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Com . issue 34 2012


CEO's interview with Comm. titled "Delivering on the vision".

CEO's interview with Comm. titled "Delivering on the vision".

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  • 1. Summer 2012 Issue 34 Price vs. value Nawras continues to press ahead despite sluggish share price performance Towering ambition Is the independent tower company business in Africa just a fad? Maximum data Umax, Zimbabwe’s latest data network providerDecisive coverage of telecommunications strategy promises unique offeringsDelivering onthe visionQ.NBN’s success remains more important than ever inreaching Qatar ICT Strategy 2015 goals Mohammed Ali Al Mannai, CEO of Qatar National Broadband Network
  • 2. Introducingthe all-in-onemobile processor.Snapdragon™ processors bring together all the best-in-class components a Smartphone needs on asingle chip. Because when everything is made to work together, everything works more efficiently.So you can do more. Do it faster.©2012 Qualcomm Incorporated. All rights reserved. Qualcomm and Snapdragon are trademarks of Qualcomm Incorporated, registered in the United States and other countries.The Snapdragon logo is a trademark of Qualcomm Incorporated.
  • 3. EditorialActive developments underway C omm.’s Summer 2012 issue is be a business fad or a sustainable crammed with developments way of conducting business that in the Middle East and Africa benefits all parties signing up to it. telecom landscape that are genuinely We also report on the launch of market firsts, and which point to a one of Zimbabwe’s newest Internet rejuvenation of service providers’ efforts application providers, Umax, and to modify their business models. consider whether what they claim to be Qatar National Broadband Network a differentiated WiMAX service in the is an initiative aimed at turbo-charging country delivers on what it promises. Qatar’s broadband connectivity, and There’s also a view from our is a brave move on the part of the colleagues at Arab Advisors Group state to stump up the cash for the on the investment opportunities that investment in passive infrastructure, exist in sub-Saharan Africa, extracted which can sometimes be a stumbling from a report recently published by block to wider broadband advancement. them in associated with Pursuit Mode Talking of turbo-charging, we also Initiatives, the publisher of Comm., talk to Ross Cormack, CEO of Nawras, entitled Untapped potential: Africa’s about his company’s investment in remaining growth markets in focus. 4G as well as its progress in the offer of wireline broadband services. Africa’s independent tower companies have been hitting the headlines in recent years and we look a little closer at whether the model may just Tawanda Chihota, Principal
  • 4. Contents I S S U E 3 4 su m m e r 2 0 1 2Features 20 24Price vs. value 20Despite a stock market share pricethat is languishing at more than30 per cent below the level it listedon the Oman bourse in November2010, Nawras continues to be anenergetic operator that is looking tomaximise the opportunities data usagerepresents. Through the leveragingof its various access technologies andthe bundling of products and services,Nawras continues to expand its base ofoperations, believing such a focus willgenerate the necessary good resultsTowering ambition 24Africa has been at the centre of a growingnumber of tower sale and lease-backannouncements in recent years, with 30such arrangements typically involving thesale of the passive elements of networkoperators’ infrastructure. Initially itappeared to be an emerging businessmodel that benefitted all parties, thoughthe recent insolvency issues of sometower operators raises questions whetherthe model is as compelling in the long-term as it was initially made out to beMaximum data 30The demand for broadband data acrossAfrica continues unabated, and inZimbabwe one of the first of a dozenlicensed Internet access providers,Dandemutande Investments’ Umax,launched service in June promising awholly differentiated offering to whatconsumers have so far been used to2
  • 5. cover story:Now or neverQatar National Broadband Network (Q.NBN) isa private company owned by the government ofQatar and charged with the responsibility to rollout passive fibre infrastructure across the country.Given the Qatar’s ambitious digital plans, which aresummarised under the Qatar ICT Strategy 2015 andfurther articulated through the Qatar National Vision2030, Q.NBN is playing a critical and pioneeringrole with respect to public-private partnershipICT infrastructure investments in the Gulf. “Q.NBN is a catalyst for competition,” saidthe company’s CEO, Mohammed Al Mannaiin an interview with Comm. “I believe whatwe are trying to achieve is a first in the Gulfregion in so far as the costly part of thedeployment of passive fibre infrastructure isbeing absorbed by the government,” he added. Established last year, Q.NBN’s mandate is toroll out passive fibre infrastructure across Qatar, 16and in so doing, place the company in a positionto offer wholesale fibre backbone connectionsand capacity to licensed operators, hastening theuptake of broadband services. It is forecast that such Our role at Q.NBN is to wholesale connectionsuptake will cascade all the way down to consumers to the service providers, so to offer capacity orbeing offered a much improved and powerful fibreoptic broadband service to empower their lives. bandwidth. The wholesale agreement we plan to Earlier this year the company received a 25 put in place is under review, as is the costingyear licence to provide Qatar with fibre optic calculation, though we are clear that we shallbroadband throughout the country, having beenofficially endorsed as the fibre optic broadband charge licensed operators per connectioninfrastructure provider for the country. regulars Editor’s note 1 Comment 32 Comm.’s Summer 2012 issue is crammed Philippe Vogeleer offers his opinion on with developments in the MEA telecom the long-term views service providers landscape that are genuinely market firsts need to adopt to drive success News 4 Hot Spots 38 Looking back at the most significant telecom Comm.’s guide to the most relevant developments and updates taking place telecom industry events to attend in emerging markets around the world during the coming month Movers & shakers 28 Comm. café 40 32 A roundup of some of the most significant IHS CEO Issam Darwish answers questions position changes that have taken place about the role his company is playing in the in the telecom market globally telecom tower market in sub-Sahara Africa Summer 2012 3
  • 6. Regional newsBulletin board Etisalat looks to open Zain subs grow 5% Y-o-Y inH112, but revenues and net in- up equity ownership tocome remain flatZain Group reported its con- foreign investorssolidated financial results forthe half-year ended June 30, Foreign investors will be owned by overseas investors. listed on the Abu Dhabi Stock2012, which reflected revenues able to buy stock in the UAE’s Etisalat operates in 18 coun- Exchange.of KD663.5 million (US$2.38 Etisalat, according to local tries across Asia, the Middle Of the listed companiesbillion), up 0.6 per cent year- media reports. East and Africa. It has a pres- that do permit overseas in-on-year. Net income for the half Etisalat Group CEO Ahmad ence in markets including vestors, the majority havewas also flat at KD141.9 million, Abdulkarim Julfar is quoted Egypt, Saudi Arabia, Afghani- limited this to around 25 peralso up just 0.6 per cent year- as saying Emirates Investment stan, Sri Lanka, Niger, Cen- cent, although in some caseson-year. Council is currently working tral African Republic, Tanza- the stakeholding is permitted The operator counted 41.4 on amending the law to allow nia and Sudan. to be as high as 49 per cent.million consolidated active sub- foreign ownership of Etisalat Etisalat is currently 60 per Meanwhile rival UAE tel-scribers at the end of June, an shares. It remains unclear how cent owned by the govern- ecom operator Du reportedincrease of 1.8 million users or much of the telco could be ment, with the remainder Q2 revenues rose by 12.9five per cent over the 39.6 mil- per cent to AED2.5 billionlion counted at the same time (US$689 million), while netlast year. By way of compari- profit surged by 51 per cent toson, Zain added 5.4 million new AED651 subscribers over the 12 The net profit margin (beforemonths to end-June 2011. royalty) stood at 26.6 per cent, up from 19.1 per cent in Q211. Mobile revenues grew by a Qtel blames FX fluctuations further 14 per cent year-on-for 11.8% fall in H112 net profit year, reaching AED 1.9 billion,Qtel Group announced results with drivers of performance infor the six-month period to end- this segment continuing to in-June, reporting its consolidated Etisalat Group CEO Ahmad Abdulkarim Julfar is quoted as saying Emirates clude growth in the company’s Investment Council is currently working on amending the law to allow foreigncustomer base stood at 83.7 mil- ownership of Etisalat shares customer base, strong minuteslion, up eight per cent year-on- of use, and data usage.year. Group revenue for the pe-riod amounted to QAR16.4 billion(US$4.5 billion), up 6.1 per centyear-on-year, with EBITDA forthe period amounting to QAR7.8billion, up 8.2 per cent. Qtel moves to acquire the remaining 47.5 per Net profit attributable to Qtelshareholders was down 11.8 per cent of Wataniya Telecomcent to QAR1.35 billion, with thetelco attributing this mainly to Qatar Telecom (Qtel) has Qtel is being advised by Wataniya can review the of-foreign exchange losses in Indo- offered to buy the remaining Barclays Capital and the in- fer and appoint financial ad-sat and Algeria. 47.5 per cent stake it does vestment banking arm of visors to evaluate it. For Q2 to end-June, Qtel’s not already own in Kuwaiti National Bank of Kuwait, a Qtel bought the Wataniyarevenue was up 4.6 per cent to unit Wataniya, a Kuwaiti source with direct knowledge stake in 2007 for approxi-QAR8.356 billion year-on-year, bourse statement said on of the matter told Reuters. mately US$3.7 billion. Ku-while EBITDA was up 8.5 per June 26. The Qtel offer was sub- wait Investment Authority,cent to QAR3.964 billion. Net Based on Wataniya’s cur- mitted to Kuwait’s Capital the Gulf state’s sovereignprofit attributable to Qtel share- rent market capitalisation of Markets Authority, which is wealth fund, has a 23.5 perholders was down 11.3 per cent US$3.97 billion, the stake is reviewing the proposal, the cent stake in Wataniya andyear-on-year to QAR641 million. worth about US$1.9 billion, source said. Based on the au- the remaining shares are Reuters data estimates. thority’s recommendation, publicly held.4
  • 7. Qualcomm advertorialQualcomm charts newdirections for content andapplications marketWith smartphones having entered the affordability ranks, the devicegame is being spruced up with the drive towards enhancing supportingapplications and content. Set to up the stakes in the mobile contentspace, Qualcomm is taking new routes to drive the content ecosystemA s an enhancement by giving consumers better Augmented Reality presents to its traditional applications and content,” he opportunities partnership approach explains. At the high-end, Qualcomm with telecom players, Qualcomm is creating a part- has been leading the develop-Qualcomm is emphasising the nership network that will work ment of augmented realitykey role content will play in towards increasing the availabil- applications by training softwaredriving the telecom industry by ity of content that is optimised, developers to work with Qual-sponsoring the Cinemobile Film localised and built using a comm’s Vuforia augmentedFestival in Egypt. network of local developers to reality platform and to develop “Our association with Arabi- deliver more regionally relevant localised applications that areacpd - the largest film produc- mobile applications. The com- optimised – but not restricted -tion and distribution company in pany recently announced a col- to run on Snapdragon-powered Moheb Ramsis is senior directorEgypt - to organise this festival, laboration with one of Egypt’s phones. of business operations for Northis a major step towards enhanc- largest telecom conglomerates, “Augmented reality is the con- Africa, Qualcomming user created content and Orascom Telecom Ventures (OT cept of superimposing digitalcreating high quality videos op- Ventures). graphics on top of a view of the content in other directions,timised for smartphones,” said A holding company for several real world as seen through you including through its R&D inMoheb Ramsis, senior director entities such as ARPUPlus, mobile device’s camera. It is a chipset development.of business operations for North LinkDev, ConnectAds, and very attractive concept in itself “We collaborate with a lot ofAfrica, Qualcomm. “It’s a clear others, OT Ventures develops and there are many ways to ap- companies that use our proces-way for us to show that content and provides different types of ply it in different areas of life. For sors in their devices and weis a key value driver for the telecom value-added services example, imagine pointing your work with them to port applica-smartphone industry.” ranging from applications devel- smartphone’s camera at a sign tions and pre-load them on to This initiative represents a opment to content creation and printed in Arabic and watching it devices sold in the region to givestrong march towards expand- aggregation, online advertising instantly translate to English. Or the devices and mobile servicesing locally relevant content, and more. Qualcomm’s as- imagine pointing it at an in-store a local flavour,” Ramsis says.complete with a specialised sociation with Orascom will give advertisement and watching Another way to drive collabo-jury, an online platform for film- both companies the opportunity the images spring to life in 3D. rations is through retail initia-makers to upload their movies, to dip into the mobile content There are also many other pos- tives and operator partnerships,and viewers to watch and vote and applications pie across sibilities, such as in education, where content and applicationsfor their favourite films using segments. entertainment, advertising, are offered for free downloadtheir smartphones or other con- “Our partnership is overarch- and more. The only limit is the when a device is purchased.nected devices. ing and gives us the leg room to imagination of local developers,” “Content strategy is being engage with Orascom in differ- Ramsis says. approached in many ways,From affordability to attrac- ent areas, including jointly help- including using it as a market-tiveness ing developers with trainings Looking at new ways for ing tool and promoting partnerFor Ramsis and his team, to create ground breaking new partnerships solutions. We are already seeingsmartphone affordability is just apps based on Qualcomm’s Besides working with partners significant traction and expectthe starting point. “Now the developer tools, such as our to drive content development, to see many more locally de-focus is on enhancing the value Vuforia SDK (Software Develop- Qualcomm is also investing its veloped applications,” Ramsisof premium-priced devices ment Kits). time and efforts to grow mobile emphasises. summer 2012 5
