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?

CIS: Belarus set for 3G while Ukraine faces delays?

President vs. Prime Minister: 3G licence auctions to be a casualty of political strife?

Political squabbling and paralysed decision-making now looks set to stymie the development of 3G mobile services in of one of Europe's worst-performing economies.

According to a WCIS estimate, there are just 250,000 W-CDMA subscriptions in Ukraine, whose total number of mobile subs stands at around 50.7 million. Just one UMTS licence has so far been awarded in the country, and the very low take-up of 3G services probably has a lot to do with the fact that the lone licensee is not one of the leading mobile operators best-equipped to maximise the value of the technology.

Instead, the single 3G licence was given to state-owned incumbent fixed-line operator Ukrtelecom in late 2005. The use of the word 'given' is quite deliberate here - only one licence was issued and this was handed to Ukrtelecom without a tender, a move which predictably caused consternation on the part of Ukraine's two leading MNOs. It was thought at the time that the point of giving the concession to the public sector telco was to make it a more desirable proposition for potential investors ahead of a planned privatisation. Nearly four years later, Ukrtelecom is still in state hands.

As recently as February this year, the Global Mobile Daily service from Informa Telecoms & Media reported that Turkcell was interested in the Ukrainian incumbent wireline operator. The Turkish cellco has already established a presence in Ukraine via its controlling stake in Life:), the country's third largest mobile operator by subcribers. I have read or heard nothing since then about the Turkish company's plans to purchase Ukrtelecom so I have to assume that this interest came to nothing. Perhaps a well-informed reader could comment.

With Ukrtelecom having failed to make 3G services a truly mass-market proposition, and mobile penetration having passed the 100% mark some time ago, the telco's private sector rivals were presumably looking forward to the opportunity to grow revenues by offering mobile broadband services. The chance to do so, however, now looks in doubt, as Sabina Zawadzki of Reuters wrote last week.

This is because the Ukrainian President, Viktor Yushchenko, has overturned a Government decision to allocate radio spectrum resources for mobile phone network use, thereby casting doubt on a 3G licence tender scheduled for next month.

Things certainly move fast in the East European country. It was only late last month that Ukraine's National Communications Regulatory Commission announced plans to sell a single 3G licence.

The President's decree, referring to the spectrum's use by the military, cited the need to saferguard Ukraine's defensive capabilities.

This could, of course, be a quite genuine concern on the part of Mr. Yushchenko. Those who watch the country's political scene, however, could be forgiven for wondering if the 3G auction might really be a casualty of the poor relations between Yushchenko and Ukraine's Prime Minister, Yulia Tymoshenko, a former ally of the President.

Ms. Tymoshenko and Mr. Yushchenko have not seen eye-to-eye for some time, with their difficult relationship characterised by some uncomfortable clashes. In August 2008, for example, the President's office accused Ms. Tymoshenko of betraying national interests by not backing Georgia in its conflict with Russia. In January this year, when Russian gas reached Europe via Ukraine after a two week interruption of supplies, Yushchenko said the deal clinched by Tymoshenko was a "defeat." Moscow and Kiev had been locked in a prices and debt row that cut supplies to about 20 European countries. As this year unfolded, the Ukrainian Parliament Parliament sacked Foreign Minister Volodymyr Ohryzko, a Yushchenko ally, citing his aggresive stance against Russia, and dismissed another Yushchenko ally, Defence Minister Yuri Yekhanurov, over allegations of corruption in his Ministry.

With this strife in the background, there exist precedents for Mr. Yushchenko blocking proposed transactions favoured by Ms. Tymoshenko's Government. Last month, for example, he halted the privatisation of the Odessa Port plant two weeks before its auction.

Yushchenko and Tymoshenko are both expected to run in a presidential election on 17th January, with polls showing the PM would face former premier Viktor Yanukovich in a second round. Yushchenko's popularity ratings are apparently in single digits.

Perhaps this process will need to play out before Ukraine's mobile operators can expect to get their hands on 3G licences.

MNOs in neighbouring Belarus, meanwhile, have received more positive news about the prospects for mobile broadband there. To date, only second generation mobile services are available from the country's four cellcos. The third-placed player (by market share), BeST, formerly a state-owned company 80% of which was acquired by Turkcell in 2008, in July awarded Chinese vendor ZTE a contract to build a new UMTS network. This followed the allocation of suitable spectrum to BeST by the State Commission for Radio Frequencies (SCRF). Since the takeover by the Turkish MNO, BeST has adopted the same Life:) branding as the Turkcell-controlled operator in Ukraine.

