to survive."

If Kundu's analysis is correct, and if this would prevent any ambitious foreign adventures by BSNL (rather than perhaps actually making it imperative to consider them), perhaps Reliance Communications is a more plausible prospective purchaser of some or all of Zain's African assets? Towards the middle of last year, the Anil Dhirubhai Ambani Group-owned operator withdrew from inconclusive talks of its own with MTN. Another Economic Times article written in the last few hours suggest that the Indian operator's interest in Africa has not waned since then. Amrita Nair-Ghaswalla writes that "sources" have named Reliance Communications as the Indian company currently in discussions with Zain.

The last time DTW visited the topic of all this speculation about the future of Zain, much was made of the impresssive performance of the company's stock since the rumour mill really got churning around mid-May. I even considered whispers passed to a loyal DTW reader - and then to me - to the effect that "the whole Zain thing" has merely been a highly successful attempt to manipulate the Kuwaiti group's share price. If there is anything in that suggestion, the success of any such ruse would appear to have come to a halt around a week after we discussed it here, should we choose to heed the warning noises emanating from Dubai-based investment bank Shuaa Capital. Late last week, Ramya Dilip of Reuters noted that the bank had downgraded Zain to "sell" from "neutral," saying the risk-reward profile of the shares were no longer attractive at current levels.

Around the same time, another Reuters piece carried quotes from analysts who could see the logic of selling the African assets and predictions about Zain's ongoing strategy in the wake of any such sale.

"The African operations are the major contribution to the revenues and subscriber base," said Jithesh Gopi, head of research at Bahrain-based Sico Investments. "But as far as net profit ... they have not been a contributor to the group."

According to this article, African markets account for about 62% of Zain's 64.7 million customers, but only 15 % of the group's net profit, as of the end of March. Seven out of 16 African operations, the article states, made a first-quarter net lost. In the Middle East, only the Saudi Arabian operation was loss-making.

"It's going to be a company that's refocused on the Middle East with a series of very strong franchises," said Simon Simonian, a telecom sector analyst at Shuaa Capital.

If Simonian is correct, Zain's growth plans would be downgraded as the majority of the Middle East markets served by the group are mature to the point of saturation, the exceptions being Jordan and Iraq, where operators face security issues, a relatively unpredictable regulatory/licensing environment and the prospect of a new entrant in the mobile space.

In that scenario, Zain would presumably focus primarily on upgrading existing networks and increasing revenues from mobile broadband multimedia services.

Work of this kind is naturally ongoing across the group's Middle Eastern operations. The Saudi opco, for example, last week announced that it had secured a USD 2.5 billion Islamic loan facility (Murabahah), which will be used to repay an existing Murabahah facilitating network expansion and future growth.

In Bahrain meanwhile, writes Roger Field of ITP, Zain is planning to upgrade its network with LTE technology in a bid to "future proof" its operation and gain an advantage over rival operator Batelco and the new entrant cellco owned by Saudi Telecom. Field observes that Zain Bahrain has failed to provide a timeframe for the network upgrade, but notes that similar projects in other parts of the world are expected to take more than a year to complete, from the time they were announced.

This wraps up another episode in this ongoing saga. Perhaps the fact that Zain's own Saad al-Barrak seems to revealing snippets to the Kuwaiti press suggests that the story is moving beyond the speculation stage. Whether this means we can expect to see imminent announcements about the future of Zain and of its African operations remains to be seen. Keep watching.

Zain (Africa) Speculation Watch: Episode 13

WiMAX and 3G trials and tribulations for India's public sector telcos

'India Week' here at DevelopingTelecomsWatch concludes with a round up of views on the prospects for the country's public sector telecoms enterprises.

State-owned telco MTNL is one company somewhat keen to experiment with WiMAX, but is also keen to mitigate the risks and reduce costs through a proposed partnership with another organisation.

