Telecoms operators in developing countries are always owned by telcos from richer nations and never the other way round... right?

Bouygues Telecom: eyed by Egypt's Orascom

While the focus DevelopingTelecomsWatch is generally on communications sector businesses in emerging markets and developing countries, a battle between incumbent mobile operators and a proposed new entrant in Canada has been covered here of late.

While events in the vast North American country are clearly beyond the usual remit of this blog, two factors go some way towards justifying the interest of DTW in this particular story.

The first of these is possibly a bit frivolous - simply the observation that despite Canada's G8 membership and status as one of the world's most affluent countries, its mobile communications industry lags behind that of many far less wealthy countries in terms of market penetration. The second factor which justifies spending some time on this story is the fact that the wannabe new cellco in Canada has its roots in Egypt and is affiliated with that country's first multinational corporation. That Egyptian company, Orascom Telecom, has built a global business across a number of developing countries, including Pakistan, Bangladesh, Algeria and Zimbabwe.

I remember sitting in the auditorium at the 3GSM World Congress in 2007 and smiling at the rather direct language used by Orascom Telecom supremo Naguib Sawiris. As Richard Wray of the Guardian also noted a the time, the opening speeches (including those from Orange's then-CEO Sanjiv Ajuha and Vodafone's then-CEO Arun Sarin) were somewhat in line with what conference veterans have come to expect - carefully prepared, lots of positive stuff about mobile communications enriching consumers' lives.

Sawiris eschewed this kind of talk altogether, preferring to announce that he was in the business for the money. While this element of the Egyptian tycoon's speech is what stood out for Richard Wray, it is another remark that interested me and which has informed my thinking about the telecoms sector. Sawiris smiled about three giant multinational mobile groups being represented on stage at the World Congress by two Indians and an Egyptian. The point, I think, was to illustrate the shift of this industry's centre of gravity southwards and eastwards from the developed economies of Europe and North America.

Having grown up with the comfortable notion of European and American countries building operations in developing countries and extracting profits therefrom, it has been interesting to watch Orascom Telecom working in the opposite direction. Weather Investments, an investment vehicle controlled by Sawiris, holds more than 50% of Orascom Telecom, and also owns Italy's Wind Telecomunicazioni and Wind Hellas of Greece.

The current attempt to shake up the telecoms sector of a highly developed economy like Canada is, then, not without precedent for Sawiris.

In Canada, however, as noted here before, however, there is fierce resistance to the arrival of Wind Mobile. For now, the prospect of a commercial launch has been stymied by a Canadian Radio-television and Telecommunications Commission ruling that the company in breach of rules on foreign ownership and control.

Today, in response to this setback, Wind Mobile has launched a campaign "geared at letting Canadians know that when it comes to wireless service, they deserve more." The goal of the campaign, runs the company's press release, "is to raise awareness about the current state of Canada's wireless industry compared to the rest of the world, and to highlight why more choice is essential."

"The heart of the issue is that Canadians pay some of the highest rates for some of the most complained-about wireless service in the world," said Anthony Lacavera, Chairman of Wind Mobile. "This campaign is about focusing the conversation to the need for real wireless competition in Canada in order to lower prices, increase penetration and finally deliver the kind of customer service that has been sorely lacking for Canadians."

Others in Canada, however, have expressed the opinion that while Orascom Telecom has probably been treated unfairly, and while the country's rules on foreign investment urgently need changing, it would be a mistake to allow Wind Mobile to take part in the Canadian market because the other players in the market have to follow the current rules, so the Orascom Telecom-backed company should as well. This is the view outlined in an editorial piece in yesterday's Globe & Mail.

As stated the last time DTW visited this dispute, more twists and turns seem likely. We will continue to watch developments with interest.

In the meantime, Mr. Sawiris has expressed an interest in participating in the telecoms market of another developed economy. TeleGeography reports that the Orascom Telecom Chairman is eyeing France's Bouygues Telecom. A tie-up with the French operator would make sense the said an anonymous Orascom official, adding: "It would reinforce our presence in the Mediterranean, improve our roaming possibilities, there would be many synergies." Watch this space. Will Egypt's Sawiris continue to make inroads into Europe's highly developed and competitive telecoms markets?

Telecoms operators in developing countries are always owned by telcos from richer nations and never the other way round... right?

Zain Africa Speculation Watch: Episode 6

For an entity supposedly up for sale and coveted by a wide variety of interested parties, Zain's African unit has certainly been very busy creating new partnerships and gaining publicity for its various activities.