Now, according to the Belarusian Telegraph Agency, a working group for the SCRF is supporting the initiative of the Information Technologies and Communications Ministry to allocate UMTS radio bands to MTS (owned by the giant Russian cellco of the same name) and Velcom, which is controlled by the mobilkom austria group.

My understanding is that both Belarus and Ukraine have the somewhat underdeveloped wireline infrastructure which can offer good opportunities for mobile operators to grow wireless broadband revenues. Whether the economic conditions in both countries will allow for really strong mobile broadband growth, though, remains to be seen. With licensing delays in Ukraine, perhaps it is in Belarus that industry watchers will get the earlier opportunity to track the customer adoption of 3G services in this part of the world.

CIS: Belarus set for 3G while Ukraine faces delays?

Reaching rural communities in Mongolia

According to a Cellular News report this week, Chinese telecoms equipment vendor ZTE has announced the world's first overlay of a W-CDMA network on an existing CDMA service to realise UMTS/CDMA convergence at the core network level.

The customer is Mongolian CDMA MNO Skytel, a joint venture company established by Mongolian and South Korean investors in 1999, the latter including SK Telecom. While this is a global first in terms of the UMTS/CDMA convergence feature, market-leading GSM MNO MobiCom has already launched 3G services, having launched the country's first high-speed mobile broadband network in the country in April, powered by HSPA technology from Ericsson.

Skytel, which has gone on to carve out a 20.08% share of the Mongolian mobile market (by March 2009, according to WCIS), also competes with Unitel (GSM standard) which has rapidly built a 22.01% market share since commencing operations in June 2006. In terms of eroding the market share of its longer-established competitors, the entry of Unitel has made a much bigger impact on MobiCom than on Skytel.

One more operator makes up the quartet of mobile service providers in Mongolia - G-Mobile, which won a Government tender in 2006 specifically to establish a CDMA service to connect rural Mongolians with the country’s main telephone grid. G-Mobile has since established a market share of just 6.25%.

Although Mongolia has become increasingly urbanised in recent years, with about 40% of the population living in the capital city, and a further 23% living in other towns, a significant minority continue to live in extremely small, remote settlements and on a semi-nomadic basis. As demonstrated by the G-Mobile tender, extending communications services to these people is important for the country's telecoms sector as a whole.

With this in mind, MobiCom signed a three-year managed services contract last year with Altobridge, an Irish company which has developed technology designed to minimise backhaul bandwidth utilisation, thereby making the delivery of mobile communications to small, remote communities a more compelling proposition for MNOs. This deployment won an award earlier this year from the country's leading tech publication and the national Information Communication Technology Authority, who wanted to recognise the positive impact the Altobridge solution is having on communities and enterprises in remote parts of Mongolia. The Altobridge CEO Mike Fitzgerald said at the time of the award that he was delighted that MobiCom had received praise for connecting people still cut off from the benefits of mobile communications. He stressed that this was consistent with a for-profit motive for the operator.

I am always encouraged to read of telecoms solutions improving lives in developing countries. Having met a handful of friendly people from Mongolia's operators at conferences, I'll be interested to see what impact Skytel and MobiCom's recently commenced 3G services have - I'm not yet clear if these services will be aimed purely at higher margin urban customer segments or whether a rural 3G services business case has been calculated.

Reaching rural communities in Mongolia

Salty name, sweet subsidies: more on the Venezuelan handset phenomenon

Recently, when I quickly added a short piece here about the low cost handsets launched this month in Venezuela, it seems I left out some interesting details.

The detail that has been grabbing headlines across the UK's mainstream news media is the name given to the device, El Vergatario. Prior to reading these recent stories, I vaguely remembered the name of the phone and even more vaguely recalled reading somewhere that the term meant something like 'the excellent one'. (That's enough vagueness, Ed.*)

So imagine my bemusement at seeing UK newspapers rubbishing the idea that the monicker of this remarkably cheap device is so innocent. Numerous Fleet Street hacks have converged this week on a different understanding of the handset's unusual name, i.e. that it is a freshly coined vulgarism from a Venezuelan city known for its inventive slang. On Monday, the Guardian, to take one example, delighted in presenting President Hugo Chavez as a smirking practitioner of double entendre. "Whoever doesn't have a Vergatario is nothing," said the Venezuelan leader, with the Guardian suggesting that this remark was an off-colour joke.