Writing for the Economic Times on Saturday, Joji Thomas Philip explains that the public sector operator has invited global telecoms businesses to set up and run its Delhi and Mumbai WiMAX operations on a franchisee basis for a six-year period. If a willing partner is found, MTNL plans to enter into a revenue sharing agreement with the successful bidder. Philip writes that the contract will be reviewed every two years and can be terminated if the franchisee partner does not meet prescribed targets. MTNL wants to work together with the winning bidder when working out strategies for advertising, marketing and promoting the broadband services, and wants those services to carry the MTNL brand. Execution on the sales and market side, along with the business of credit checking customers will be the prime responsibility of the bidder. MTNL, on the other hand, wishes to retain responsibility for fixing tariffs. While there will be room for consulation with its partner, MTNL's word will be final on this issue, the company has said.

How attractive is this opportunity? This may depend on interested parties' views of where WiMAX fits into India's evolving communications landscape. Any prospective bidders who envisage strong demand for a mobile WiMAX service, for example, may encouter words of warning - even from the CEO of the one company already offering WiMAX-based services on a franchisee model.

San Francisco-headquartered Soma Networks, is a supplier of WiMAX base stations, CPE and a multimedia application system designed to provide essential software elements for broadband service providers - support for simultaneous multimedia applications; integration with third-party, IP-based billing and provisioning; interoperability with IMS infrastructures.

A former colleague of mine, Ken Wieland of Informa Telecoms & Media, recently summarised the deal struck between Soma Networks and BSNL, India's other major state-owned telecoms operator back in January 2008. Writing for the telecoms.com portal, Ken notes that BSNL uses Soma Networks as a mobile WiMAX franchisee in the three circles (regions) of Goa, Andhra Pradesh and Maharashtra. Under the franchise arrangement, Ken writes, Soma Networks pays for the WiMAX equipment in exchange for access to BSNL infrastructure (such as tower sites and backhaul facilities). A revenue-sharing deal is also in place as part of the arrangement, with a 70-30 split in favour of the kit-maker.

Soma Networks CEO Yatish Pathak, in an interview with Business Line last month, argued that the mobile WiMAX opportunity in India is probably quite limited, at least in the short term.

"One of the reasons that Soma Networks chose to use WiMAX 802.16e-2005 technology, also called Mobile WiMAX, is that it supports mobile broadband as well as [having] the capability to provide wireless broadband to homes and offices," Pathak told Business Line. "However, its application depends on the context and availability of competing technologies. In an emerging market such as India with vast areas under-served due to lack of wired infrastructure or due to sub-optimal DSL connections, the best use of WiMAX today is to deliver broadband to the homes and businesses that have no broadband, or poor broadband connectivity."

"Using WiMAX as a mobile broadband application is better suited for developed, more mature markets that have high data consumption," Pathak asserted. "Classic examples are Tokyo and Korea."

Pathak can see the business case for broadband service providers opting to use WiMAX to target the Indian laptop user market, saying that "then it will simply be a service such as EV-DO, but with higher data rates." The Soma Networks CEO believes that India's existing mobile operators will continue to evolve their network towards LTE to address their customers' evolving mobile broadband needs. He feels that cellcos might opt for WiMAX deployments in select high traffic business districts and cities to address the enterprise market. However, Pathak does not envisage any Indian MNO deciding to use WiMAX for mobile data on cellphones, arguing that such a service would require the operator to invest in and run two separate networks - an FDD network for 3G and a TDD network for WiMAX. Besides, he continues, the service would require dual mode phones, and the support for two different types of radios would make the handsets cost-prohibitive for Indian consumers, "until there is service acceptance and we see economies of scale."

Soma Networks, is, then, in Pathak's words, currently focused on the delivery of a "broadband data service that optimises the use of bandwidth link to wirelessly deliver a megabit-rate experience within the comforts of a fixed location, such as home or office," notwithstanding the fact that the company's technology, used for rollouts in India for BSNL, "supports mobility even today". It is BSNL's prerogative, Pathak states, to make a decision depending on its business model and strategy on when it wants to extend the mobility features to consumers.

Pathak feels that "going for mobility from day one is a very ambitious plan and requires massive investments." He told Business Line that broadband penetration across the three circles (total population 240 million) served by Soma Networks and BSNL is currently just 0.5%. Even if this rises to 3% over the next three years, he says, we are still talking of very small volumes to justify that kind of investment, given the low ARPU numbers in India.