One example of this, brought to my attention by TelecomPaper this week, is the operator's cooperation with Western Union, whereby the two organisations will work together to deliver mobile money transfer services in countries in Africa and the Middle East through Zain's new Zap platform. The service enables Zain subscribers to manage their bank accounts, top up mobile airtime (and transfer airtime to other subscribers), pay utility bills, pay for goods in retail outlets, and transfer money to friends and family.

The opportunity around providing financial services to the unbanked in Africa and in developing countries worldwide is a certainly a rich one. At the Mobile World Congress in Barcelona earlier this year, GSM Association CEO Rob Conway observed that "there are over one billion people in emerging markets today who don’t have a bank account but do have a mobile phone." Conway feels that mobile operators "are perfectly placed to bring mobile financial services to this largely untapped consumer base" and that "mobile money for the unbanked has the potential to become a USD 5 billion market opportunity over the next three years."

Conway was speaking during an announcement made jointly with the Bill & Melinda Gates Foundation, which provided a USD 12.5 million grant to the Mobile Money for the Unbanked (MMU) programme, the aim of which is to "encourage the expansion of reliable, affordable mobile financial services to the unbanked."

With Rob Conway having set out the scale of the opportunity for MNOs, the Foundation's Bob Christen was keen to stress the humanitarian benefits, noting that "technology like mobile phones is making it possible to bring low-cost, high-quality financial services to millions of people in the developing world so they can manage life’s risks and build financial security."

Mobile financial services then, should surely be a vital component of the strategy of any telecoms group whose operations are, in large part, in developing countries - a nice revenue opportunity plus wonderful CSR benefits around poverty alleviation.

Setting up services of this kind, however, can be challenging. The last time I heard this discussed at a conference (East Africa Com in Kenya this April), delegates were asking questions about regulatory complexity and about to what degree securing the necessary participation of established financial institutions was going smoothly.

Bearing this in mind, it is perhaps worth noting that while Zain's announced partnership with Western Union sounds exciting, much of the text refers to this being a work in progress - not yet fully operational and subject to regulatory clearance in countries worldwide.

This leads me to wonder whether it would be sensible to dedicate considerable efforts to this venture if up to sixteen of the operations in which the service will work are really to be sold in the near future.

Another initiative possibly set to do wonders for Zain's image as an organisation committed to improving lives in Africa was announced only days ago. Dubbed "Weather Info for All", this involves Zain, Ericsson, the Global Humanitarian Forum and the World Meteorological Organization. The aim is to "radically improve Africa’s weather monitoring network in the face of the growing impact of climate change," which is said to be responsible for some 300,000 deaths worldwide each year and over USD 100 billion of economic losses, mainly because of shocks to health and agricultural productivity. As the Weather Info for All announcement indicates, "Sub-Saharan Africa accounts for close to a quarter of these losses, and is the region at the most immediate risk of droughts and floods."

Africa suffers not only from the effects of these adverse weather conditions, but also from a dearth of reliable information about when and where disaster is likely to strike. This is due to the continent having a weather monitoring network eight times below the WMO minimum recommended standard, and less than 200 weather stations that meet WMO observation requirements, compared to several thousand each in Europe, North America, and parts of Asia.

The Weather Info for All initiative is aimed at adding 5000 weather stations across Africa. Zain has got the ball rolling by providing access to tower sites in Kenya, Tanzania and Uganda.

Mobile network infrastructure provides an unrivaled wealth of support for weather stations - connectivity, power supply and security.

Ericsson, meanwhile, will develop mobile applications to help communicate weather information via mobile phones to the vulnerable communities whose lives can be wrecked by adverse conditions.

I know less about the levels of investment and commitment required of Zain with regard to the Weather for All Initiative than I do about the amount of hard work needed to roll out mobile financial services for the unbanked. Both initiatives, however, have in common a sense of being long term endeavours. Again, I ask whether all of this activity might suggest that the sale of Zain's African operations is rather unlikely.

Zain Africa Speculation Watch: Episode 6

Donate your unwanted cellphones and do some good

One of my favourite blogs is the kiwanja.net offering from Ken Banks of FrontlineSMS and nGOmobile fame. Ken, whom I once had the pleasure of meeting very briefly at the Mobile World Congress, devotes himself to the application of mobile technology for positive social and environmental change in the developing world, having worked on projects with these aims in Africa for the last 15 years.