  • 8. Regional newsBulletin board Tunisian government to auction 25% stake in LiberCell suspends ops overunpaid tax billLiberia mobile network, LiberCellwas ordered to close its servicesby the country’s tax courts for Tunisianareportedly failing to pay licencefees. The Tunisian govern- Slim Besbess said in a press and operator shareholders The company, which is 30 per ment plans to put its 25 per conference that offers can are forbidden from partici-cent, owned by Kuwait’s Hits cent stake in number-one only come from financial pating in the auction.Telecom is said to owe US$1.5 operator Tunisiana up for companies and investment The stake being auctionedmillion in licence fees, and will auction, reports Reuters. funds and must be submitted was confiscated from theremain closed until the debt is Finance ministry official by November 2. Operators Princesse Holding conglom-settled. erate controlled by the son Citing local reports, Bloomberg of ousted Tunisian presidentNews said that court documents Zine al-Abidine Ben Ali.have been delivered to the doors Tunisiana won a US$135of the company’s head office in million licence to launch 3GMonrovia. and fixed-line networks in The suspension of licences in the country in May. The re-sub-Sahara Africa is unfortu- maining 75 per cent stake innately relatively common, though the operator is owned by Ku-most operators fall in line. waiti group Wataniya, which is majority owned by Qtel. Tunisiana controls 53 per Ericsson to deploy RBS 6000 cent of the three-operatortechnology in Vodafone Egypt market. It has approximatelyEricsson has entered an agree- seven million mobile con-ment with Vodafone Egypt to nections, ahead of rivals Tu-continue to provide a quality Tunisiana controls 53 per cent of the three-operator market. It has approximately nisie Telecom (4.5 million) seven million mobile connectionsnetwork to subscribers through and Orange (1.7 million).the transformation of VodafoneEgypt’s radio network. Ericsson is set to deploy itslatest RBS 6000 technology inthe Vodafone Egypt network,which will allow the operator to MTN solid H1 results, with revenues up 17.5%meet the demands of its growingsubscriber base and continue to South Africa based MTN year to 176 million. The growth in EBITDA wasprovide them with quality mobile Group announced first- Market conditions con- mainly due to strong organiccoverage throughout the coun- half revenues rose by 17.5 tinued to be impacted by growth in South Africa andtry. The RBS 6000 is a site so- per cent to ZAR66.5 billion increasing levels of compe- Iran, which grew local cur-lution that supports GSM/EDGE, (US$8.1 billion), impacted tition, regulatory require- rency EBITDA by 10.5 perWCDMA/HSPA and LTE in a sin- by solid growth in South Af- ments, political unrest in cent and 36.4 per cent re-gle package. rica, Iran and Ghana, as well certain countries and the spectively. Ericsson has enjoyed tremen- as by foreign exchange gains. global economic slowdown. Capex increased 77.7 perdous success with its RBS 6000 On a constant currency ba- Growth in Nigeria was lower cent to ZAR10.14 billion, duetechnology, helping it maintain a sis, group revenue grew 12.5 than anticipated as a result mainly to an aggressive roll-strong leadership position in the per cent year-on-year. First of intense competition. out programme implement-next generation infrastructure half operating profit also Group EBITDA increased ed earlier in the year andmarket despite the significant rose, to ZAR21.641 billion, 18.2 per cent to ZAR29.8 the ongoing focus on criti-competition that exists across up 22 per cent year-on-year. billion. On a constant cur- cal capex investment pro-the globe. MTN’s subscriber base rency basis, EBITDA grew grammes across the group’s grew by 6.9 per cent year-on- 12 per cent year-on-year. operations.6
  • 9. Regional newsChanges following Friendi Africa Cellular Towers served withGroup merger start taking liquidation notice South Africa based mobileeffect at Virgin Mobile SA towers infrastructure opera- tor, Africa Cellular Towers has been served with a liquidation order by the South Gauteng Virgin Mobile South the aim of the changes is to offering online sales and ser- High Court after failing toAfrica announced the closing deliver an improved and dif- vice through a new improved stave off bankruptcy.of 30 of its 38 retail stores in ferentiated customer experi- website and is exploring new, The company has struggledthe country as it looks to re- ence by leveraging VMMEA alternative sales channels. against rising debts and fall-focus its marketing efforts. best practice and investment Vinter had suggested that ing revenues for the past year,The initiative has already in improved systems and pro- changes would be made in and a few months ago an un-commenced and is expected cesses. South Africa in order to bring named creditor started pro-to conclude during the first Virgin Mobile South Af- the company to profitability ceedings against the company.half of 2013. rica will convert the eight in that market. Speaking to The company, listed on the The MVNO in South Africa remaining stores from sales Comm. in June, Vinter said: stock exchange, declined tomerged its operations with focused franchise stores into “Yes, there are still losses at name the creditor in June butDubai-based Friendi Group, full service stores offering Virgin Mobile South Africa, simply said that a liquidatorwhich is led by Mikkel Vint- its entire range of products but I think what is required would be appointed Together the two MVNOs and services including sales, are some structural changes Two directors also resignedare known as Virgin Mobile renewals, upgrades and cus- and tweaks, which I believe from the company.Middle East and Africa (VM- tomer service and advice. can turn the operator around Africa Cellular Towers oper-MEA), and the company said The company will also be quite quickly.” ates three divisions, providing power lines, cellular towers and equipment shelters. The company has been post- ing losses and was seeking an outside investor but had notSTC Group together with Maxis and Oger Groups secured the necessary invest- ment before the winding up order was served.engage Ericsson as preferred supplier The STC Group an- In 2010 the telco groupsnounced that along with jointly launched a series ofits affiliates, the Maxis and global initiatives focused onOger Groups, they have se- capturing synergies acrosslected Ericsson as one of their nine operating com-their preferred global ven- panies and on working withdors for network infrastruc- best-in-class global suppliersture, as part of their global to become preferred part-synergy creation activities. ners based on value creatingThe agreement will allow agreements.Ericsson to offer its portfolio One of the initiatives isof network infrastructure to focus on technology in-equipment through a global frastructure synergies, withprice structure based on to- an objective of developingtal business in Bahrain, In- a global price book and for-dia, Indonesia, Kuwait, Ma- malising volume discounts Left – Anders Lindblad (Ericsson), right - Ghassan Hasbani (STC International).laysia, Saudi Arabia, South based on overall groups The agreement between the two companies will allow Ericsson to offer its portfolio of network infrastructure equipment through a global price structureAfrica and Turkey. scale. summer 2012 7
  • 10. Alcatel-Lucent advertorialManaging thenew conversationexperienceAs LTE is commercialised in an increasing number of markets across the globe, Laura Merling,Alcatel-Lucent’s senior VP of Application Development Platform and Strategy, details howservice providers, enterprises and developers can work intelligently to ensure they remain anintegral part of the rapidly evolving wireless data ecosystem L aura Merling leads strategy and the need for operators to identify new execution for Alcatel-Lucent’s revenue streams. There is also a require- company-wide push to trans- ment for service providers to consider form the network into a powerful business models beyond access. platform for service providers, enterprises Merling describes application providers and developers to reap benefits from as having seized the consumer experi- through the delivery of high-quality ap- ence; driven by consumer demand, plications. In July 2012, the GSA (Global with service providers now needing to mobile Suppliers Association) said 338 redefine and reinvigorate their role in telecom operators in 101 countries had the value chain. In order to participate in committed to commercial LTE network the ecosystem, Merling advises carri- deployments or were engaged in tri- ers shorten time-to-market and lower als, technology testing or studies. costs for delivering new services. The report went on to say 280 op- With mobile data users forecast to erators have made firm commitments consume as much as 100 times more to deploy commercial LTE networks data by 2016 than they do today, pos- in 90 countries. A further 58 opera- ing both an opportunity with respect to tors in 11 more countries are in a pre- the generation of increased revenues, commitment stage and are engaged in and a challenge with respect to manag- LTE technology trials, tests or studies. ing the network’s ability to cope with The GSA stated that 89 LTE operators such a significant increase in data traffic,Laura Merling is Alcatel-Lucent’s have now launched commercial services operators need to make savvy choices.senior VP of Application in 45 countries, with this number forecast An evolution of web and mobile isDevelopment Platform and Strategy to rise to 150 by the end of 2012. Given underway as Merling describes the this level of investment in high-speed new conversation experience as com- mobile broadband networks, much of prising connectivity, cloud, commu- it driven by demand for video content, nications, data and ecosystems. Merling suggests carriers should start “Carriers need to think beyond transpor- regarding themselves as an integral tation,” Merling says. “They need to view part of the application delivery eco- LTE as a services-enabled environment system rather than merely as sellers of in which they can charge differently. They data, or providers of just transport. can do this by partnering with a platform The telecom environment today is provider such as Microsoft to offer an characterised by SMS and voice rev- Evolved Multimedia Broadcast Multicast enues being on the decline, accelerating Service (eMBMS), which is tailored for LTE8
  • 11. Alcatel-Lucent advertorialand allows multimedia content to be sent applications to bring personal, social monetisation and optimisation softwareonce and received by many end users.” media, and business contacts, and solution, essential for service providers Service providers can also form conversations together in one place, to turn their data and telecommunica-content partnerships and offer the and the development of high quality tion infrastructure into a commercialoption for application updates to be video conferencing applications, unified transaction platform. OAP provides thepushed during off-peak times for ad- inboxes, and device transfer services. expertise, tools and services for APIditional credit to the end-user. The management of consumers’ data, management, API design and creation, Connectivity in the evolving conversa- with respect to their value and identity reporting and analytics for optimisationtion experience requires service pro- is another required progression in the of API programmes, business modelviders to think beyond transport and evolutionary path of conversations, with design for maximising revenue and ser-initiate new technologies and business cross-telco Application Programming vice integration for time to market.models such as eMBMS and Smart- Interfaces (APIs) being developed for opt- Using OAP, service providers are able topush for the efficient delivery of con- in subscriber data. The benefit of such for create and securely expose new services,tent; or the auctioning of spare network subscribers includes the ease of log-in, either directly or via composite APIs, socapacity as a new business model. personal data being stored in a single, they can be made available internally Merling says service providers also have trusted place, a reduction of forms to be and/or to third parties, allowing for theto consider bringing the power of the ser- creation and delivery of new offers tovices of the network to the cloud, ensuring market, faster, at lower cost and at scale.three fundamental building blocks – trans- The benefits of cross- Alcatel-Lucent also recently intro-formation, enterprise, and building – are telco APIs to service providers duced its API Lifecycle Methodology,in place. With respect to transformation, which looks to help carriers create anservice provider infrastructure, operations include the improvement effective end-to-end API strategy,and business models need to aligned; of identified visitors and while simultaneously establishing awhile enterprises appear to be ready for personalised services, to be repeatable process that maximises ef-carrier cloud, which has a far greater rev- able to feed databases with ficiency, cost savings and revenue.enue potential for service providers (10x) qualified operator data, and toand is more attractive (4x) to enterprisesthan existing public cloud services. increase the account creation The Alcatel-Lucent API Life- Carriers should also be busy- success rate – more sales; cycle Methodology has threeing themselves with the building of more information requests; main areas of specialisation:an agile service delivery platform more subscriptionsfor a new class of cloud services. Definition - Knowing who you would “There are three main ecosystem want to use your API and what youcategories in the evolving data-centric filled in from a mobile, and an ultimate would want them to do with it will helpconversation experience and these are enhancement to customer experience. you define an initial business goal.the OS platform providers; the infrastruc- The benefits of cross-telco APIs to Design - Determine which pieces ofture as a service (IaaS) providers such as service providers include the improve- your existing functionality, services,cloud providers; and the content players,” ment of identified visitors and per- and data can be tapped with APIs. TheMerling says. “Deployment of metrocells sonalised services, to be able to feed protocols you use, the complexity of thecan optimise any downloading of data, databases with qualified operator data, APIs and their inputs and outputs willand what LTE offers is the opportunity and to increase the account creation have tremendous bearing on whether andfor service providers to gain a better un- success rate – more sales; more infor- how third-party developers use them. derstanding of their customers’ contexts mation requests; more subscriptions. Deployment - An API platform doesand to provide services and applications Alcatel-Lucent is heavily involved in not get built once; it is continuouslyspecifically tailored to those contexts.” helping customers around the world monitored and improved on the basis of According to Merling, the new conver- to transform their businesses to take developer response, application us-sation experience is being reinvented in advantage of the changing landscape age, and evolving business strategy.part by faster, higher capacity networks, where APIs have emerged as the lan- The right analytics tools can not onlysmartphone proliferation, and changing guage of the information economy. help you maintain control of API use,consumer habits. Thus the requirement Alcatel-Lucent developed Open API they can help you understand how youfor management tools for converged Platform (OAP) is an end-to-end API are meeting your business objectives. summer 2012 9