"In my opinion," Pathak says, "a prudent approach is to focus on Wireless DSL market where there is a huge pent-up demand. This helps us deploy in a scalable manner without making billion dollar investments before any revenue starts accruing. By phasing the rollouts, we lower costs and risks to achieve rapid ROI and then scale up the investments to stitch the coverage areas to offer mobility."

BSNL, however, does not seem to share Mr. Prakha's cautious view about the prospects for mobile WiMAX. Earlier this month, wireless solutions provider Harris Stratex announced an agreement to supply mobile WiMAX technology to the Indian telco. Under the multi-year contract, run the announcement, Harris Stratex will supply its StarMAX™ WiMAX solution to extend BSNL’s public wireless access network to provide high-speed wireless mobility services to enterprise and retail customers in urban areas across the southern Indian state of Kerala, the country's fourth largest telecommunications market. Financial details were not provided in the announcement, but media coverage indicates that this is another franchising model arrangement.

This has presumably not met with the full approval of global trade and standard body the WiMAX Forum, whose regional Honorary Chairman for India, C.S. Rao, in June asked BSNL to avoid further use of the franchisee model.

"While adopting the franchisee model, we feel that BSNL is losing out on the opportunity of racing ahead of the private players in this space," said Rao, who argued that if the state-owned telco deployed networks itself, this would result in revenues amounting to about USD 1.2 billion annually. In the franchisee model, argues Rao, BSNL would only get about USD 500 million per annum.

That public sector telcos BSNL and MTNL are the ones dominating WiMAX news from India at present is due to the period of exclusivity the two organisations have had in this space. As James Middleton, another former Informa Telecoms & Media colleague of mine, observed in February, BSNL also has a first-to-market advantage when it comes to BWA (broadband wireless access) spectrum. While the BWA auctions are scheduled to take place the same time as the 3G licence awards, BSNL is already sitting on a chunk of pan-Indian 20MHz spectrum in the 2.5GHz band, for which it does not have to pay until the auctions take place. BSNL’s 20MHz of BWA spectrum will cost the state-owned operator the same as the highest amount paid for the three remaining 20MHz BWA licences that will be up for auction, two in the 2.3GHz frequency band and another at 2.5GHz. Whether BSNL can be said to have made of the most of this advantageous position seems debatable in light of the low broadband penetration figures and conservative-sounding projections offered by Yatish Pathak of Soma Networks.

BSNL and MTNL have also gained first-to-market advantage in the 3G space, again not having to make payment for spectrum until private sector operators are involved in an auction. As with the BWA auction, and as noted in a Wall Street Journal article today, the two public sector operators will have to pay the Government an amount equal to the highest bid in that auction, the date of which the article only predicts in the vaguest terms, i.e. "later this year."

The state-owned operators may have got into the 3G space ahead of their rival cellcos, but I'm not sure they can be said to have "enjoyed" first-mover advantage. In Tuesday's piece about Mobile Number Portability, we heard from Rajiv Sharma of HSBC Securities, who warned the public sector telcos not to make significant further investments in 3G mobile technology and from Alok Shende of Ascentius Consulting, who believes that the below-industry ARPU recorded by MTNL and BSNL reflects that the companies have attracted price-sensitive, low-MOU subscribers who do not use VAS and do not gain from the enhanced capabilities of a 3G offering. We noted reports that in the six months since its 3G launch, BSNL has acquired just 10,733 subscribers and that the figure for MTNL is said to stand at a mere 902, an average of just 150 per month across Mumbai and Delhi, considered the two most lucrative 3G markets in India.

It is in the context of these extremely modest 3G subscriber numbers that I'd like to consider an Asia Times article written this week by Kunal Kumar Kundu of consulting and IT services firm InfoSys. This - which is a summary of the writer's personal opinions - is nothing short of a withering analysis of BSNL, a company Kundu describes as showing "signs of sickness." Kundu feels that India's largest fixed-line telco looks set to go the way of struggling government-run Air India, "which has had to crawl cap in hand for a state bailout to survive."

For Kundu, "the signs of sickness are all too obvious, led by bloated payroll costs." He states that BSNL's salaries now account for about 25% of revenue, compared with rival Bharti Airtel's 5%, after rising at an compounded rate of 21.5% per annum between the financial years ending March '02 and March '08. Kundu notes that this far outpaces revenue gains, which in the same period increased at a compounded 5.53% per annum. He also argues that only by earning interest in cash kept idle in bank deposits has BSNL kept out of the red, and reports a deterioration in finances in the year to March 2009. Analysts, says Kundu, are forecasting a loss of between around USD 825 million-1.03 billion as salary costs jump by about USD 500 million.