Of the various initiatives in which Ken has taken a leading role, FrontlineSMS may be the one with which readers of this blog might be most familiar. For those who are not - this is free software that turns a laptop and a cellphone into a central communications hub, enabling users to send and receive text messages with large groups of people through mobile phones.

One group to have taken advantage of this solution is FrontlineSMS:Medic, a team committed to supporting community health workers in the developing world using mobile technology. In Ken's latest blog post today, he talks about the launch of the FrontlineSMS:Medic team's HopePhones initiative, which is about encouraging people to donate unwanted devices for resuse by community health care workers in developing countries.

Those donating phones have the postage covered (if posted within the USA) and collection centres are being setting up across the US. This looks easy, compelling and worthwhile for US residents. If you're not in the US, you may know of an initiative closer to home. If so, do let me know via the comments function on this blog. I'll happily promote.

Donate your unwanted cellphones and do some good

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?

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?

Emerging markets to get a deserved look in at a downturn-themed Mobile World Congress

An averagely busy life does not allow for blog entries as long as novellas. I also doubt that posts as long as that would be read from start to finish by equally busy readers. Some topics, though, are worth exploring at length, and I was conscious yesterday of having downed tools before getting close to sharing more than a tiny fraction of what I've learned about the theme I was discussing - how successfully the telecoms sector is reconciling its for-profit commercial imperatives with a desire to improve the lives of poor people in developing countries. What follows today, therefore, is a little more exploration of this broad topic.

A company which got a mention here yesterday was Grameenphone, the cellco which owns the largest share of the mobile market in Bangladesh - 46.75% by December 2008, according to Informa Telecoms & Media's World Cellular Information Service. We considered the idea that the MNO's owners, Telenor and Grameen Telecom, have been at odds, with Muhammad Yunus, the Nobel Laureate behind the Grameen family of companies apparently claiming that Telenor's need to build shareholder value has not always sat comfortably with the social and non-profit agenda of its Bangladeshi partners.

For many, I will be rehashing a very familiar story as I take a look at the form this agenda has taken. Some readers may know the story less well and not be fully aware of how cellcos elsewhere in the world have been inspired by Grameen Telecom/Grameenphone initiatives. The tale is one of my favourite examples of the telecoms industry changing lives for the better so I will indulge myself by repeating it, hoping that there is something new here for at least one reader of this blog.

The most famous Grameen Telecom/Grameenphone project must be Village Phone, an inititative which provides telecoms services to underprivileged people in rural Bangladesh. Prospective Village Phone subscribers must first become members of Grameen Bank and take out a small loan. This loan is then used to purchase a handset and SIM card. Once given a phone, the subscriber is encouraged to provide services to people in the adjoining area. In this way, the borrower repays the debt to the bank and earns a profit. In 2006, I welcomed a representative of Grameen Telecom to a conference I hosted in Dubai. Participants watched a moving video which showed how the Village Phone project was transforming the lives of poor Bangladeshi villages, mostly women.

This model has been replicated elsewhere in Asia and also in Africa. I think the most recent example is that of the Village Phone project launched in Indonesia by the Grameen Foundation, Qualcomm and Bakrie Telecom, a CDMA WLL operator that is seeking to establish a national presence with its Esia brand.

In July 2008, Global Mobile Daily reported on the project, whose name, 'Uber ESIA', means 'joint cooperation' in the Indonesian language, and which is aimed at delivering affordable access to remote rural areas using 3G CDMA technology. Similar to the original Bangladeshi model, the plan is to work with local Indonesian microfinance institutions to enable clients to borrow sums needed to purchase a Village Phone 'business in a box' consisting of a mobile 3G CDMA-based device and charger, marketing materials, tariff posters, business cards and training materials.

Earlier examples of the Village Phone model being exported are those of the Grameen Foundation's collaboration with MTN's Ugandan subsidiary (launched in 2003) and with MTN Rwanda (launched in 2006).

This clip (in Dutch, with English subtitles) tells the story of the Ugandan initiative:



Qualcomm's involvement in the Indonesian Village Phone project is further evidence to support a point made in yesterday's post - that telecoms operators are not the only communications services ecosystem participants which can support initiatives designed to improve the lives of poor people in emerging markets.