  • 12. International newsBulletin board RIM reports US$518 million loss in quarter to June 2 Huawei reports 22 per centfall in operating profit in H112Chinese telecom technologyprovider Huawei reported H112sales revenue of CNY102.7 bil- Research In Motion During the period, the the overall BlackBerry sub-lion (US$16.16 billion), represent- (RIM) reported that in the company shipped 7.8 million scriber base continued to grow,ing an increase of 5.1 per cent three months to June 2, 2012, smartphones and 260,000 with increases in all regionsyear-on-year. Operating profit the company made a loss of tablets. This compares with except for North America.amounted to CNY8.79 billion US$518 million, compared 13.2 million smartphones Internationally, revenue fellwith an operating margin at 8.6 with a prior-year profit of and 500,000 tablets in the during the period, reflectingper cent, an increase of 20.3 per US$695 million, on revenue of same quarter in fiscal 2012. price pressure due to compe-cent half-on-half and a decrease US$2.81 billion, down from Providing something of a tition, and sales of its agingof 22 per cent year-on-year. US$4.91 billion. positive, the company said that device line – a refresh is cur- In the first half of 2012, Hua- rently underway.wei’s three business groups – The handset manufacturerHuawei Carrier Network, Huawei also stated that its first Black-Enterprise, and Huawei Device— Berry 10 (BB10) device willachieved considerable progress now not be available untilin technological innovation and the first quarter of 2013, say-market expansion, further con- ing that the integration of keysolidating the company’s posi- features into BB10 has beention as a leading global ICT solu- “more time consuming thantions provider. anticipated,” pushing back the launch from late 2012. RIM also confirmed its an- ticipated job cuts, although Smartphone success pushes the size of the cull – around50% rise in Q2 net profit at 5,000 staff from a workforceSamsung of 16,500 – was larger thanSamsung reported a near 50 per Research In Motion CEO Thorsten Heins said the company shipped 7.8 million many expected. smartphones and 260,000 tablets during the three months to June 2cent rise in net profit for the sec-ond quarter on the back of strongsmartphone sales. The South Korean electronicsvendor reported Q2 net profitof KRW5.19 trillion (US$4.56 Ericsson impacted by lower profitability inbillion), up 48 per cent fromKRW3.51 trillion a year ago. To- Networks and increased loss at ST-Ericssontal revenue rose 21 per cent toKRW47.6 trillion with the mobile Ericsson reported that net “In 2010 we made a con- decline in CDMA equipmentunit accounting for KRW20.52 sales in Q212 to end-June scious decision to gain market sales as well as weaker sales intrillion, a 75 per cent increase increased one per cent year- share and increase technology China and Russia.year-on-year. on-year to SEK55.3 billion and services leadership, well Global Services and Sup- According to figures published (US$8.13 billion), and was aware of the short-term prof- port Solutions showed strongby Strategy Analytics, Sam- up nine per cent quarter-on- itability pressure. Our focus performance, up 26 per centsung consolidated its lead as quarter. However, net income is now on translating these and 47 per cent year-on-yearthe world’s largest smartphone fell a staggering 63 per cent gains into sustainable profit- respectively, with Ericssonvendor by selling 50.5 million in the quarter to SEK1.2 bil- able growth,” commented describing that the underly-devices in Q2. It is thought that lion from SEK3.2 billion a Hans Vestberg, Ericsson and ing business mix, with higherthe flagship Galaxy S3 – launched year earlier. The company president and CEO. share of coverage projectsduring the quarter – accounted said net income was impact- Ericsson explained that Net- than capacity projects, wasfor 6.5 million in sales. ed by lower profitability in works sales decreased 17 per unchanged in the quarter Networks and increased loss cent year-on-year to SEK27.8 and is expected to prevail in ST-Ericsson. billion due to the expected short-term.10
  • 13. International newsBulletin board Facebook squashes rumours Airtel profit falls for anotherregarding smartphone develop-ment consecutive quarterAlthough Facebook’s US$1.18 bil-lion in revenue for Q2 was slightly Bharti Airtel saw its hanced capex and licence fees million, up 23 per cent fromahead of Wall Street expectations profit fall during its fiscal resulted in the lower profit. US$50 million, on revenue ofand up 32 per cent year-on-year, Q1 to end-June, as the op- Mobile subscriber revenue US$1.1 billion, up nine perthe company swung to a US$157 erator was faced by regula- in India during the period cent from US$979 million.million net loss – and gave little tory and tax developments was impacted by two chang- The company noted chal-guidance on future prospects. in India, and planned accel- es: Airtel said that guidelines lenges on the horizon, how- The number of Facebook’s erated investments in India from watchdog TRAI around ever, including “economicso-called monthly active users and Africa. processing fees restricted the and currency headwinds” in(MAUs) hit 955 million at the end In a statement, Sunil Bharti sale of bundled tariffs; and a key markets, as a result ofof the period, up 29 per cent year- Mittal, chairman and MD of tax increase led to all telecom the Eurozone crisis, lower aidon-year, while 543 million of these the company, said: “Telecom services becoming more ex- and grants, rising inflation,now access the service via mobile revenues in India have been pensive by two per cent. and “political issues” in somedevices, a 67 per cent rise. depressed due to hyper-com- In Africa, EBIT was US$62 countries. CEO Mark Zuckerberg said Fa- petition and recent regula-cebook was “focused on invest- tory and tax developments…ing in our priorities of mobile, On the African side, we areplatform and social ads.” On the gaining market share, ben-subject of mobile, Zuckerberg ap- efiting from the significantpeared to shoot down long-run- investments made in the lastning rumours about a Facebook two years.”smartphone. During a conference For the quarter to Junecall he described “building out a 30, 2012, the company an-whole phone” as something that nounced net income of“wouldn’t make much sense for us INR7.62 billion (US$138.6to do.” million), down by 37.3 per cent from INR12.2 billion, on revenue of INR193.5 billion, Alcatel-Lucent reports net up 14 per cent year-on-year.loss of €254 million in Q212 Stagnant EBITDA coupled Airtel’s EBIT in the quarter to end-June in Africa was US$62 million, up 23Alcatel-Lucent reported a net with higher depreciation and per cent from US$50 million, on revenue of US$1.1 billion, up nine per cent from US$979 millionloss for its second quarter and amortisation arising from en-announced that it is planning toreduce its headcount by 5,000 inan effort to further cut costs. Theresults make it the latest infra-structure vendor to suffer at thehands of the economic downturn, Unitech blocks Telenor’s attempts to sellalong with Ericsson and Huawei. The company reported a net loss Uninor assets in Indiaof €254 million (US$ 313 million)for the second quarter on the back India’s Unitech has se- future. of securing higher valuations.of revenue of €3.55 billion. The cured a court order blocking The Company Law Board Telenor had said that it wouldloss was particularly severe when the mobile network, Uninor has upheld a challenge by Un- make an offer if no other bid-the previous quarter’s €398 mil- from selling its assets prior to itech against the sale of net- ders emerged.lion net profit is taken into account. the network’s expected clo- work assets. Uninor said that If Telenor did buy the net- Revenue was down 7.1 per cent sure in August. it would appeal the ruling. work infrastructure, it wasfrom €3.82 billion reported in The network is a 67/33 joint Uninor had invited bids for seen as a precursor to re-en-Q211 but up 10.6 per cent from the venture between Telenor and network assets, which it was tering the market followingprevious quarter’s €3.21 billion. Unitech, and the two com- looking to sell before the net- the forthcoming re-sale of the panies are in dispute over its work closure in anticipation cancelled GSM licences.12
  • 14. International newsBulletin board Nokia reports Q2 results reflecting difficult market RIM unveils LTE BlackBerryPlayBook Research In Motion (RIM) haslaunched a LTE variant of its Black-Berry PlayBook tablet with built-in conditionssupport for cellular networks. The LTE BlackBerry PlayBook Nokia announced a ing price (ASP) of the Lumia billion. On an operating lev-tablet is also enterprise ready. It sharp fall in sales leading in range fell to €186 from €220. el, the loss amounted to €826can be managed with BlackBerry Q112, resulting in a loss of With the company having million, compared with a lossMobile Fusion and includes Black- €1.4 billion (US$1.73 billion) shipped 10.2 million smart- of €487 million in Q2 2011.Berry Balance technology, which for the period. phones during the quarter, In its Smart Devices unit,allows a user to utilise a BlackBerry During the three months this means that Symbian and net sales fell by 34 per cent toPlayBook for both work and per- (April to June) volumes of its MeeGo devices still make €1.5 billion, as volumes fellsonal purposes by keeping busi- Windows Phone-powered Lu- up more than 60 per cent of by 39 per cent to 10.2 mil-ness information secure and sepa- mia range increased to four these sales. lion units. More encourag-rate from personal information. million units. However, it Sales for the quarter ingly, average selling prices in- The LTE BlackBerry PlayBook also noted that on a sequen- amounted to €7.5 billion, creased both year-on-year (uptablet comes with 32GB of mem- tial basis, the average sell- down 19 per cent from €9.3 seven per cent) and quarter-ory storage and became available on-quarter (up six per cent)from Bell, Rogers and Telus in to €151, aided by stabilisationCanada on August 9, 2012. in the Symbian portfolio. Stephen Elop, Nokia CEO noted that Nokia’s mass- Indian government proposes market Mobile Phones unit2G licence fee reduction “demonstrated stability,”The Indian government has agreed with a two per cent year-on-to lower the proposed base prices year increase in shipmentfor new 2G licences, with a govern- volumes to 73.5 million.ment body known as the Empow- However, sales for this busi-ered Group of Ministers (EGoM) ness declined by 11 per centhaving recommended a base price year-on-year to €2.3 billion,in the upcoming auctions of be- with average selling pricestween INR140 billion to INR160 Nokia CEO Stephen Elop noted that sales in Nokia’s mass-market Mobile dropping by 14 per cent (sixbillion (US$2.5 billion to US$2.9 Phones unit declined by 11 per cent year-on-year to €2.3 billion, with average per cent over the prior quar- selling prices dropping by 14 per cent to €31billion) for a pan-Indian licence. ter) to €31.That is below the INR36.22 billion/MHz proposed earlier this year bythe Telecom Regulatory Authorityof India (TRAI), which would haverequired local operators to shellout more than INR180 billion for a Etisalat reaches deal over PTCL stake paymentnationwide 5MHz licence. According to local press reports, The Pakistan government a dispute over the transfer of ment every six months.operators will still be required and Etisalat are reported to assets from the government The settlement reportedlyto pay existing spectrum usage have settled a long running to the telco. agrees to a payment of US$700charges of 3-8 per cent on top of dispute over the price paid for According to the terms of the million by Etisalat, which is athe licence fee. a stake in Pakistan Telecom- agreement, Etisalat was due to reduction of US$100 million However, the EGoM has report- munication Company Lim- pay US$1.4 billion within one based on the valuation of theedly agreed to allow operators ited (PTCL) in 2006. month after the signing of assets not handed pay for licences in instalments Etisalat offered US$2.6 bil- the deal in early 2006 and the Long standing plans by Etis-with GSM operators only required lion for a 26 per cent stake remaining amount of US$1.2 alat to increase its holding toto pay 35 per cent up front, and in PTCL back in 2006 in billion was due to be paid in a controlling 51 per cent stakeCDMA players 25 per cent. staggered payments, but has equal instalments over 4 and have been on hold until the withheld US$800 million in a half years, with one instal- dispute is settled.14
  • 15. , SUBSCRIBE TO THE MEA S LEADING TELECOM JOURNAL DECISIVE COVERAGE OF TELECOMMUNICATIONS STRATEGY DECISIVE COVERAGE OF TELECOMMUNICATIONS STRATEGYWelcome to Comm. the monthly telecom journal, that charts the strategic decisions service providersare making across emerging markets in order to remain competitive. The publication incorporatesnews, analysis, data, and research on the fundamental issues affecting service providers in theMiddle East, Africa, and wider emerging market landscape. Comm. is free-to-post in the UAE. Post and packaging to countries outside of the UAE costs US$50 for nine issues annually, and is payable by PayPal online. International subscribers receive the issue by PDF at no additional charge. Should an international subscriber seek to receive a hard copy of the issue, a fee of US$50 per year is payable for the post and packaging of nine issues annually. Start receiving your monthly copy by subscribing below. Title: First name: Last name: Nationality: Company name: Position held: PO Box: City: Country: Contact telephone number: E-mail: Yes! I would like to subscribe to Comm. and receive a copy each month. I am an international subscriber, and would like to receive a hard copy of Comm. monthly Signature Date: Scan and email to Brought to you by Pursuit Mode Initiatives FZE
  • 16. Delivering on the visionMohammed Al Mannai, CEO of Q.NBN hasmore than 13 years of experience in networkplanning, deployment and optimisation withQtel, where he most recently served as seniordirector for Network Design and Rollout16
  • 17. Qatar National Broadband Network Qatar National Broadband Network (Q.NBN) is a private company owned by the government of Qatar and charged with the responsibility to roll out passive fibre infrastructure across the country. Given the Qatar’s ambitious digital plans, which are summarised under the Qatar ICT Strategy 2015 and further articulated through the Qatar National Vision 2030, Q.NBN is playing a critical and pioneering role with respect to public-private partnership ICT infrastructure investments in the Gulf“Q .NBN is a provider for the country. guiding principles for a equipment imminently catalyst for Q.NBN’s directive is in line sustainable economy and with testing commenc- competition,” with the Qatari govern- growth path for Qatar focus ing and services set to gosaid the company’s CEO, ment’s vision to become one on human, social, economic live in the short-term.Mohammed Al Mannai in of the most well-connected and environment develop- As part of the involve-an interview with Comm. “I countries on Earth with ment. Providing the high- ment with Qatar’s licensedbelieve what we are trying to respect to broadband; ambi- speed communications and operators, in April Q.NBNachieve is a first in the Gulf tions that are detailed in increased fibre capacity announced it had signedregion in so far as the costly the Qatar ICT Strategy 2015 Qatar requires to achieve an Infrastructure Accesspart of the deployment of and the Qatar National its ambitions is central to Agreement (IAA) with Qtel,passive fibre infrastructure Vision 2030. The aim for building on the relationshipis being absorbed by the 2015 is to see Qatar benefit- and cooperation estab- Q.NBN is a catalyst lished between the twogovernment,” he added. ting from information and Established last year, communications technol- for competition. I companies with a heads ofQ.NBN’s mandate is to roll ogy (ICT) solutions in key believe what we are agreement signed in Julyout passive fibre infrastruc- aspects of its society and trying to achieve is a 2011. The agreement lastture across Qatar, and in economy. Articulated in first in the Gulf region year represented the firstso doing, place the com- 2010, Qatar’s five-year plan step to defining a frame- in so far as the costly work through which bothpany in a position to offer ending 2015 contains thewholesale fibre backbone following measurable goals: part of the deployment parties could work togetherconnections and capacity to • Double the ICT sec- of passive fibre to support the govern-licensed operators, hasten- tor’s contribution to infrastructure is being ment’s goal of acceleratinging the uptake of broadband GDP (US$3 billion) absorbed the implementation of high-services. It is forecast that • Double the ICT speed broadband servicessuch uptake will cascade all workforce (40,000) government for households, businessesthe way down to consum- • Achieve ubiquitous and government agencies.ers being offered a much high-speed broadband ac- Q.NBN’s mission, which the Under the deal signedimproved and powerful fibre cess for households and company is diligently going in April, Qtel will supplyoptic broadband service businesses (95 per cent) about trying to achieve. Q.NBN with duct networkto empower their lives. • Achieve mass ICT The passive fibre network access and access to other Earlier this year the and Internet adoption that has so far been com- passive telecommunicationscompany received a 25 year by all segments of so- pleted by Q.NBN consists infrastructure over the nextlicence to provide Qatar ciety (90 per cent) of 6,000 connections, with 20 years. Such an arrange-with fibre optic broadband • Achieve wide accessibil- Al Mannai forecasting that ment is set to help reducethroughout the country, ity and effectiveness of all licensed network operators civil infrastructure costshaving been officially key government services (Qtel and Vodafone Qatar on the part of Q.NBN.endorsed as the fibre optic (160 online services) for the meantime) shall In May 2012 Q.NBNbroadband infrastructure Qatar Vision 2030’s four commence installing their went on to announce it summer 2012 17