The company, says Kundu, once regarded as one of the Government's crown jewels, is now one of the top candidates for disinvestment this year. He is especially critical of BSNL's performance in the fixed-line space, where "an abominable quality of service and increased options from the private sector have led to a drastic fall in the company's landline subscriptions."

Whether a proposed merger between BSNL and MTNL would cure these ills remains to be seen - and there may be some wait. A week ago, the Business Standard reported that India's Communications and IT Ministry will decide on the merger between the two state-owned telecom companies only after the listing of the former.

"MTNL is a New York Stock Exchange-listed company, and a merger would not be possible without the listing of BSNL. We will first look at listing BSNL and then will decide on the merger," Union Minister of State for Communications and Information Technology Gurudas Kamat said.

WiMAX and 3G trials and tribulations for India's public sector telcos

CDMA alive and well in Nigeria?

ZTE last week announced that its CDMA EV-DO Rev. B solution will be available for commercial deployment in Q3 this year. Kevin Fitchard of Telephony magazine reports that the Chinese vendor claims to have demonstrated the viability of dedicating an entire CDMA network to 3G while still supporting both voice and data. ZTE talks up the advantages of having circuit-switched voice capacity replaced with VoIP, claiming that Rev. B will have both the capacity and low latency to support high volumes of VoIP traffic.

However, as Fitchard notes, CDMA operators are not rushing forward in great numbers to deploy Rev. B, with many of the major players having already committed to deploying LTE networks. Notable, of course, is US giant Verizon Wireless, whose LTE plans are at an advanced stage. Fitchard argues that LTE will not only give CDMA operators the same wide channels as Rev. B, but it is also a more spectrum efficient technology, going on to predict that CDMA operators are likely to bypass Rev. B entirely and focus their broadband strategies on LTE.

None of this is to suggest that the CDMA networks themselves are set to become a thing of the past any time soon. OK, in a recent post here I noted that India's Tata Teleservices (as has been the case with its rival Reliance Communications) is looking to migrate customers from a legacy CDMA to a newer GSM network. I also mentioned the case of major Brazilian cellco Vivo being further down that same migration path. However, I have also written here about new entrant Sistema Shyam Teleservices wanting to acquire other CDMA operators in order to gain better access to the Indian market. In the same article, I noted that the COAI, the Indian GSM operators' trade association, has been protesting about the possibility of being outpaced by CDMA operators in the race to deploy 3G services.

In India at least, there appears to be life in the CDMA camp. Another market where the same can be said would appear to be Nigeria. Some CDMA operators there certainly claim to be in rude health, not least Visafone, a unified service licence holder which had launched commercial services in over forty cities across twelve states, including in the capital Abuja, by early 2008. According to a year-old Global Mobile Daily report, the operator gained its license following its acquisition of CDMA operator Cellcom in June 2007, going on to grow by purchasing further CDMA players Independent Telephone Network and Bourdex Communications in November 2007 and January 2008 respectively. These acquisitions gave Visafone a subscription base of around 100,000. According to an article that I stumbled upon today, the unified service licence held by the company, which was founded by Zenith Bank International CEO Jim Ovia, allows the provision of both mobile fixed telecoms services. This followed the 2006 expiry of a five-year mobile market exlusivity arrangement enjoyed collectively by the country's GSM MNOs.

By July 2008, my former Informa Telecoms & Media colleague Matthew Reed, editor of Middle East and Africa Wireless Analyst, was writing about Nigeria's CDMA operators experiencing "strong growth". Matt noted that the unified licensing system had liberated the CDMA players by enabling them to offer nationwide services, and pointed out that Starcomms, then (and still) the country's biggest CDMA, operator had seen its subscription count grow 125.5% in the twelve month period up to March 2008. Matt also observed that Multilinks, which is controlled by Telkom, South Africa's incumbent wireline operator, had, over the same period, enjoyed at 49.2% rise in its subscription count. Other numbers reported by Matt last summer: Reliance Telecom had recorded growth of 54.84% in the 12 months to end-March, to 430,000 subscriptions, and Intercellular and Visafone had both seen their subs counts more than double over the same period.