Word quickly travelled back to Caracas about the Guardian's story. Yesterday the paper was reporting that President Chavez had used a televised speech to rebut the notion that some Venezuelans had been offended by the handset's name:

"In the Guardian they think it's something rude. That is a big mistake. They are ignorant," said Chavez. "He cited the Spanish language reference dictionary, the Real Academia Española, which defined vergatario as an adjective signifying quality and value," reports the UK paper, whose backtracking is slyly qualified by its assertion that "the etymological debate spread to websites today and broke largely along political lines, with Chavez supporters championing the non-vulgar interpretation."

Whatever the case, in the following clip from the President's regular TV show, he does seem to be playing for laughs. My Spanish is far too limited to understand the gags. If anyone wants to post a translation of his words in the comments box, do please go ahead!

All very amusing. Less impactful in terms of making the news, but perhaps of more immediate relevance for readers of this blog (i.e. people working in telecoms in emerging markets) is the question of how Vetelca (the Venezuelan state-ZTE joint venture assembling the phones) is able to put a fully-featured device into the hands of the consumer for just USD15. I daresay the price of the Chinese-made components is not excessive. Good old handset subsidies, however, perhaps play an even more important role in arriving at the low retail price of the phone. As the original Guardian article on the device noted, "a government subsidy which cut the retail price to a quarter of the manufacturing cost is likely to make the Vergatario an immediate hit."

It might therefore be more apt to call El Vergatario a low price handset than to call it a low cost handset.

-------------------------------------
* apologies to Private Eye

Salty name, sweet subsidies: more on the Venezuelan handset phenomenon

Chavez unveils super low-cost mobile phone

In early March, I seemed to amuse a couple of regular visitors to this blog with my jocularly-titled discussion of the telecoms sector of a selection of countries with left-of-centre regimes.

One stop on that tour was Venezuela, whose state-owned cellco Movilnet was set to launch a low-cost mobile phone on the local market.

The launch date for this handset is coming up soon. Very soon. Tomorrow, in fact, according to a recent TelecomPaper article. So you'd better get yourself to Caracas sharpish if you fancy one.

Unveiled (see pic) by Hugo Chavez himself, the new C366 El Vergatario is the first mobile phone to be built on Venezuelan soil. Produced in partnership with ZTE of China, the phone will feature MP3 playback, FM radio, and a camera.

Chavez unveils super low-cost mobile phone

Mobile content in emerging markets: Which services offer the best prospects?

In a former role, I hosted a number of conferences and discussion events with a mobile content focus. More times than I care to remember, I grinned politely at the well-worn joke that 3G stood for Girls, Gambling and Games. The premise, of course, was that three areas stood out as being likely to generate decent revenues for anyone involved in the mobile content value chain.

Looking back, it now seems strange that these product areas were emphasised more than, say, mobile music services. My understanding is that while mobile gaming continue to be an important output of the wider mobile entertainment industry, in terms of revenues generated music is a much bigger deal. Gambling, too, continues to account for quite a small portion of overall mobile data revenue. In 2008, my understanding is the global revenue from mobile gambling services was around USD 200 million - vs. USD 10.1 billion for music services.

I always took the 'girls' referred to in the joke about 3G to be the kind of girls prepared to make their living through the provision of adult content. This segment is, of course, not to everyone's taste but I hear that the wider adult entertainment business looks set to be quite recession-proof. While mobile content value chain participants do make money in this space, writers of reports on mobile VAS seem to struggle to provide exact revenue figures and forecasts. This is because adult content revenues seem to be split by format (video, wallpapers etc.) and amalgamated into other categories. I assume this is due to a keenness for big brands not to be too closely associated with something that many customers will always see as morally dubious - while at the same time making money from it. I daresay significant sums change hands, but it seems a little bit tricky to know how much.

It's not something I've studied closely, but I've always assumed that the added value in specifically mobile content lies in... er... mobility, i.e. that the content is deliverable anywhere, anytime to the user's eyeball. This advantage around immediacy and availability was, I thought, why users would tolerate the limitations of the mobile phone form factor, i.e. a very small screen and, until fairly recently, annoyingly slow connection speeds. My own mobile content use is pretty much limited to catching up with real time football (soccer) scores when I am not near a PC or TV. While I am perfectly happy to do that in a public place such as on a train or in a cafe, I can't help noticing that people near me sometimes like to have a crafty glance at the screen to see what I'm up to - much as commuters peek at one another's newspapers. Were I in the market for adult content, I think I'd be a bit concerned about getting caught in flagrante by some curious member of the public. This seems like an inhibitor to revenue growth to me, but maybe I'm unusually squeamish or self-conscious.