  • 18. had signed an interim nections by 2015,” he added. view, as is the costing calcu- be attracted to invest inwholesale agreement with The fibre network’s speci- lation, though we are clear because the return on in-Vodafone, the first such fications have been tested that we shall charge licensed vestment is not that high,”wholesale agreement to to meet customers’ expecta- operators per connection.” Al Mannai acknowledged.enable a licensed telecom tions as well as to ensure Q. NBN will thus be of- “One of the government’soperators to use Q.NBN’s interoperability with legacy fering licensed operators goals is to have affordablenetwork to deliver telecom systems and Al Mannai is open access to a backbone broadband services avail-services to customers. confident the wholesale network without discrimina- able in the country, and it The signing represented a model being instituted by tion of any one party, and is willing to bear the initialmilestone in the relation- Q.NBN will prove com- agreement terms will be costs to achieve this. Soship begun between Q.NBN pelling to the licensed uniform across the board. while the government hasand Vodafone in 2011 with service providers it sells Al Mannai went on to ex- and will contribute fundsthe signing of a heads of connections to currently plain that while Q.NBN has to the entity, existing telcosagreement similar to the one as well as in the future. begun its life being owned are likely to also becomeQ.NBN inked with Qtel. shareholders in due course.” Under the interim whole- Our role at Q.NBN is to wholesale Al Mannai did not wantsale agreement reached with to be drawn on the capex connections to the service providers, so to offerVodafone, the cellco will estimation for the firstinitially provide broad- capacity or bandwidth. The wholesale agreement phase of the infrastructureband services to residential we plan to put in place is under review, as is the investment to end-2015,and business customers costing calculation, though we are clear that we though published reportsin Barwa City and Barwa in the media have sug- shall charge licensed operators per connectionCommercial Avenue. gested it may rise as high “By 2015 we should cover as US$500 million.95 per cent of the house- “Our role at Q.NBN is to by the government, over “The costs may vary quiteholds in Qatar and 100 wholesale connections to the time this is likely to change widely,” Al Mannai said.per cent of the business service providers, so to offer as private investors become “Depending on whether weestablishments in Doha,” capacity or bandwidth,” Al involved in the project. are rolling out infrastructureAl Mannai said. “In num- Mannai explained. “The “Passive infrastructure is to brownfield or greenfieldbers, this will account for wholesale agreement we plan not the part of networks areas, costs could vary by asapproximately 260,000 con- to put in place is under re- that typical investors would much as 80 per cent. So we have an estimate, but it’s not an exact figure, though fromA high percentage of copper based broadband the start we are looking tocoverage exists in Qatar but Al Mannai believes minimise costs as muchcustomers are keen to have this migrated to fibre, as possible by using anyand thinks much of the demand coming between nowand 2015 shall be from this segment of the market existing infrastructure that exists in-country,” he added The secretary general of Qatar’s Supreme Council of Information and Com- munication Technology (ictQatar), Hessa Al Jaber has been one of the driving forces behind the expan- sion and development of Qatar’s digital credentials, and she remains a staunch supporter of Q.NBN as a conduit for the country to catalyse digital development. Currently Qatar has among the highest broad- band penetrations in the world, however, it lags significantly behind leading nations in terms of speed, with current maximum18
  • 19. Qatar National Broadband Network Ray Hassan, president Ericsson Gulf Countries and Hassan Al-Sayed, ictQatar assistant secretary general, IT and ICT Government Sector signing the ICT MoU collaborate in a number ofspeeds of only 8 Mbps. And areas including “Technol-while the penetration rate Depending on whether we are rolling out ogy for Good” which coversis high with 70 per cent of infrastructure to brownfield or greenfield areas, initiatives such as sustain-homes having broadband costs could vary by as much as 80 per cent. So we ability through ICT solutionsat the end of 2011, Qatar’s have an estimate, but it’s not an exact figure, and also aims to use ICT topopulation is expected to though from the start we are looking to minimise unlock the potential of thedouble over the next five e-Economy such as e-Edu-years, meaning more lines of costs as much as possible by using any existing cation and e-Governmentconnection will be needed. infrastructure that exists in-country in Qatar and the region. Current data from ic- Other areas of collaborationtQatar estimates there are connectivity to every corner and 2015 shall be from this include revamping the ICT186,000 broadband lines of Qatar, including the most market segment,” he added. infrastructure, and ena-in the country, with nearly remote areas,” she added. As further evidence of bling platforms to support400,000 expected to be For his part, Al Mannai Qatar’s focus on improv- consumer driven Arabicnecessary by 2020. Q.NBN believes the overriding factor ing its ICT credentials, in content development, andaims to have 439,000 broad- driving broadband demand May Ericsson and ictQa- improving the quality andband lines by 2025, covering and uptake in Qatar is the tar announced the launch efficiency of ICT services.households, government basic desire for connectivity, of a strategic partnership In addition, Ericsson andentities and enterprises.  and Q.NBN is determined to that aims to boost the ictQatar will focus on ICT “As a relatively small help drive the Small Office adoption of ICT in Qatar. maturity in order to create amarket, relying solely on Home Office segment of The partnership, which knowledge-exchange basedattracting private invest- the market in particular. was formalised through a environment to increasement to build an expensive “To be frank, both the memorandum of under- the ICT usage in Qatarfibre network infrastructure traditional business as well standing, seeks to support while leveraging Ericsson’swould limit progress, delay as the traditional home seg- Qatar’s ICT Strategy 2015. global and local compe-advancements in important ment is driving broadband The MoU was signed by tence in the ICT industry.sectors and likely stall some demand significantly in Qa- Hassan Al Sayed, ictQa- All said, Qatar is a bristlingalready planned, forward tar,” Al Mannai said. “A high tar assistant secretary ICT and broadband marketlooking projects,” Al Jaber percentage of copper based general, IT and ICT Gov- to witness, and the suc-said. “This government- broadband coverage exists ernment Sector and Ray cess of policies institutedled national broadband but customers are keen to Hassan, president Erics- in the coming 20 years arenetwork effort will ensure have this migrated to fibre, son Gulf Countries. likely to be tied directly toprogress and keep our and I believe much of the de- As part of the partnership, the success of dedicatedcommitment to bringing mand coming between now Ericsson and ictQatar will entities such as Q.NBN. summer 2012 19
  • 20. Price vs. valueDespite a stock market share price that is languishing at more than 30 per cent below the levelit listed on the Oman bourse in November 2010, Nawras continues to be an energetic operatorthat is looking to maximise the opportunities data usage represents. Through the leveraging ofits various access technologies and the bundling of products and services, Nawras continues toexpand its base of operations, believing such a focus will generate the necessary good results N awras CEO, Ross a 4.4 per cent growth rate. Cormack believes the The fixed service customer telco has the neces- base grew by nearly 176 sary positive momentum per cent during the half to to continue propelling the 36,787 customers, though company forward in Oman, Nawras’ overall revenue for despite coming through a the period was down 1.7 tough operational period that per cent to OMR95.3 mil- has impacted its financial lion, delivering a net profit performance as well. of OMR19.5 million, down In the first quarter of 11.8 per cent from OMR22.1 2012 the telco reported million a year earlier. revenues fell by 2.7 per “We recently moved into cent to OMR46.8 million new open plan office space, (US$121.6 million), while the Nawras Campus, where net profit also fell by 19.1 per our people can see one cent to OMR9.8 million. another and easily interact,” The company’s total Cormack told Comm. “It is subscriber base rose by a fantastic location for us 2.4 per cent year-on-year to be able to make decisions to reach 1.99 million. quickly and there is a palpa- Nawras attributed the fall ble energy that drives us.” in revenues to a reduction in Cormack freely admits that SMS revenues that was not the competitive landscape fully compensated by growth in Oman has become more in data revenue. In addition, aggressive in the last few revenue in Q1 2012 included years, not least through theCormack freely admits that the competitivelandscape in Oman has become more aggressive in a one-off accounting adjust- presence of value-focussedthe last few years, not least through the presence ment of OMR658,000. resellers together with theof value-focussed resellers together with the The second quarter of 2012 omnipresence of a well-omnipresence of a well-entrenched incumbent marked a stabilisation in entrenched incumbent. Nawras’ operational and Nawras’ competitive ap- financial results, though proach appears to be based the telco’s first half perfor- on focussing primarily on mance still highlights the the factors within its own competitive nature of the control, more so than look- telecom market in Oman, ing to what other players and the on-going pressure are doing in the market and on margins. Nawras closed reacting to those factors. the six months to end-June “It would be fair to say with a customer base of that in some areas the huge 2.03 million, representing increase in use of data in20
  • 21. NawrasOman outstripped our abil-ity to provide it,” Cormack At the end of June Nawras announced it had entered intoacknowledged. “We prob- an agreement with Huawei to upgrade its Radio Accessably did not build as fast as Network (RAN) by advancing all sites to enhancedwe should have done but 3G+ and increasing coverage, in-building penetration, capacity and the speed of the entire networkthat is all changing nowand going forward, we areconfident that we will man-age and support the growingdata demand. We also havenew people in our top lineup, with a world leadingCTO and CMO contribut-ing additional expertisefrom worldwide markets.” Part of Nawras’ plan tokeep abreast with the surgingdemand for data is a projectit describes as ‘turbocharg-ing’ its network, which inessence means upgradingthe network for increasedcapacity and performance. To this end, at the end ofJune Nawras announced ithad entered into an agree-ment with Huawei to upgradeits Radio Access Network(RAN) by advancing all sitesto enhanced 3G+ and in-creasing coverage, in-buildingpenetration, capacity and thespeed of the entire network.At the same time Nawrassaid it would be launch-ing 4G LTE technology. Nawras is deploying a LTEFDD 4G network in the1800MHz spectrum band,and together with the Tel- It would be fair to say that in some areas the with an overlay of 4G atecommunications Regulatory huge increase in use of data in Oman 1800MHz also being intro-Authority’s release of two duced in the major cities.” outstripped our ability to provide it. We probablymore 3G+ frequencies, the Cormack broadly describestelco is looking to at least did not build as fast as we should have done but the telecom sector as beingtriple its mobile broad- that is all changing now at an inflection point givenband capacity. This upgrade the growth and prevalence ofprogramme is due to begin Wadi Kabir, Muttrah, Qurm, Oman. At the same time over-the-top (OTT) players,in August in Al Amerat. Azaiba, Al Khuwair, Ghala, as new 3G+ sites are being with social networking and Around 30 per cent of sites Baushar, Mawaleh and The introduced, the WiMAX the consumption of videoare set to be upgraded before Wave, by the end of the year. home broadband network content via Internet-basedthe end of the year and All major cities will enjoy will be extended further. companies such as YouTubecustomers are forecast to im- LTE coverage by June 2013. “Over the coming 2-3 years accounting for the major-mediately notice the differ- In addition to the launch we intend to turbocharge ity of today’s data demand.ence as they start to receive of 4G LTE, 3G+ population every base station, resulting Nawras’ broadband networkfast 3G+ and 4G services. The coverage will rise dramati- in 97 per cent of the popu- development approach is a4G LTE network will cover cally from 53 per cent to 97 lation having 3G+ access,” diversified one, incorporatingall major areas of Muscat per cent over the next three Cormack confirmed. “Hun- a number of access tech-governate including Ruwi, years including greater cover- dreds of such base stations nologies spanning mobile,the central business district, age in remote areas across will be running by year-end, wireless and fixed-line. Last summer 2012 21