Despite these strong growth rates then, as now, the big three GSM MNOs remained much larger players. That notwithstanding, Visafone CEO Thomas Ninan was keen to direct some highly critical comments towards his GSM rivals when profiled by Nigeria's Technology Times in November. Ninan alleged that Nigerian GSM subscribers suffer QoS issues because the operators "commit an inadequate portion of the revenue they yield from the nation’s mobile telephony market on network expansion." According to Ninan, states the article, "in a bid to gain maximum return on their investments, GSM operators only spend a relatively marginal part of their revenue to network expansion, a development that has seen subscribers... suffer... network congestion."

Ninan was quoted as saying that Visafone was "exploiting opportunities created by GSM operators that are short-changing their customers". This particular comment was made in Mauritius, where Ninan was attending the 3rd Global CDMA Operation and Development Forum, hosted by Huawei, Qualcomm and the CDMA Development Group. In that setting, I imagine that Ninan may well have got a fairly sympathetic reception for his strong words.

Ninan feels that the leading GSM players, MTN Nigeria, Zain Nigeria and Globacom have set their tariffs "very high", which opens "more space for price competition."

To some degree, it now seems that the Nigerian Communications Commission concurs with Mr Ninan's view that mobile subscribers in the country could be served better. Last month, Technology Times reported that the NCC has found it necessary to inaugurate a 12-man Industry Consumer Advisory Forum to protect the rights of consumers of telecoms services. Organisations represented on this advisory boady include the Nigerian Society of Engineers, the National Disabled Empowerment Forum, and the Consumer Awareness Organzation. The Association of Telecommunications Companies of Nigeria (ATCON) is also represented, presumably in the interests of balance.

In terms of securing better deals for customers, one area of concern, according to Muhammed Rudman, Managing Director of Nigerian Internet Exchange Point (NIXP), is the high price paid by end users of Internet services. NIXP is a neutral, not-for-profit Internet exchange committed to enhancing the exchange of traffic between networks through co-operative peering agreements. According to another Technology Times report last month, Rudman has urged the Government to mandate all service providers to connect to the nation’s exchange points, adding that a Government-mandated connection rule "is a last-ditch recommendation following the apathy shown by service providers". Rudman feels that all service providers connecting to the nation’s exchange points is a vital component of achieving "technical and economic gains for the Internet community in Nigeria."

In the mobile space, Visafone's Ninan has not been the only highly vocal booster for CDMA technology. Ninan's counterpart at Starcomms is the Lebanese-American Maher Quabain, who, in a March 2008 interview with ITNewsAfrica.com, insisted that CDMA "consistently provides better capacity for voice and data communications than other commercial mobile technologies, allowing more subscribers to connect at any given time."

Perhaps the most bullish words on the subject of the Nigerian CDMA operators' prospects come from Reliance Telecom, whose Executive Vice Chairman Ken Aigbinode, speaking last summer, set his company the target of having acquired 10 million subscribers by 2011. This does, perhaps, look ambitious. The company's subscription numbers surged from 415,000 to 752,000 in the period Dec 2007-Dec 2008, according to Informa's World Cellular Information Service. For me, 10 million still looks like a quite distant milestone. That said, there is room for growth in the Nigerian market. Mobile penetration stands around 40%, and the country currently has a population of around 148 million. However, with no fewer than eleven mobile operators currently competing, and with the GSM players still a long way ahead, I do wonder how far the CDMA MNOs can grow. Of the GSM group, the newest, Etisalat Nigeria, is presumably well-funded, given the deep pockets of its majority shareholder from the UAE.

There are not many markets worldwide still hosting a GSM-CDMA struggle. Nigeria's looks by some measure the most interesting.

CDMA alive and well in Nigeria?

Protectionism and unfair competition in Europe's mobile markets?

As someone used to spending a busy week doing business at the Mobile World Congress, I have spent a little time this week wondering what opportunities I might be missing by not attending this year. Given that I am writing this on a pleasant South Florida morning, looking out at a swimming pool, a line of trees and the St. Lucie River beyond them, it might seem odd that I would spend even a second missing the harsh lighting and the long slog around Barcelona's Fira. Two reports from Spain, however, seem to vindicate my decision to use this short hiatus between one job and another to enjoy a family holiday.