It seems fair to assume that the kinds of mobile content likely to gain traction vary across world regions, in line with factors such as disposable income and cultural norms. With reference to the latter, gambling and adult content, particularly, are never going to fly in territories where they are prohibited by law. Even where that is not the case, the mobile VAS space is bound to look a little different from country to country.

The vast, growing Indian market is an interesting example. On a visit to Mumbai in 2007 I was told that the mobile content industry there is all about ABC - astrology, Bollywood and cricket: a trilogy of national obsessions. A company which seems to have taken this on board is Nokia, which started to get more deeply involved in the Indian market early last year by customising its Ovi-branded offering in line with these obsessions.

The international potential of Bollywood is being stifled by "the hefty upfront fees expected by local license holders and the questionable origin of much of the content", according to Informa's Ronan Shields, writing in Mobile Media late last year. Shields notes that "many players in the mobile industry are eager to export this content to the massive number of South Asians living in Africa, the Middle East, North America and Western Europe and offer it on phones in the form of wallpapers, ring tones and video clips." The article contends that the development of a truly international market for the content is being hampered by a handful of India-based licence holders that "are often loath to loosen their grip". According to Shields, this handful includes one particularly powerful player: "digital-content giant Hungama alone holds licenses for 70% of all Bollywood content, according to sources."

In terms of services which sell well within India, a good chunk of the action seems to be in ringback tones - and more revenue potential from this kind of product might lie in other emerging markets. Mindful of this, Vodafone has, according to a recent Cellular News story, signed a deal with India's OnMobile to offer ringback tones across a number of territories. ­"Currently," states the article, "millions of Vodafone Essar customers in India use OnMobile's ring back tone service, which will be rolled out across Vodafone’s other emerging markets from the Spring."

Another sort of service tipped by some to do well in emerging markets is mobile social networking. A Mobile Media article written in Q2 of last year, for example, says that "even as cellcos in developed markets struggle to make money from such services," their counterparts in developing countries are "desperate" for a piece of the action.

In January, while still working with Informa Telecoms & Media, I was invited to make a presentation at a Mobile Monday Istanbul meeting. Offered a few choices of themes on which I felt I could speak, the organiser chose mobile social networking. Drawing on a related Informa report, I shared the view that vastly lower levels of PC and fixed broadband penetration might make specifically mobile networking services grow well in emerging markets. Had I spotted the Mobile Media article before heading for Turkey, I might have added the point made there that while MNOs in the developed world are "fearful of introducing advertising" (the business model upon which social networks depend), "the low profit margins for mobile data services in emerging markets mean that cellcos there are more open to the idea of supplementing their earnings with other sources of revenue, such as advertising." David Dew, CTO of messaging-software company Critical Path, which is branching out into social networking, is quoted as saying that cellcos in price-sensitive emerging markets are less wary of the perceived intrusiveness of mobile advertising, since users there welcome the opportunity to receive discounts and other special offers from brands.

Ringback tones and social networking as hot tips for mobile VAS in emerging markets, then. Is there, however, a good level of solvent demand? In the Cellular News article, a Vodafone spokesman is quoted as saying that ringback tones are an "affordable" way of personalising a mobile device - but in the context of emering markets, what does "affordable" really mean?

Writing in Mobile Media earlier this year, Informa's Guillermo Escofet notes that in relation to the average user's spending power, India has the least affordable mobile content of sixteeen countries surveyed. In the case of mobile games, writes Escofet, "although India is where the cheapest mobile games can be bought on-portal, at US$1.03 each, it is also where they are most expensive in relation to per capita income – even when weighed against the US$9.64 charged by Vodafone Germany, at the other end of the spectrum."

"With a mobile game in India costing most of what the average Indian earns in a day", asserts Escofet, "it could be argued that the market for such products is largely confined to the country's middle- and upper-class minority. The same could be said for other emerging markets."

Perhaps with this in mind, companies such as Nokia have dedicated part of their efforts to the development of services which offer less affluent subscribers much more practical benefits. A Mobile Handset Analyst article written in November describes the Finnish handset vendor's unveiled introduction of seven low-cost handsets equipped with features developed for users in rural communities, "in keeping with its new business model of bundling services with the appropriate devices." According to the article, this has been driven by the company's desire not to compete for a greater share of emerging-market sales "by lowering prices, as Samsung and ZTE have done."