  • 22. Strategically, Nawras’ priorities include the additionof content and greater participation by the operator market with the offer ofin the value added services ecosystem. The telco is global connections, innova-also placing significant emphasis on reducing the tive services like Businesscost of churn, and “delighting customers” Mousbak, which permits calls within a company includ- ing prepaid at no additional charge, as well as desktop self-care,” Cormack said. Strategically, Cormack says Nawras’ priorities include the addition of content and greater participation by the operator in the value added services ecosystem. The telco is also placing signifi- cant emphasis on reducing the cost of churn, and as Cormack likes to describe it, “delighting customers”. The floundering share price, however, does remain a cloud over Nawras’ operations. Having become a publically listed entity with much fan- fare and excitement, the stock has consistently lost value,October, for example, the knocking almost US$400telco began offering a free Over the coming 2-3 years we intend to million off of the value oftrial of high-speed broadband turbocharge every base station, resulting in 97 the company in the less-to around 200 customers than-two years since listing. per cent of the population having 3G+ in Al Mabailah North. Despite this disappoint-For a three month period, Hundreds of such base stations will be running ment, Cormack remainscustomers were invited to by year-end, with an overlay of 4G at 1800MHz optimistic for the company’sexperience the benefits of also being introduced in the major cities future, and insists thatFibre-To-The-Home (FTTH) should Nawras continue towith download speeds of improve upon its operationalbetween 10-100 Mbps. ment of the business market entiate the telco’s services in activities and innovate; this The telco is working with that is non-government-relat- the market more effectively. effort will be reflected inHaya Water Company and ed, where incumbent Oman- For instance Nawras has an improved stock price.the TRA to implement tel enjoys distinct advantages. devised a discounted inter- “I am confident that thethe fibre optic technol- Nawras has developed an national calling number, and ingredients we are puttingogy needed to provide offering of cloud services earlier this year launched into the company right nowhigh-speed broadband. for small and medium sized a promotion whereby 800 are allowing us to go into this A selection of four different enterprises, for example, Bz spent by a subscriber on exciting new world of data inFTTH pricing plans offering and is pushing its global Nawras services in a day an energetic way and I firmlya variety of different speeds VPN offering as well. The would be rewarded by an believe we are on the rightwere trialled to enable Naw- introduction of fixed number additional 800 Bz of credit to path to achieving the rightras to fine tune its offerings portability for corporates is be used on that day. Nawras results,” Cormack said. “Weahead of the full commercial another development Nawras has also devised bundled ser- shall continue to focus on im-launch of the service, though expects to benefit from. vices to tie-in with the hugely proving the range and qualityCormack describes Nawras’ On the consumer front, popular Samsung S3 device, of the services we provide, onactivities in this area as being Nawras offers a plug-and- users of which are typi- improving our operationalin “relatively early days”. play home broadband service cally high data consumers. performances and delighting Nawras also continues to over WiMAX, while its “With respect to our opera- our customers. I am confidentcourt the business segment in consumer mobile business tions in the business market, that the share price shouldOman, particularly the small is focussed on the offer and we believe it is all about duly reflect the good workand medium sized enterpris- delivery of bundles and seg- relationship building. We that is being achieved and thees, and the 40 per cent seg- mentation efforts that differ- are developing the corporate progress that is being made.”22
  • 23. Key performance indicators Untapped potential: Africa’s remaining growth markets in focus The exhibit below presents the mobile cellular penetration rates in each of 10 sub-Sahara Afri- can countries. As shown, the cellular penetration rates range from 16.4% in Ethiopia, to 83.1% in Ghana as of end-2011. The low penetration rate in Ethiopia is anticipated, as the market is a state- owned monopoly. The penetration rates indicate ample room for growth, especially given the sub- Saharan region is well known for the prevalence of multi-SIM cellular users. Moreover, penetration rates in low income North African markets such as Egypt have reached 116%, which suggests significant growth potential for markets in sub-Saharan Africa. Cellular adoption and penetration rates in selected countries (2011) Country Total cellular subscriptions (000s) Cellular penetration rate Ghana 20,752 85.4% Ivory Coast 17,928 79.0% Senegal 9,696 72.1% Zimbabwe 8,700 66.5% Tanzania 25,823 61.2% Zambia 8,165 60.1% Madagascar 9,500 43.5% Mozambique 8,095 36.8% DRC 15,613 21.5% Ethiopia 14,198 16.4% Total selected countries 138,471 41.6% Cellular penetration rates (2011) Source: Operators, regulators, Arab Advisors GroupFor further details or enquiries to purchase the comprehensive report,Untapped potential: Africa’s remaining growth markets in focus, published by Arab Advisors Group in association withPursuit Mode Initiatives FZE, contact Karl Hougaard, commercial consultant, tel. +971 50 400 1220 or summer 2012 23
  • 24. Towering ambitionAfrica has been at the centre of a growing number of tower sale and lease-backannouncements in recent years, with such arrangements typically involving the saleof the passive elements of network operators’ infrastructure. Initially it appeared to bean emerging business model that benefitted all parties, though the recent insolvencyissues of some tower operators raises questions whether the model is as compelling inthe long-term as it was initially made out to be Tower companies are planning to deploy multi-operator solar powered cell sites in a bid to slash their diesel consumption significantly in the coming years24
  • 25. Independent tower companiesA t the end of July it was have been looking to sell the ing markets,” explains Javier sociated costs of running and announced that South towers to a tower company Gonzalez Piñal, partner at maintaining the towers could Africa based mobile for approximately US$500 Oliver Wyman management increase this to 60 per cent,towers infrastructure opera- million, but sources indi- consultancy in Dubai. “Op- IHS CEO Issam Darwish toldtor, Africa Cellular Towers cated that a block sale of erators tend to value the one- Comm. “Selling and leasing-had been served with a liqui- the entire portfolio proved off cash payment resulting back may offer significantdation order by a high court difficult prompting the from the transaction itself. cost savings, as the operatorin South Africa after failing telco to consider a sale As margins decline and cash no longer has to incur theto stave off bankruptcy. on a per-country basis. flow is stretched, operators cost of running towers.” The company had strug- Last year, American Tower appreciate the opportunity Darwish believes the offer-gled against rising debts and Corporation announced the to monetise non-core assets ings from the various towerfalling revenues for the past completion of the acquisition above the long-term reduc- companies vying for businessyear, and a few months ago of approximately 960 existing tion of the total cost of own- in Africa are pretty unnamed creditor started towers from South African ership over 10 or 15 years.” In summary, he described theproceedings against it. mobile network opera- IHS is a Nigeria-based roles of a tower infrastructure The fortunes of Africa Cel- tor, Cell C for an aggregate tower company that has been company as follows: site plan-lular Towers contrast sharply purchase price of approxi- successful in appealing to ning, bearing in mind thewith the wave of tower deals mately US$140 million. At the expectations of mobile network rollout plans of pro-between mobile network the time, American Tower network operators in Africa spective customers; obtain-operators and independ- said it expected to acquire having last year secured an ing of necessary regulatoryent tower companies that from Cell C approximately equity investment from the approvals; erection and com-have made the headlines in 440 additional existing tow- World Bank Group’s IFC, missioning of tower and theAfrica in the last few years. ers during the year for an along with co-investors relevant equipment; provision In August, for example, aggregate purchase price of Investec and FMO, to help of support services such asMTN South African was approximately US$60 million. the company build and back-up power, air-condition-reported to be considering ing and security; and the pro-selling off up to half of its vision of turnkey solutions In every tower deal, the price per tower istowers network following to telecom companies suchsuccessful sales by its opera- the key metric. It must be high enough to as sourcing of equipment,tions in Ghana and Uganda. provide compensation to the seller but low testing and maintenance.MTN owns around 6,000 enough to offer upside for the buyer. This factor For its part, IHS has beentowers in South Africa. is driven by local conditions such as country- in the sub-Saharan African MTN South Africa’s tower market with operations specific capex requirements and current opexmanaging director, Karel in Nigeria, Sudan, KenyaPienaar commented that levels to run the infrastructure. In emerging and Ghana for a little over athe motivation behind any markets, it has been remarkably stable, at decade and although it begansuch sale would be a move to around US$100,000 per tower by building towers on behalfimprove the efficiency of the of mobile operators, theoperator’s capital structure, The tower company was also acquire mobile phone tow- company has now expandedarguing that infrastruc- looking to acquire up to an ers in sub-Saharan Africa. its offering to buildingture on the ground is not a additional 1,800 towers that IHS is the largest telecom- buy-to-let towers as operator’s core focus, were either under construc- munications infrastructure IHS has expanded rapidly inand as such could be better tion or would be constructed provider in West Africa and recent years, with revenuesleveraged by a third-party. over the next three years in August 2011 it went on surging nearly 50 per cent be- At the beginning of this for an additional aggregate to announce that Nigerian tween 2009 and 2010, fromyear, Etisalat Group was purchase price of up to ap- CDMA network operator US$70 million to US$107 mil-reported to be mulling bids proximately US$230 million. Visafone Communica- lion. The company employsto sell its towers network “The tower deals that we tions had agreed to sell and over 1,000 people who havein Africa. The telco has have been witnessing generate lease-back 459 towers for built more than 2,000 sites;subsidiaries in 10 coun- value for all parties, in part an undisclosed amount. managed more than 4,000tries on the continent and because of the different set “It is estimated that towers sites; owns 900 co-locationowned and operated around of expectations held by telco account for almost 50 per sites and provides best-in-4,500 towers at the time. operators and tower compa- cent of the total capex of a class service with uptime of Etisalat was reported to nies, particularly in develop- mobile operator and the as- more than 99.95 per cent. summer 2012 25
  • 26. conditions such as country- and are often left to be en- specific capex requirements joyed by the shareholders of and current opex levels to the tower company, and are run the infrastructure. In not necessarily discounted in emerging markets, it has been the initial selling price paid remarkably stable, at around to the network operator. US$100,000 per tower.” “There are several possible In a recent interview reasons why operators hold Charles Green, co-founder such low expectations on the and CEO of another of value maximisation capa- Africa’s burgeoning tower bilities of the tower com- companies, Helios Towers pany post-transaction,” Piñal Africa, described the appeal states. “An opex improvement of companies such as his in might be more difficult to allowing operators to focus achieve for international on what they do best, servic- tower specialists in emerg- ing customers rather than ing markets (with limited managing infrastructure. local presence) than for the This advantage, Green telco players that have been described, enables opera- operating these networks for tors to increase coverage and many years. Also, high co- capacity quickly, without location ratios could be more bearing the operational difficult to obtain in less risk or long-term capi- mature markets,” he adds. tal requirements. It also Oliver Wyman still con-IHS’ Darwish suggests selling tends, however, that opera- has potentially significantand leasing back towers offerssignificant cost savings, as the positive implications for the tors are satisfied when theyoperator no longer has to incur the industry’s carbon footprint. off load their balance sheetscost of running infrastructure The outsourcing of telecom and generate a positive infrastructure management impact on the debt position. is increasingly commonplace The improvement to their with 50 per cent of towers financial position is enough of a benefit that they do According to Oliver Over the next five years another 30,000 to not really mind leaving theWyman’s Piñal, the suc- 50,000 towers will need to be constructed in upside to the shareholders ofcess of IHS and other tower the tower company itself. Africa to keep up with demand and most of thiscompanies like it is based on Looking ahead, Darwisha simple economic model: will be done by independent tower companies forecasts strong growth • Operators sell part of their while simultaneously mobile operators will prospects for the independentpassive assets to a profes- continue to sell their tower portfolios to tower companies that contin-sional tower company. That independent tower companies like IHS ue to exercise and deliver oncompany optimises processes the right economic models. Into reduce total cost of owner- his opinion, there are almostship. Operators receive a tial cash injection, leverages in the US and 60 per cent in 100,000 towers in Africa cur-part of their expected return the stable cash flow (opera- India now run by independ- rently, with independent op-in the form of a lump sum tors’ rent) and a higher asset ent companies. Operators are erators owning around 8,000(typically cash) payment. valuation at exit (through the facing increasing competi- amongst them, while mobile • The tower company com- co-location of multiple ten- tion, falling revenues per operators own the rest. “Overbines the stable cash flow it ants) to obtain rates of return user and need to reduce opex the next five years anotherreceives from the reference of 20 per cent – 30 per cent, and capex, and independent 30,000 to 50,000 towerstenant (the selling operator) and sometimes even higher. tower companies provide a will need to be constructedwith the upside from ad- “In every tower deal, the solution to them, Green said. in Africa to keep up withditional clients (competing price per tower is the key Piñal suggests other demand and most of this willoperators) co-locating in the metric,” Piñal explains. “It traditional value drivers be done by independent towersame towers to increase the must be high enough to post-tower transaction, such companies while simultane-value of the assets purchased. provide compensation to as the tenancy ratios, or the ously mobile operators will • Typically, the deal also the seller but low enough to expected opex savings, seem continue to sell their towerincludes a financial partner offer upside for the buyer. to be “nice to have” for the portfolios to independentthat, in exchange for an ini- This factor is driven by local operators but not essential, tower companies like IHS.”26