The first comes from Dean Bubley of Disruptive Wireless. Dean highlights a few things he's taking away from this year's MWC, of which I was most interested in the idea of "CTO-to-CFO friction" within mobile operators resulting in revived HSPA+ plans and LTE deployment timelines "being pushed out a bit". Dean also reports detecting less overall pessimism about the economy than he had expected but wonders if that might be "because the real doom-mongers all had their travel expenses cut this year." Interesting though these observations are, the part which made me feel really good about taking a vacation during the cellular sector's annual get-together was Dean awarding a "villains of the year" gong to "the GSMA Stasi demanding photo ID to get into the Fira precincts in the morning." While I daresay I will throw myself back into the MWC fray again in 2010, this is the kind of thing I don't miss.

The other MWC report reaching me here in sunny Palm City, Fla. is the ever-amusing Week in Wireless, penned by the mysterious 'Informer' who observes that attendance was noticeably down on previous years. The Informer’s straw poll of a score or so of exhibitors puts the contraction at an estimated 20-25 per cent. The Informer was intrigued to notice that this year there was no sign of exhibition staff scanning badges at hall entrances, something which has been done in recent years to gauge footfall. The Informer wonders if this was a cost-cutting exercise and reserves judgement about the suggestion made by "one naughty cynic" that not measuring traffic in the exhibition halls simply removes any obligation on the part of the GSMA to report exact figures to exhibitors "in a year where those figures might not have encouraged onsite rebooking." The Informer is quite right to label this a cynical suggestion.

This stuff, as the Informer says, is for the conspiriacy theorists. More important than this, the Informer feels that there was also a lot less news than in years past. This is what makes me feel OK about missing out this time. I daresay the next time I attend the old buzz I know and love will be back.

In my most recent post, I was reflecting on the large population of Polish migrant workers in the UK, something which came up in the context of discussing mobile international money remittance services worldwide. The Informer reports remarks made in Barcelona this week by Chris Bannister, CEO of P4/Play, Poland's newest mobile operator, which has been in business for around two years. Mindful of the significance of this large Polish presence in the UK for his international business, Bannister complained about the serious problems caused by failing to get a roaming agreement with Telefónica-owned O2 UK until only three months ago.

According to the Informer, Bannister also has to contend with mobile number portability taking a whopping 51 days in Poland. The Play CEO says that 15% of his subscribers are former customers of the operator's longer-established rivals. Bannister suggests this figure could double if more effective MNP was introduced. The Informer writes that "the incumbent players, Vodafone (Polkomtel), Orange and T-Mobile (PTC), have no interest in seeing this happen", according to Bannister, who also discussed data roaming rates: he can get Eur 3.75 from T-Mobile (I assume this means T-Mobile Germany) whereas E-Plus will do it for Eur 0.25.

Play is one of the core members of the Mobile Challengers Group, an alliance of third and fourth placed competitors in various European cellular markets. The aim of the group is to challenge the competitive environment of the European mobile industry. One of this association's stated intentions is to create a level playing field for all operators and to provide greater choice and better conditions for consumers.

The Informer writes that five CEOs from the Mobile Challengers Group were on hand in Barcelona to raise their grievances about what they see as the protectionist activities of incumbent carriers. The Informer feels that "the existence of this group reflects the power structure of the GSMA, which is controlled by the largest players" and was told by one employee of one of the member companies, when asked about the Mobile Challengers Group's relations with the GSMA: "they hate us."

The Informer observes that "some might view the challengers’ complaints as sour grapes from carriers that lack the scale to compete with more successful players", but feels that 51 days for MNP in Poland and Mr. Bannister's reported discrepancy in wholesale roaming rates does indeed smack of protectionism.

In addition to all of this, I noticed a few WiMAX stories emanating from Barcelona, some of which have a bearing on the question of how far that technology is set to succeed in emerging markets. I will turn my attention to that next time. For now, I really should get on with enjoying my holiday.

Protectionism and unfair competition in Europe's mobile markets?