The competition for emerging markets is heating up, contends the article "because the already long handset-replacement cycles in developed markets are being extended by the economic crisis." In this context, Nokia, states the article, "is eager to identify the software and services that will provide it with new revenue streams and protect its share in certain markets." An unnamed Nokia spokesperson is quoted as saying that the company's Mail on Ovi service will give "millions of users the possibility to create their first Internet identity and communicate in new ways." Global Crown Capital analyst Tero Kuittinen is quoted as saying it will serve as "a firewall aimed at preventing BlackBerry from migrating into low-end business and emerging markets.

Despite the global economic downturn, mobile content/VAS in emerging markets seem to present operators, handset vendors and others with some interesting opportunities. I'd be interested to know which of entertainment services and more practical applications is the hotter tip.

Mobile content in emerging markets: Which services offer the best prospects?

Adventures in telecoms socialism

In January, writing an article for the Com World Series blog, I discussed the links apparently being formed across Latin America by state-owned telecoms operators from countries with left-of-centre governments. The starting point was the news that Venezuelan incumbent telco CANTV was considering a strategic partnership with Ecuador's beleagured CDMA MNO Alegro PCS. I mentioned my own enjoyable trip to Caracas in April 2008, during which I had the opportunity to visit CANTV HQ. The operator had been renationalised by President Hugo Chávez in 2007. The external affairs representative whom I met was keen to tell me about how the organisation was looking to develop partnerships with telcos in politically sympathetic states such as Cuba and Nicaragua.

At that point, I was only aware of Latin America as an arena in which state-owned telecoms service providers from countries with left-leaning governments might look specifically to markets run by political fellow travellers for new opportunities.

Last month, however, I learned from a brief Global Mobile Daily report that Vietnamese operator Viettel, owned by the nation's military, has selected Huawei and Ericsson to provide equipment for expanding its networks overseas into North Korea, Cuba, and Venezuela. The report notes that the operator has yet to enter any of these markets, and states that, according to Viettel Deputy Director Tran Phuoc Minh, discussions are planned with telecoms authorities in each country.

This is just the latest move in an international expansion strategy with which Viettel has already made progress. Last month, Viettel's subsidiary in Cambodia, using the Metfone brand, officially launched mobile services. The unit is said to have over 1000 base stations supported by a 5000km fibre-optic network linking all provinces in Cambodia. The new operation reportedly attracted 500,000 subscribers in its first three months of trial services. A Saigon Times article on the operator's foray into neighbouring Cambodia indicates that the new cellco will target low-income subscribers with a wide range of low-priced services and packages. Viettel Deputy General Director Nguyen Manh Hung is quoted as saying that this approach is not only about customer acquisition but is also intended to "contribute to society".

Viettel, the article states, also announced the provision of free Internet services for nearly 1000 Cambodian schools within the next five years. Rural rollout seems to be high on the Metfone agenda, with the operating planning to "extend its coverage to Cambodia’s remote villages and islands."

Meanwhile in Venezuela, CANTV's mobile arm Movilnet is set to launch a low-cost mobile phone on the local market. A Telecompaper report this Thursday states that the device, dubbed 'El Vergatario' is the first mobile handset produced in the country. According to Movilnet President Jacqueline Faria the device will be the cheapest available in Venezuela. To be launched for Mother's Day in May, the CDMA phone will be available for VEF 30 (USD 13.95). El Vergatario will be produced at the Venezuelan Telecommunications Factory (Vetelca), a joint stock company, in which the Venezuelan state holds an 85% stake, with the remaining 15% owned by ZTE. The article suggests that Vetelca hopes to sell around 600,000 Vergatarios this year.

Movilnet's subscribers seem to be a remarkably loyal bunch and the country's mobile market overall is one in which the three competitors' share of the subscriber base has remained largely unchanged for some time. Movilnet's competitors have not remained complacent. Movistar Venezuela has been steadily migrating customers from a legacy CDMA to a newer GSM network since March 2007 and has more recently launched W-CDMA services. Digitel, owned by Venezuelan businessman Oswaldo Cisneros, is also working to roll out 3G services in two stages, starting this month, according to local news portal Ciberespacio. The operator currently offers Huawei USB modems and by mid-2009 will integrate voice and data services.