  • 27. Movers & Shakers Eissa Al Suwaidi Eissa Al Suwaidi has been appointed chairman Abdullah Salem Al Dhaheri, Mubarak Rashid Al of Etisalat Group. Al Suwaidi also serves as an Mansouri, Shoaib Mir Hashim Khoory, Abdullah executive director at Abu Dhabi Investment Mohammad Saeed Ghobash, Essa Abdulfattah Kazim Council. He is also a director of Abu Dhabi and Mohammad Hadi Ahmad Abdulla Al Hussaini. National Oil Company for Distribution, Etisalat is 60.03 per cent-owned by the Emirates International Petroleum Investment Company, Investment Authority, which is owned by the UAE Abu Dhabi Fund for Development and Emirates government, and the chairman and government Investment Authority. He also serves as the board representatives are directly appointed by His chairman of Abu Dhabi Commercial Bank. Highness Sheikh Khalifa bin Zayed Al Nahyan, Six new board members have also been appointed President of the UAE and the Ruler of Abu Dhabi by to the Etisalat board. The new appointees are federal decree. Carlo Alloni Khaled bin Abdulaziz Al Ghuniem Mats Norin STC Group’s incoming CEO, Khaled bin ST-Ericsson announced changes in its Carlo Alloni has been Abdulaziz Al Ghuniem, assumed his role organisation, appointing a new chief appointed executive VP officially on June 18. technology officer and simplifying its R&D and head of operations Al Ghuniem is considered one of the and product organization structures. for Ericsson in the most experienced corporate managers in Mats Norin has been appointed executive Middle East region. In Saudi, where he has held various senior VP and CTO. Norin has been heading up his new role, Alloni will positions. Prior to being appointed to Ericsson’s Mobile Broadband Modulesoversee Ericsson’s operations throughout lead STC Group, he was CEO of Al-Elm business which he started in 2007. Anthe Middle East; ensuring customer Information Security Company. executive committee has been created,expectations are met by leveraging the Al Ghuniem has also been engaged as a chaired by CEO Didier Lamouche andcompany’s global knowledge network to full time consultant for the Defence and composed of COO Carlo Ferro, CTO Matsenable the development of best practice tools Aviation ministry, as well as an associate Norin, Marc Cetto and Ronen Ben-Hamou.and methods throughout the region. professor at the Faculty of Computer Alloni had previously held the position and Information Sciences at King Saud Steve Baileyof president, Ericsson North East Africa, to University. He is a member of the board Virgin Mobile South Africa’s managementwhich he was appointed in 2010. An Italian of directors of various Saudi companies has changed with CEO Steve Bailey steppingnational, Alloni joined Ericsson in 2001 and associations. He holds a bachelor’s down. The company has identified awhere he held multiple positions in sales, degree in computer science from King highly experienced candidate, and has alsomanaged services/business unit Global Saud University, and both a Masters and welcomed Anton Landman, formerly CFOServices and business unit Networks in a PhD degree in Electric and Computer of DigiCel Panama, in the role of CFO.number of Ericsson offices across the globe. Science from Carnegie Mellon University Anton will take the role of acting CEO until in the US. the new CEO is appointed on August 15. Sanjay Jha Mikael Grahne Juha Putkiranta Millicom International announced that Nokia has announced a number of changes Sanjay Jha has stepped its president and CEO, Mikael Grahne is to its senior leadership. Juha Putkiranta has down from his role to step down from the position at the end been appointed executive vice president of as CEO of Motorola of October. He is being replaced by Hans- Operations; Timo Toikkanen as executive Mobility and has been Holger Albrecht, currently the president vice president of Mobile Phones; Chris replaced by long-time and CEO of Modern Times Group, an Weber as executive vice president of Sales Google employee, entertainment broadcasting group. and Marketing; Tuula Rytila as senior viceDennis Woodside with immediate effect. Hans-Holger has also been a member of president of Marketing and chief marketingGoogle did not explain the reasons for the Millicom board of directors since May officer; and Susan Sheehan as senior vicethe switch-over at the top, although it 2010 and will step down from this role president of Communications. Jerri DeVardhad been rumoured earlier this year that with immediate effect. steps down as chief marketing officer; MaryWoodside would take over the top job. He Grahne has served as Millicom’s McDowell steps down as executive viceoversaw the takeover of Motorola Mobility president and CEO since March 2009, president of Mobile Phones; and Niklasfrom Google’s end. having joined Millicom in February 2002 Savander steps down as executive vice Former Qualcomm executive Sanjay Jha as COO. president of Markets.joined Motorola Mobility in 2008.28
  • 28. Ahmed Al Derbesti John Buchanan Vodafone announced the retirement of Qtel Group has named responsibility in the early days of the John Buchanan, its deputy chairman Ahmed Al Derbesti as Group’s expansion outside of Qatar. and senior independent director, as of its its new Group chief He has also held the positions of board meeting on July 24, 2012. Following operating officer, who executive director, Customer Care; the change, Luc Vandevelde will become will report directly to executive director, International senior independent director. the Group CEO. Services; and most recently, chief officer Al Derbesti has worked with Qtel Wholesale and International Services, Khalifa Al ShamsiQatar since 1985 and has held a variety with responsibility for national andof positions, including executive director, international voice, data and roaming Etisalat Group announced theGroup Strategy, taking on this key services. appointment of Khalifa Al Shamsi as chief digital services officer for the newlyObaid Bokisha established Etisalat Digital Services Unit. The new division, which will focus on various industry verticals such as Etisalat Group Group’s strategic business directions for machine-to-machine (M2M), cloud announced the the UAE and across its 16 other markets. services, commerce, digital advertisement, promotion of Obaid Bokisha will be in charge of all major advanced communications, digital Bokisha from senior contracts and agreements for the Group entertainment, and video services aims VP – Mobile Networks, across all of its regional and global markets. to boost the group position in the digital Etisalat Group, to his Bokisha had been in his previous role for ecosystem and drive innovation andnew position as chief procurement officer the last three years, and brings with him advanced services to the group customers.for the Group with immediate effect. over 13 years of experience in the field of Al Shamsi joined Etisalat as a graduate The appointment will support Etisalat technology. trainee 19 years ago, and has since held various senior managerial positionsBassam Hannoun within Etisalat UAE. Prior to his most recent appointment, Al Shamsi held the position of senior VP Technology Strategy Wataniya Telecom of Wataniya Mobile Palestine, where he for Etisalat Group, to which he was announced that Bassam was responsible for the successful IPO appointed in 2010, leading the Etisalat’s Hannoun has been and growth of operations. Previously he foray into the digital space. appointed as CEO and was CEO of Jordan’s leading WiMAX will commence in his operator, Wi-tribe Jordan, a subsidiary of Patrick Spence new role soon. the Qtel Group. In addition to over twenty Abdulaziz Fakhroo resumes his role years industry experience in Europe and Research In Motion (RIM) confirmedas deputy CEO having been appointed the Middle East, Hannoun has a PhD the resignation of its global head of sales,acting CEO following the resignation and in telecommunications engineering Patrick Spence, the latest in a seriesdeparture of Scott Gegenheimer in June and holds a Masters of Business of high-profile executives to leave the2012 to pursue other opportunities. Administration with a focus on strategic BlackBerry manufacturer. Hannoun was most recently the CEO marketing. A RIM spokesperson said that Spence was leaving to take on a “leadership position in a different industry” when he Kwon Oh-hyun rose to become the largest handset steps down on June 15. Samsung Group has named Kwon manufacturer in the world. “As before, “The sales function will report directly Oh-hyun as the new CEO of Samsung vice-chairman Kwon will oversee the into Kristian Tear, our newly appointed Electronics, its handsets and consumer company’s component business but, [COO] when he starts this summer. electronics subsidiary. as chief executive, he will also handle In the interim, the sales function will Kwon Oh-hyun is an internal corporate-wide affairs,” Samsung said in a report to [CEO] Thorsten Heins,” the promotion having headed the company’s statement. spokesperson said. component business and has been credited Spence’s resignation may have been with its turn around. Outgoing CEO, Choi Abdulrahim Al Nooryani due to him being passed over for the Gee-sung is moving to become the head of Former Etisalat Group chief procurement chief operating officer role in favour of corporate strategy at the parent company officer, Abdulrahim Al Nooryani, has Tear. Samsung Group. been appointed chairman and CEO of London-based Spence is a 14-year RIM Under his stewardship, Samsung Etisalat International Pakistan. veteran. summer 2012 29
  • 29. Maximum dataThe demand for broadband data across Africa continues unabated, and inZimbabwe one of the first of a dozen licensed Internet access providers,Dandemutande Investments’ Umax, launched service in June promising a whollydifferentiated offering to what consumers have so far been used toI n June, Umax launched Umax’s WiMAX network Weeden said prior to com- Internet access provider in Zimbabwe’s capital Ha- together with the customer mercial launch the company (IAP) Class A telecommu- rare, operating under the premises equipment. had a six-month pilot phase nications licence that itumbrella of Dandemutande “We do have plans to over which period it added was awarded by the PostalInvestments, the holding extend the network beyond a few hundred friendly cus- and Telecommunicationscompany for Utande Internet Harare,” Mike Weeden, tomers. “We are now aiming Regulatory Authority ofServices, a well-known Dandemutande’s interim for several thousand new Zimbabwe (POTRAZ) incommunications provider in CEO said. “We will initially customers within the next July 2009. The licence allowsZimbabwe’s telecom sector. expand the network within 12 months,” Weeden said. the company to construct, The operating com- Harare with further infra- Umax’s initial network operate, develop, extend, andpany Umax runs a WiMAX structure and then the next capacity is for 10,000 users maintain a public data andnetwork at 2.5GHz and phase will focus on geo- and the company offers Internet access network, andpromises amongst other graphical coverage through- three bundles for custom- to offer voice over Internetthings: super-fast 1 Mbps out Zimbabwe,” he added. ers, all based on speeds Protocol (VoIP) services. Toconnections for all cus- date, most of the licensedtomers; 24-hour customer We do have plans to extend the network IAPs have not launchedsupport; an expertly man- beyond Harare. We will initially expand the commercial services.aged network for maximum Competition in the broad- network within Harare with furtherup time and superior and band space in Zimbabwe isconsistent quality; and infrastructure and then the next phase will frantic as service providersmultiple Max mini-stores focus on geographical coverage throughout look to capitalise on thewithin some of Harare’s Zimbabwe data opportunity, with thoseleading retail locations. enjoying deeper pockets Umax claims to also be Dandemutande Invest- of 1Mbps, with 60 days having been investing inthe only broadband Inter- ments is majority owned by validity. These are: Mega- backhaul and backbonenet service provider in the Masawara Plc; a Jersey reg- max with 2GB at US$70; infrastructure. Earlier thiscountry to offer a loyalty istered investment company Mightymax with 6GB at year for example, TelOne,programme – Max Rewards that is primarily focused US$140 and Monstermax Zimbabwe’s state-run mo-– for all customers. on acquiring interests in with 12GB at US$240. nopoly fixed-line operator Alvarion, a company companies and projects Umax indoor access de- announced the completionproviding optimised wireless based in Zimbabwe and the vices are sold for US$200 of the laying of a fibre cablebroadband solutions address- southern African region. including VAT, with the along the Harare – Bulawayoing the connectivity, cover- Dandemutande Investments outdoor access device highway, with the telcoage and capacity challenges claims to have made an retailing at US$475, includ- stating that it was in theof telecom operators, smart initial capital investment ing installation, with the process of connecting allcities, security, and enter- of over US$17 million as Wi-Fi router and VAT. cities and towns in between.prise customers supplied part of its Umax roll-out. Dandemutande holds an The capacity of the cable30
  • 30. Broadband in Zimbabweis 10Gbps and TelOne is babwe, and offers some of in Southern Africa, whichreportedly now working on the most competitive broad- provides backhaul be-a cable linking Bulawayo to band Internet services in the tween most urban areasVictoria Falls and another country via its ADSL service, and last mile connectivityto Beitbridge. The Beitbridge which it has a monopoly on. in the main cities of Zam- Zimbabwe’s 12 IAP class Acable is set to further con- For its part, Liquid Tel- bia, Zimbabwe, Botswana, licenseesnect to an undersea fibre ecom recently confirmed Lesotho and South Africa.cable system in South Africa, that the construction Its network is the first Africomwith TelOne already own- of its fibre link between to cross country borders Aptics Tradinging a fibre cable running South Africa and Zimba- and covers some of the Aquiva Wirelessfrom Harare to Mutare for bwe was progressing well. most challenging parts of Dandemutandeonward connection through Starting from the north the world where no fixed Ecoweb (Pvt) LtdMozambique to the EASSy of South Africa, extend- network has existed before. PowerTel Communicationsundersea fibre cable system. ing from Johannesburg Liquid Telecom operates Telecontract Along with PowerTel, an- to Zimbabwe, the 521 as a wholesale carrier in TelOneother state-owned IAP, and kilometre link connects to all five countries as well as Transmedia CorporationLiquid Telecom, a private Liquid Telecom’s existing an operator in Zambia and Valley Technologiesplayer and subsidiary of fibre network and will carry Zimbabwe, providing virtu- BlueSat AccessEconet Wireless Interna- much-needed capacity from ally unlimited broadband Pecus Enterprisestional, TelOne has one of the the submarine cables inland. capacity to operators, ISPs,most expansive terrestrial Liquid Telecom has built banks, mining companies Source: Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ)fibre cable networks in Zim- the largest fibre network and other corporations. Zimbabwe’s capital Harare has seen a dramatic rise in broadband investment and coverage, both wireless and wireline, in recent years summer 2012 31