Another example of this is the 'Village Connection' system developed by Nokia Siemens Networks. I remember this being discussed in an email-only publication to which I was once a regular contributor, the weekly 'Telecoms Vision' newsletter associated with the Informa Telecoms & Media Com World Series. In February last year, this carried an article based on an interview with Rauno Granath, NSN's Head of New Growth Markets. Granath explained that the Village Connection solution, which is comprised of GSM access points located in villages, connected via IP links to regional access centres, was "carrying live traffic in many villages in India." The article stated that the system lends itself to new business models such as operators potentially franchising parts of their business to local village entrepreneurs.

Granath was keen, however, for NSN not to be prescriptive about business models, saying "the Village Connection solution enables new thinking in sharing the responsibilities as well as the business between the new stakeholders, but it doesn't mandate it. I would expect to see a whole variety of ways of working." The article suggested that as different business models emerge, so too could different operator approaches to charging, and went on to discuss other offerings in the NSN portfolio designed to make taking on new subscribers even more viable. An example given was that of improved radio performance and planning through which it becomes possible to allow a reduction in sites, saving money on hardware and, in isolated areas, on power. Also discussed were further ways of reducing power consumption, and thus the Total Cost of Ownership (TCO) for prospective new subscribers from among the poor of the developing world. These included base stations that can work without air conditioning and combined solar and wind power systems.

Another efficiency measure discussed by Granath concerned airtime distribution purely on an SMS basis rather than scratch cards. "It sounds trivial," said Granath, "but when we think about the tens or hundreds of millions of vouchers that operators need to distribute throughout their subscriber base every year, it starts to get big effects."

The article made the point that these are all admirable attempts to make supplying services to rural populations viable but asked the question of whether such potential subscriber additions are really worth the effort for operators. Granath was adamant that "there is still a lot of pure business sense for operators to reach the rural areas, particularly in markets like India where even the rural population is dense." Apart from which, it may be unavoidable if, as Granath pointed out, universal service obligations are imposed by governments.

For more on the Nokia Siemens Networks view on extending service availability in emerging markets, I would heartily recommend a look at the latest edition of the company's Expanding Horizons newsletter. With an editorial co-authored by Rauno Granath, this is a useful round up not only of NSN's activities in this field, but also related material such as an interview with Gabriel Solomon of the GSM Association, who worries that high taxes on mobile communications are threatening to suppress economic and social development in sub-Saharan Africa.

As I continue to tease former colleagues at Informa Telecoms & Media whose Facebook status updates suggest they are gearing up for a week of very hard work at the Mobile World Congress (while I head off for a family holiday in Florida), I was pleased to note that a senior figure at the company is predicting that the effects of the economic downturn notwithstanding, emerging markets will get a look in during the various conference sessions and workshops and in the countless discussions between individual participants.

Mark Newman, the business information and events firm's Chief Research Officer begins his preview of this year's Barcelona show by asking how how exhibiting vendors "can... showcase new mobile Internet devices, mobile applications and next generation mobile broadband network technology while at the same time satisfy[ing] operators' overriding single objective in 2009 - cutting costs as the mobile industry faces up to the global economic downturn."

All very austere. Almost as harsh as my wife returning from a lunch with friends today and sharing with me the news that several people present have either been made redundant or are expecting the axe to fall very soon.

My own view of the downturn, however, is to be grateful for the fact that however long or deep this recession proves to be, none of us living in the developed economies of Europe or North America will experience the levels of absolute poverty suffered by people in what we call emerging markets. I was therefore heartened by the final comment of Mark's MWC preview: "Growth potential in emerging markets has been a regular theme over the last few years and will remain so at this year's event". For me, that's exactly as it should be, especially if we take the view that telcos and vendors making a profit in developing economies is compatible with improved lives for the poor.

Emerging markets to get a deserved look in at a downturn-themed Mobile World Congress

Mobile price wars in the downturn: time to do battle?

Still reeling from the roaming bill I racked up on my last trip to the UAE in December, I was interested to see the Dubai Chronicle reporting a big cut in international calling prices on the part of Emirates Integrated Telecommunications Company, better known as Du.

For the first time, Du's prepaid customers can now use a AED 200 recharge card and receive AED 320 credit to towards international calling. Other Du recharge card denominations of AED 100, AED 50 and AED 20 will provide instant credits of AED 150, AED 70 and AED 26 respectively, to be used towards international calling.

Farid Faraidooni, EVP Commercial at Du says: "Every dirham counts, and more so in the case of the UAE, with a large expatriate population with the need to stay in touch with their loved ones back home."