OK, comrades. That's all I have on telecom-socialism for now.

Adventures in telecoms socialism

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?

Views from MWC: WiMAX to gain traction in emerging markets?

I recently discussed here the relative merits of and prospects for 3.5G mobile and WiMAX networks in India. A number of news items emanating from this week's Mobile World Congress prompt me to widen the discussion out to the question of how much traction WiMAX backers can expect the technology to gain in emerging markets worldwide.

The first of these items comes courtesy of the telecoms.com, whose correspondent caught up with Wei Yuan, Senior Director of Global Marketing for ZTE in Barcelona. "We anticipate a boom in WiMAX take-up for fixed applications in emerging markets this year," says Wei Yuan, who believes that Russia, the CIS, the Middle East and Africa hold out the best prospects for WiMAX growth for the Chinese telecommunications equipment and network solutions firm.

In terms of serving mobile operators, Wei Yuan believes the '4G' market share will be 80/20 in LTE's favour, but feels that the WiMAX opportunity is still a sizeable one, especially in light of recent announcements by Alcatel-Lucent and troubled Nortel that they are no longer focusing on WiMAX mobility. The article adds weight to this last point, noting that ZTE's WiMAX momentum is highlighted by In-Stat, a market research firm whose recent report states that out of the 94 new WiMAX 16e commercial networks deployed last year, ZTE had 15 of them or 16% of all the networks established worldwide. This apparently sets the Chinese company among the top two WiMAX equipment vendors in 2008. According to the telecoms.com article, the report goes on to say that with ZTE's industry-proven WiMAX terminal solutions and a significant number of commercial WiMAX networks the company is planning to install in the years to come, "there is a high probability that the company can assume the number one spot as WiMAX equipment vendor worldwide."

Just before the Congress, Sean Maloney, Chief Sales and Marketing Officer of Intel provided an update on recent WiMAX developments, a summary of which you can read at WiMAX.com. "WiMAX is a global story," said Maloney. "The technology is real, here today and has a 2-3 year advantage over other competing technologies."

What stood out for me was Maloney insisting that big deployments in the most highly developed markets are only part of the WiMAX picture. "Too much focus has been placed on developments in the US and Clearwire," said Maloney. "This is a global story; to understand how it is doing you must take a global perspective. From the very beginning, we wanted to have a global, ultra-fast, low-cost wireless internet solution that would help bridge the digital divide and last mile."

Maloney flagged up some of the more notable deployments, including Scartel and Comstar launching services in Russia with up to 10Mbs performance. For Intel, Moscow and St. Petersburg have leapfrogged 3G services to 4G. In the case of the Russian capital, I wonder how damaging this will be for the country's three leading mobile operators MTS, Vimplecom and MegaFon, which have all rolled out 3G services in major cities except Moscow. There have been long delays with the the Russian military freeing up UMTS frequencies and I have discussed here in previous posts the argument that this frustrating 3G launch delay in the country's most lucrative market has created a window of opportunity for the likes of Scartel and Comstar. In the case of the latter, however, it is worth mentioning that the Comstar-UTS group, a leading provider of integrated telecommunication solutions in Moscow and other cities, is controlled by Sistema, which is also the parent company of mobile market leader MTS.

Scartel, says the WiMAX.com article, plans services in over 40 Russian cities and launched the world's first GSM/WiMAX phone with HTC. This has not remained the sole GSM/WiMAX device on the market for very long. WiMAX.com reported on Tuesday this week that Quantum Telecom had unveiled at the Mobile World Congress in its first Ultra Low Cost GSM-WiMAX handset. I assume this is aimed primarily at emerging markets.

Other emerging markets and middle income countries which have seen WiMAX deployments include:

• Pakistan, where Wateen Telecom has launched the largest WiMAX network in the world covering 26 cities with plans to grow to over 70 cities; mobile operator Mobilink also launched WiMAX services in August 2008.
• Venezuela, where MobileMax has deployed WiMAX in Caracas in June 2008 with up to 20K users
• Brazil, where Embratel, part of Telmex, is operating a WiMAX network covering over 20 cities

It will be interesting to see which emerging markets are home to further WiMAX deployments. I know less about developments in Africa and SE Asia, but Intel and ZTE certainly seem to be vocal, powerful backers of WiMAX as a useful option for service providers in developing countries.

Views from MWC: WiMAX to gain traction in emerging markets?