  • 31. Comment Time to set new long-term goals… I was quite surprised are announcing currently. in some Arab countries, but when I attended the We have witnessed the more profoundly everywhere now traditional Arab proliferation of strategic in the world, with young Advisors telecommunications plans promising that each people in emerging markets conference this year. Not by of the main telecom groups gaining access to all sorts the topics. Not by the content in the region would emerge of information for the of the presentations. What as amongst the largest in first time in their lives. was most surprising to me the world. There’s nothing It has been calculated that was the “mood” expressed wrong with this aspiration. global data traffic currently publicly or in private by This fantastic ambition and amounts to five exabytes of many of the senior managers commitment of resources data per year, or 5,000,000 present: for the first time led to significant successes terabytes, or 5,000,000,000 in nearly ten years, I could in mobile, with penetration gigabytes. It has also been not sense a clear direction rates in some Arab countries estimated that this number about where the industry is growing to be on par or will increase within five years going and what the industry higher than the ones seen to 130 exabytes of data per needs to do. That was a first. in some developed markets. year, a huge increase in just Let’s go back in time. 15 We also saw some successes five years, and operators in years ago, the Arab world in fibre-optic deployments. the Middle East do not appear was late in terms of telecom However, the future is in ready for the data surge. development compared to data and the region still has Beyond this lack of other regions. The challenge data penetration levels that preparation, what is more was clearly how to give the are well below what is seen obvious is the missed population access to voice in other parts of the world, opportunity that it telephony. This led to the with an average 14 per cent represents. On the same (partial) liberalisation of broadband penetration. basis as the impact of mobile the telecom markets of the Looking ahead, while voice penetration has been region; then the creation of regulators consider ways calculated at an increase of local champions; then their to lower end-user prices, 0.6-1.2 percentage points expansion with public and/ arguably without enough of GDP growth for every 10 or private funds; then full consideration for the extent percentage points of mobile mobile penetration; then of financing required to penetration; the impact of a value-added services; then deploy high speed networks; 10 per cent rise in broadband better devices; then more and operators seem to be data transmission has services; then the increase wondering how to carry been calculated as having of operational costs with the terabytes of data at high speed a 1.2-1.4 percentage point offering of advanced services; while still making profit; increase on GDP growth. and finally the reductions of the world is changing very Such a rise in GDP would margins that many operators quickly. Not only politically represent opportunities for32
  • 32. Commentinnovative entrepreneurs andmillions of new jobs, whichwould be welcome in a regionwhere over 50 per cent of thepopulation is below the ageof 25 years and where theoverall unemployment rateis estimated at 26 per cent. I believe this region needs togo back to having more ICTambition if it does not want tofall behind and stay behind.It is time for the industry/region to take objective stockof its achievements and, likeit did 15 years ago, set longterm policy objectives, andidentify what is required tomake sure that broadbandobjectives and customer needsare met. The region needs anew long-term developmentvision. Not in theory. Not suitable scenarios, and ICT can be used to support out of poverty in that region,in terms of telecom services, define how they should be this transformation. Such and allow the middle-classbut in terms of activities funded and duly executed. long-term dialogue with all to grow dramatically.”enabled by telecom. No need Difficult choices will have stakeholders is commendable. The above summary is justto decide that we want to have to be made such as between I thank you if you have read as pertinent for the Middlethe “best” possible services services offered in different this opinion piece this far. If East as it is for Africa. It is upat the “most” reasonable parts of each country; or you have, and it has contained to us to decide whether wecost, or that we want to offer between services offered matters you can relate to, want to continue defining“better” services. Without to clients paying more please talk about it whenever telecom in terms of themetrics, that would just be and clients paying less; or and wherever you can, so that expansion of the thingstelecom jargon, which would allowing telecom operators we start focusing on what we we are currently doing; ornot trigger the type of long- to keep extra profits, for need to do tomorrow to create whether we want to redefineterm investments that are instance in exchange of them the future that this region what we need to achieve, andrequired in our industry. The committing to invest and/ strives towards. If you are then give ourselves the bestregion needs to consider how or support long term goals. still not convinced that this chances to achieve can create the million jobs Challenges are present with needs to happen, please readthat are needed for its youth, respect to growing economies the following conclusionsand to enable economic and driving up employment of an independent study Philippe Vogeleer is an executiveactivity through telecom. It rates in emerging markets, published at the end of 2011 with Vodafone Group. He worksthen needs to engage with though positive examples about sub-Saharan Africa: on long-term development inall constituents of society do exist. The South African “Releasing digital dividend the Middle East and Africaabout concrete targets, for authorities have, for instance, spectrum to stakeholders region. He is based in London.instance in terms of data initiated a dialogue with the willing and capable of Prior to his current role Philippespeed per person per area. The public over the achievements achieving broadband spent seven years in the Middleindustry then needs to create and pitfalls of liberation in development is likely to East. The comments expressedscenarios, and assess how the past 15 years since it represent the creation of up in this article are Philippemuch would each of these was introduced. They have to 27 million additional jobs Vogeleer’s alone. For furtherscenarios cost; and through a been interested in discussing over a five- to 10-year period. exchange of views, Philippeprocess of further engagement what South Africa would That would bring up to 40 can be contacted at philippe.with society select the most look like in 2030, and how million additional people summer 2012 33
  • 33. InvestmentopportunitiesAccording to a research report recently published by Arab Advisors Group in cooperation withPursuit Mode Initiatives, the publisher of Comm., the room for cellular growth in sub-SaharaAfrica remains significant. The demand for cellular services coupled with the ample room forgrowth on the sub-continent makes for attractive factors for regional and global investorsI t is anticipated that the economy of sub-Sahara Africa is set to grow at rates high- er than global averages with the World Bank projecting Africa’s GDP to grow by 5.3 per cent and 5.6 per cent respectively in 2012 and 2013 against the aver-age global growth rates forecast at around 2.5 per cent over the same period. The exhibit below lists some of the main investment opportunities in sub-Saharan Africa.Main investment opportunities in African cellular markets Investment opportunity Relevant investors Greenfield cellular licences Mobile operators, network vendors Handset market, especially 3G enabled handsets and Handset vendors smartphones, as well as entry-level voice devices Mergers and acquisitions Mobile operators Content providers, IT solution companies, Value added services start-ups IT vendors, network vendors, tower leasing Cost saving solutions companies, systems integrators Operators, network vendors, virtual Network expansion operators Source: Arab Advisors Group34
  • 34. Africa researchRecent cellular licences granted to operators (starting January 2009) Country Type of licence Operators Date of launch My Cell Has not launched commercially Egotel Has not launched commercially Mobile network operating Tanzania Rural Neto Has not launched commercially licenses Smile Has not launched commercially Excellent com Has not launched commercially Mobile network operating Ghana Glo Mobile April 2012 license Mobile network operating Mozambique Movitel May 2012 license Source: Arab Advisors Group, telecom regulatorsCellular licences cent and 30.4 per cent in the selected added service that has been a successfulNational regulators continue to grant countries included in this report. revenue generator beyond basic SMS iscellular licences even in markets across Moreover, we believe smartphones mobile money. The current uptake ofsub-Saharan Africa with comparatively will grow at a faster pace than fea- basic mobile money transfers suggestslarge numbers of cellular players. The ture phones, which is consistent with that there is demand for fully fledgedmost pronounced examples of such in- insights provided by regional operators, mobile money services in sub-Saharanclude Tanzania, where an additional five such as MTN Group. The forecasted Africa. The Arab Advisors Group be-cellular licenses have been granted by growth in smartphones will be driven lieves that regional operators shouldthe TCRA since 2007, in a country that by the demand for mobile data, 3G cov- evolve mobile money from mere cashalready counts seven licensed operators. erage investments by operators, and the transfers into fully fledged bankingWe advise caution in the investment in reduced cost of smartphones in light of services by utilising mobile SIMs fornew licenses granted in countries where handset manufacturers pushing ultra- money deposits, credit, withdrawals,further growth potential is limited. low cost smartphones on the continent. and purchases, among other activities. We also believe it is worth keeping According to France Telecom Orange, We believe that the duplication of mo-a keen eye on changes in policy in a by 2011, smartphones accounted for 11 bile money models and best practicescountry such as Ethiopia, which may be per cent of the operator’s subscription into other vibrant industries, such asmonopolistic market today, but could base in Africa. These subscriptions ac- government services, health, and edu-move to liberalise at short notice. count for 82 per cent of the operator’s cation, could also create viable revenue cellular network traffic. On a similar streams for regional operators, and willMergers and acquisitions note, MTN Group stated that by the drive technology adoption in a crucialSub-Saharan Africa has enjoyed a vi- end of 2011 it had 5.5 million 3G period where operators are heavilybrant mergers and acquisitions history devices on the network which included investing in broadband the past decade. Bharti Airtel’s acqui- 3.6 million smartphones and 1.4 mil-sition of Zain’s assets in Africa in 2010 lion dongles and other data devices.for US$ 10.7 billion was one of thelarger deals concluded. MTN Group at- Innovative value added services This is an extract from Untappedtempted to acquire Orascom Telecom in The rollout of 3G networks and dis- potential: Africa’s remaining growth2011, and pan-regional players remain semination of smartphones in the markets in focus, a report publishedalert to opportunities that may arise. Arab region has helped in the emer- by Arab Advisors Group in associa- gence of local content and mobile tion with Pursuit Mode Initiatives FZE.Mobile device opportunities application start-ups. We believe that Contact Karl Hougaard, commercialThe Arab Advisors Group projects cel- similarly an opportunity arises for consultant, tel. +971 50 400 1220lular subscriptions to grow at a 2012- local content production in Africa. or on for more details2016 CAGR ranging between 5.4 per The most pronounced regional value about the report or to order your copy. summer 2012 35
  • 35. Support whereit is needed In 2011 Ericsson counted 12 managed services contracts in the region and 70 million subscribers under management at the end of the year. The demand for such services underlies an increasing awareness by service providers to be first-to-market with products and services as well as the cost savings inherent in well-planned and implemented efficiency drivesE ricsson has more than 15 years’ experience managing multi-vendor, multi-technologynetworks for operators glob-ally and during 2011 enteredinto 70 managed servicescontracts worldwide thatcovered a subscriber basenumbering 900 million. Ericsson’s managed servicesoffering is built on globalscale and proven processes,methods and tools. It con-sists of activities within net-work design, build, planningand operations. Its offeringconsists of five segments: • Network man-aged services • IT managed services • Broadcast man-aged services • Network sharing • Managed servicesfor enterprises The telecom technologyprovider manages multi-vendor and multi-technologyenvironments, enabling Akesson says service providers areservice providers and focussed on business innovation through the development of newenterprises to concentrate vertical markets to addresson their core business. Allservice segments are flex-ible in terms of scope andsetup, and can be adapted36
  • 36. Ericsson Managed Servicesto fit individual needs. by the growth in machine- as the signing of a deal to prevail short-term. Ericsson also has exten- to-machine applications, with Zain Iraq last year for Ericsson’s managed servicessive experience in advising and the opening up of new US$650 million in a five-year portfolio may imminentlyand supporting operators services given the invest- network outsourcing agree- be boosted further withto secure network quality, ment in mobile broadband. ment. Under the agreement, persistent rumours that therevenue enhancement and “We have solutions to help Ericsson agreed to optimise, company is interested in ac-improved cost efficiency. The service providers deliver on modernise and manage quiring rival Nokia Siemenscompany manages networks these x-factors, for instance IT operations and Zain’s Networks’ (NSN) businessin which more than 50 our OSS/BSS offering, which mobile network in Iraq that support systems (BSS) divi-per cent of the equipment facilitates modernisation, included more than 3,700 sion, according to reports.comes from other vendors. simplification, and consoli- sites across the country. Ericsson has been busy By utilising Ericsson’s dation of network elements,” In Q411, Ericsson’s sales in expanding its OSS/BSSmanaged services expertise Akesson said. “In managed services were almost equal unit, including the acqui-and experience, service services we are working in to the sales in networks in sition, completed at theproviders and enterprises: areas that include the net- the Middle East, highlighting beginning of this year, of • Gain the right com- work, IT, network sharing, the twin dynamics of slowed US OSS company Telcor-petence in the right and even broadcast, where infrastructure investment dia for US$1.15 at the right time there are real efficiencies during the period and con- At Ericsson, the belief is • Can be confident that to be gained by the ser- tinued interest from service that good support systemsnetwork and business com- vice provider,” he added. operators in the benefits that and business processesplexity is well managed On-going endorsements of can be driven by managed provide for opportunities to • Achieve a fast and Ericsson’s managed services services engagements. be seized and turned intocost-effective launch vision in the region come value. They do not just help aof new services from engagements such as company operate a business, In managed • Reduce costs that given when MTN Af- but also to develop it, scale • Secure predict- ghanistan a deal in May for services we are working