This might make me think more seriously about getting myself a prepaid Du SIM for future trips to the Emirates. However, my situation is similar to that of Dean Bubley of Disruptive Wireless, who, in an amusing blog post this week, describes himself a frequent traveller, but to lots of different countries. Writing this Wednesday, Dean bemoaned the costs and complications of staying in touch with work contacts, friends and family while attending next week's Mobile World Congress. "One thing that's immediately apparent," writes Dean, "is that despite all the talk of VoIP, SIM-swapping and the like, I'm going to end up with a large bill for voice and SMS roaming. I've got dozens of meetings, loads of people I'll need to contact (or be contacted by), inevitable changes to schedules and venues, plus all the usual work and personal call traffic I'd normally get in the UK. I'll be paying for both inbound and outbound roaming calls."

"It's clearly not an option just to get a local SIM card - most of the people I need to contact will be outside Spain and there are too many people likely to contact me to inform everyone of a new number." Given that, as Dean says, keeping a Spanish SIM year-round would not work because it would expire after a few months without use, I had to sympathise when I read his remarks about WiFi not being an option due the likely (he says notorious!) congestion on the network provided at the Barcelona Fira (MWC venue). Dean also criticises VoWLAN service providers for having "haphazard support of SMS, which is absolutely mandatory at trade shows where you have back-to-back meetings."

Dean's suggested remedy for international travellers? "What would be good would be a way to get a local SIM or account/number - ideally without physically having to buy one - and for this to automatically propagated to all your contacts when you were in-country. Or for it to somehow be linked to your existing home account in the network."

That sounds useful. Let's see. In the meantime, after reading about Du's reduced international call charges, I noticed a couple more stories about operators slashing prices. Both relate to markets from where a large number of the UAE's expatriate workers originate.

According to an article last week on the Bangladesh news portal priyo.com, the CDMA operator CityCell is "struggling to remain in business... with operating losses escalating to almost double in the first quarter." The company, of which SingTel is the largest shareholder, has apparently suffered as a result of having to subsidise handsets. The article asserts that only market-leading
Grameenphone is profitable, "with other players bleeding for years."

While device subsidies are said to be hurting CityCell, greater pain is apparently being caused by an intense price war. Says Zia Uddin, an analyst with New York-based asset management company LR Global: "Intense competition has led to [an] unhealthy price war in [the] Bangladesh mobile phone market. Most of the companies have to subsidise handset prices to woo clients," he said. "In addition, the ARPU and [tariffs] in Bangladesh are possibly the lowest in the world".

CityCell, the country's first ever MNO, seems poorly positioned to grind it out in this kind of environment, having steadily lost market share to rival GSM operators since Grameenphone, Banglalink (then called Sheba Telecom) and AKTEL entered the market in 1997. The CDMA carrier now has just 4.03% of the subscriptions in Bangladesh.

Meanwhile in India, according to an story carried by Global Mobile Daily last month, the entry of CDMA operator Reliance Communications onto the GSM scene has already triggered rivals Airtel, Vodafone and Idea Cellular into price cutting mode.

This is not surprising if, as reported by the Economic Times yesterday, Reliance plans to slash its GSM rates by 50%. However, the same article cites a recent study by Lirneasia which deduces that such a move is not likely to make a significant dent in telcos' existing subscriber base.

Lirneasia, a not-for-profit ICT policy and regulation capacity building organisation working in nine South Asian countries, conducted a survey on mobile users at the bottom of the socioeconomic pyramid which shows that even the most cost sensitive subscriber segment has reached a stage where it is driven more by service offering, brand loyalty and number retention than by price discounts.

T.V. Ramachandran, head of India GSM operators' trade association the COAI supports the findings of the Lirneasia study. This seems like a sensible response from a body whose members could suffer badly if a price war is escalated and sustained.

It will be interesting to watch developed and emerging markets worldwide to see how many operators feel this economic downturn compels them to cut prices heavily and how many take the view outlined in the Lirneasia report - that it makes more sense to compete on quality and brand value.

Mobile price wars in the downturn: time to do battle?

Telcos hit by high licence prices in India and Romania

These days it is proving rather tricky not to make a blog entry without some reference to the global economic downturn. When I was putting some notes together for today's posting I thought I might manage it, but then I spotted the latest post on Dean Bubley's excellent Disruptive Wireless blog. Dean writes about the panel discussion which he will be moderating at Mobile World Congress in Barcelona next week, the theme of which is 'Prospering on a Shoestring', i.e. looking at "various tactics and strategies that can be employed by operators to mitigate the worst impacts of the downturn". In the years before I had the luxury of sharing an office with the in-house analysts at Informa Telecoms & Media, I had to beg, steal (not literally) and borrow information when working out what should be on the agenda of the various industry conferences it was my task to organise. Dean Bubley was always an excellent source of valuable insights and my hunch is that in this Highdeal-organised panel session, he will ask very challenging questions and stimulate lively but civilised disagreement between the participants. I am not sure if Dean rounded up the panellists himself, but whoever is responsible gets ten out of ten for putting together telco operator representatives from varied markets. Telekom Slovenije and Mauritius Telecom on the same panel? I doubt that happens very often.

I won't be there to see Dean stirring up debate. Having made it to two consecutive 3GSM/Mobile World Congresses, this year I will not be in Spain for the annual cellular industry get-together. Instead, I shall be using the next three weeks to prepare for the role I will be taking on in March. In case that sounds like a boringly pragmatic use of what could be a nice bit of free time, I should point out that a good deal of my preparation work will be done within sight of a swimming pool and golf course in south Florida. Much as I'd love to watch cold rain falling on melting snow for the rest of this month, family obligations compel me to turn my back on the dark, short days of northern Europe in favour of milder climes. It's a hard life...

I don't anticipate that this blog will grind to a halt while I am catching some rays in the Sunshine State, although I will have to work out my connectivity options. Cost-conscious in these troubled times, my host in Florida has ditched his PSTN line and broadband service and, when not in his office, is now linked to the wider world only by his AT&T Mobility iPhone. I'll fight him for it...

While enduring a punishing regime of sunshine, warm weather, free babysitting and free room and board, I will continue to keep an eye on what's going on among the telcos active in emerging markets. What caught my eye today was really just a case of picking up from yesterday's musings about the prospects for 3G and WiMAX in India.

Today's Cellular News mailout included a piece on how Vodafone Essar plans to meet the cost of its bids in the country's delayed 3G and WiMAX auctions. As I mentioned yesterday, the latest delay is a result of the country's Finance Ministry weighing in to see if the the reserve price for the 3G auction can be doubled. The Cellular News article provides the numbers: the current reserve price for the 3G auction is US$412 million with the Ministry now hoping for at least US$824 million.

Working to bring 3G services to market in India certainly seems to be a task fraught with difficulties, of which this demand from the holders of the nation's coffers is just the latest. Also sticking a spanner in the works is the country's Defence Ministry, which, according to this article, is set to release just one fifth of the unused defence sector radio spectrum that the Department of Telecommunications had hoped for.

In this challenging context, who can blame Vodafone Essar CEO Asim Ghosh for taking up the option to retire at the end of next month? According to a second Vodafone India-related Cellular News story today, Ghosh, who joined the former Max Touch-branded operator in 1998, is to be replaced by Marten Pieters, a former CEO of Celtel International, the pan-African cellco which is now part of Zain. Pieters is currently a director of Millicom International Cellular, a Luxembourg-headquartered company with mobile operations across Africa, Latin America and Southeast Asia.

While the 3G licence process in India has hit a number of hurdles, I discussed yesterday the belief that once these are overcome, the greater efficiency of the technology vs. 2G networks will turn out to be a key driver of accelerated growth of the country's overall mobile market. I wrote about a proponent of this view arguing that the case for 3G looks very positive and that WiMAX also looks a reasonable bet.

WiMAX fans will be more disappointed by news from Romania, where Telecompaper reports that absolutely nobody fancies either of the two licences in the 3600–3657 MHz and 3700–3757 MHz radio frequency bands for providing broadband wireless access services. Having acquired the tender book, a diverse group of initially interested parties have all come to a negative response to the EUR 7.5 million licence fee. These include two long-established mobile operators - Cosmote's Romanian operation and the country's outpost of the Vodafone empire. Also interested was RCS & RDS, a cable MSO and broadband service provider which launched 3G services in December 2007 and now has a mobile market share of just over 5% according to WCIS. Two more to say no were Asesoft International (an IT solutions provider) and a company called Comcore Management.

That's all for today. Having failed to avoid mentioning the global economic horror story today, I will set myself the challenge of not mentioning the Indian 3G and WiMAX licencing processes tomorrow. That might be tricky with new twists and turns getting coverage every day.

Telcos hit by high licence prices in India and Romania