it, optimise it and transformable performance. Ericsson to operate and op- in areas that include it in a cost-efficient way. timise its mobile network as the network, IT, Ericsson also believes that Ericsson’s Staffan Akesson, well as its charging systems network sharing, and good support systems andvice president and head of and value added services business processes bring or- even broadcast, whereManaged Services for Region such as mobile applications. ganisations closer to custom-Middle East believes that The deal was part of an there are real ers and places such organi-operators are chasing a num- agreement that covers end- efficiencies to be sations in a pole position,ber of ‘x-factors’ in order to to-end managed services. gained by the service ready to respond to customerachieve success, and Ericsson Under the managed ser- provider needs and grab new op-has been instrumental in vices agreement, Ericsson portunities as they arise.helping them realise such. agreed to deploy its end-to- As the scale and scope ofIncreasingly service providers end solutions and systems The vitality of managed business increase, so doesare looking to improve the to help MTN in Afghanistan services to Ericsson itself is the challenge to providecustomer experience through achieve better network ef- also clear to see, with the operators with the sim-the offer of personalisation, ficiency, simplify operations technology company report- plicity needed to remainwider choice of services, and ensure better quality ing that its Global Ser- efficient, innovative andand bundling; while at the network through 24/7 net- vices and Support Solutions always focused on thesame time looking to drive work monitoring. The agree- showed strong performance customer efficiency through ment was in line with MTN’s in the Q212 to end-June, Bringing together cutting-modernisation of networks, growth strategy and its with revenues for the period edge technology, world-outsourcing models and de- continuous focus to enhance up 26 per cent and 47 per leading consulting, systemsvelopment of cloud services. customer experience through cent year-on-year respective- integration, and managed Akesson says service pro- improved network capacity. ly. Ericsson described that services, with an unmatchedviders are also focussed on More than 20,000 employ- the underlying business mix, holistic insight into thebusiness innovation through ees have been transferred with higher share of cover- operator’s challenges makesthe development of new to Ericsson from operators age projects than capacity Ericsson a partner to countvertical markets to address around the world, through projects, was unchanged in on in a fast changing worldthe opportunities offered large arrangements such the quarter and is expected packed with opportunity. summer 2012 37
  • 37. FTTx MENA Small Cells MENA a hub and access point to wider markets September 24-25, 2012 October 9-10, 2012 from North Africa and South Asia, all of Dubai, UAE Dubai which are a huge draw to global brands. Each year GITEX technology week holds a themed Global Leaders Summit. Building on last year’s extremely successful From complex, multi-tiered concrete In 2011, this focused on ‘innovation event, Informa presents the 5th annual jungles to sparse deserts, providing the in leadership’ thanks to a new era of FTTx MENA summit, bringing together MENA landscape with good network transformation leadership, most recently operators, vendors, content providers, coverage is both complex and demanding. seen in runaway successes like Facebook utility companies and regulators. This Small cell solutions present an exciting and Groupon. World class presenters event provides an ideal opportunity option to both improve mobile coverage shared strategies, ideas and technical to meet key decision makers from the in hard to reach areas and also to increase insider information on how to become an entire ecosystem to discuss experiences, capacity in network hotspots. innovative leader. challenges and solutions and hear the With a mobile penetration rate of over Conferences co-located at GITEX latest emerging trends and technologies in 90 per cent, it is an exciting time for 2012 include industry briefings, the FTTx marketplace. the small cells industry across MENA, Consumerisation of IT, Cloud Confex, The Middle East market remains a hotbed but networks are being pushed to their and Digital Strategies. of activity in terms of fibre deployment. capacity limits. All major mobile network With coverage of UAE homes nearing operators across the region are trialling ITU Telecom World ‘12 100 per cent and further deployments by and deploying programmes in an effort to October 14-18, 2012 key operators in Saudi Arabia, Qatar and cater to their subscribers’ coverage needs. Dubai, UAE Bahrain among others, the region is ripe As the latest addition to our Small with opportunity and alive with activity. Cells Global Series, run in exclusive Featuring a fully-interactive programme, partnership with the Small Cells Forum, ITU Telecom World 2012 is the leading pre- and post- conference workshops, an Small Cells MENA will bring together platform for the global ICT community Etisalat masterclass, and presentations senior representatives from the leading to connect, debate, network and share from the leading operators in the region, mobile operators across the region. knowledge on the critical issues shaping this is an event not to be missed. Make sure you join your peers in Dubai the future of the industry, and of the to share your learnings from the region’s world. Drawing on its unique reach as the Telecoms World Middle East 2012 small cell and femtocell trials and leading UN agency for ICT issues, ITU will October 2-3, 2012 deployments, discuss the practicality of bring together key stakeholders, decision- Atlantis, Dubai available backhaul solutions to support makers and thought-leaders from across your service and debate the technical the entire industry ecosystem, service ConferencesInMiddleEast.aspx and commercial future for small cell providers, manufacturers, government, solutions. regulatory bodies, academia and global After seven successful years, Telecoms media in five days of debate in Dubai, World Middle East is back to tackle GULFCOMMS (GITEX) UAE, from 14 – 18 October. the biggest issues bursting out of telco October 14–18, 2012 A dynamic agenda comprising an boardrooms. Dubai, UAE exclusive Leadership Summit, Forum panel sessions, workshops, roundtables, Meet industry leaders keynotes and networking events will Join over 600 attendees to discuss the GITEX is one of the largest trade events explore the radical transformation of the tools and strategy to help you navigate on Dubai’s calendar. The event is a ICT industry, the implications for policy, through the changing landscape of gateway for global brands to access regulation and competitive strategy - and the increasingly competitive telecoms the Middle East, the fastest emerging the crucial importance of ensuring that industry. and investment ready ICT market. It is connectivity in a transformed world is also one of the longest running annual universal, fair, open and secure. What’s new for 2012 conferences in Dubai – 2012 will be its New technologies, trends and The event will be framed with morning 32nd year. innovations - game changers - are and afternoon keynote plenary sessions, In 2010 the exhibition comprised over revolutionising the industry sector making sure the hard hitting issues are 3,500 domestic and international IT and the way in which we live, work, debated by game changers and decision vendors offering their latest products to communicate and do business. The makers in the telecom industry. 136,000 ICT professionals. It also acts as major categories of game changers38
  • 38. shaping the debate at World 2012 include rebranded event is TV Connect MENAmegatrends, such as the ageing global 2012. We’re maximising our brand PO Box 53402, Dubai, UAEdemographic or the shift in economic potential through a future forward name Tel: + 971 4 369 5604power from West to East; industry that addresses all the exciting aspectsdynamics, such as the emergence of new of TV delivery including IPTV, OTTtv, Publisher: Tawanda Chihotaplayers or consumer-driven growth; and multiplatform services and interactive Lic. No 1468/2011CC, Fujeirah Free Zonetechnologies such as cloud computing or content creation. editorialM2M. Understanding the challenges and Operator partner for the show remainsunparalleled opportunities arising from Etisalat, which is preparing an OTT Principal: Tawanda Chihota tawanda@comm.aethis transformation is critical to success in focus day on October 29 in cooperationpublic and private sectors, developed and with Informa. They will also organise an News editor: Michelle Kasper michelle@comm.aedeveloping markets alike and across all App Developers competition at Khalifaindustry sectors, not just ICT. University for apps that work seamlessly Sales & Advertising on all platforms: set top boxes, tablets and Commercial consultant: Karl HougaardTV Connect MENA 2012 TVs. +971 (0)50 400 1220October 30-31, 2012 TV Connect MENA is the only major sales@comm.aeDubai, UAE TV event in the region that will include PR ODUCTI ON all TV providers in the connected TV delivery ecosystem. It has created a level Art director: Tamara EgerTV Everywhere is here. We launch a brand playing field for creatives and technology tamara@comm.aenew event title for our much acclaimed developers alike to bring the next CIRCULATI ONIP&TV Forum MENA that hosted 750+ generation TV experience and introduce Distribution manager: Roy Varghesevisitors in 2011 with one third of those services like pause, rewind, catch up and roy@comm.aefrom board, CXO and director level. The fast forward in the linear TV package. Pursuit Mode Initiatives FZE Contributors’ opinions do not necessarily reflect those of the publisher or editor and while every pre- caution has been taken to ensure that the information contained in this journal is accurate and timely, no liability is accepted by them for errors or omissions, however caused. Articles and information contained in this publication are the copyright of DVV Media Middle East (unless otherwise stated) and cannot be reproduced in any form without the written permis- sion of the publisher. Printed by UPP, UAE summer 2012 39
  • 39. Comm. café Comm. included comments from Issam Darwish, CEO of Nigeria-based independent towers company, IHS in its general feature regarding the dynamics of the industry on the continent. Here, we undertake a more detailed Q&A session with him to discuss what the industry looks like from his company’s perspective An African story Comm.: Why does the independent tower their network in rural areas to accom- stages of network-building, where there company business appear to have picked modate these communities. is low penetration. up quickest in Africa as opposed to other Furthermore, the data market also Also, regulatory bodies are increas- emerging markets? remains hugely untapped in Africa. In a ingly becoming aware of the benefits report by the GSM Association, 96 per of infrastructure sharing and are ID: There have been some incredible cent of mobile subscriptions in Africa expected to place a greater emphasis on changes to the African telecommuni- were prepaid voice services. Over time, operators sharing infrastructure pos- cations sector over the last five to ten we anticipate data to become a more sibly by offering incentives to promote years. In the past, sub-Saharan Africa popular choice and this would mean sharing. was characterised by low telephone more investment in base stations/tow- penetration, slow network growth due ers. Comm.: What is the scope of IHS’ activi- to variations in local network infra- ties on the continent, and what are the structures, political instability, poor Comm.: What trends can be seen in Africa company’s growth plans? strategic planning from governments, in tower sharing amongst network opera- lack of skilled labour, underfund- tors? ID: IHS has been in the sub-Saharan ing and poor strategic planning from African tower market with operations stakeholders. This has changed over ID: A number of tower sales to third- in Nigeria, Sudan, Kenya and Ghana the last few years, with governments party operators have recently been for a little over a decade now and implementing telecommunications announced. Operators are seeking to: although it began by building towers policy reforms, paving the way for pri- firstly, monetise their assets to fund on behalf of mobile companies, it has vatisation and allowing operators to be future roll outs; secondly, reduce their now expanded its offering to building independently managed. This has also operating costs by securing a lower buy-to-let towers as well. led to an increase in greater investment rental rates; and lastly, to roll out fu- The company employs over 1,000 as investor confidence returned to the ture towers without significant capital people and has a strong operational continent. allocations track record, to date having: built more Other reasons could be attributed to Tower sharing in Africa is becom- than 2,000 sites; managed more than the fact that Africa is home to over one ing increasingly widespread and this 4,000 sites; and owning 900 co-loca- billion people, of which 70 per cent trend will continue into the foreseeable tion sites. live in rural areas. These people have future as operators realise the contri- created a high demand for telecommu- bution of sharing infrastructure in Comm.: Would IHS look to expand its base nications services. Previously, installed relation to maintaining profitability. As of operations outside of the continent? network capacity was low in Africa, new technologies (4G and broadband) especially in rural areas. As time went are rolled out and investments made ID: We are continuously on the look- by, the urban areas were developed but in licence acquisition, many operators out for opportunities across Africa and the rural communities continued to will come under increasing pressure the Middle East. Both regions offer the lack the infrastructure even though the to share deployment costs and share right combination of wireless demo- demand remained high. Operators are infrastructure. Sharing will also enable graphics, population size, stable politi- now playing catch up and rolling out operators to spread the risk of the early cal climate and ease of operating.40
  • 40. COMInG SOOn Arab Advisors Group AfricA-focused report Untapped Potential: Africa’s Remaining Growth Markets in FocusStay tuned for Arab Advisors’ insightful cellular landscape report coveringten sub-Saharan African countries. The report - Untapped Potential:Africa’s Remaining Growth Markets in Focus - provides in depth analysisof cellular market and consumer trends in each of the countries under review.Prepared in cooperation with Dubai-based telecom information platformPursuit Mode Initiatives FZE, the report is ready for delivery in June 2012.The comparatively low penetration rates in Africa have been attractingglobal and regional investors to roll out and acquire cellular networks. TheArab Advisors’ sub-Saharan Africa report focuses on the countriesof Democratic Republic of Congo (DRC), Ethiopia, Ghana, Ivory Coast,Madagascar, Mozambique, Senegal, Tanzania, Zambia, and Zimbabwe.Highlights include: • Overviews of political, economic and cellular regulatory landscapes. • Market dynamics on a country level, including five-year market projections including subscriptions and revenues. • Profiles and analysis of pan-African mobile operators. • Analysis of emerging trends in sub-Saharan Africa’s cellular market. • Investment opportunities in the region.FOR FURTHER DETAIlS OR EnqUIRIES TO PURCHASE THE REPORT, COnTACT Karl Hougaard, Commercial consultant, Tel. 971 50 400 1220,