|Issue:||Africa and the Middle East 2006|
|Topic:||Wireless – building the Middle East and Africa|
|Author:||Jose R Figueroa and Ali Amer|
|Title:||Corporate Vice President and Regional Manager, Senior Director of Sales|
Jose R. Figueroa is Corporate Vice President and Regional Manager of Motorola Networks, Europe, Middle East and Africa (EMEA) and Latin America & the Caribbean. Mr Figueroa previously served in various leadership roles at Motorola including as general manager for the East region of the United States and in executive positions in Motorola’s paging sector, personal communications group and cellular subscriber sector. Ali Amer is the Senior Director of Sales for Motorola Networks & Enterprise’s Middle East, North Africa and Pakistan (MENAPAK) region. Since joining Motorola, he has held a number of engineering and business management positions including as Motorola’s Director of Sales for North Africa and General Manager for Motorola Morocco. He was previously a research engineer for Motorola in the USA in the Advanced Manufacturing Technology Organization, and holds a patent in technology development.
In Africa and the Middle East (AME), wireless solutions will dramatically affect people’s lives and stimulate the local economy. A recent survey found that 62 per cent of small businesses in South Africa and 59 per cent in Egypt believe, despite call costs, that mobile phones had increased their profits. AME governments are looking to wireless broadband to benefit education, healthcare, and overall economic development and operators see an opportunity to build their business while benefiting the communities they serve.
We have already witnessed the mobile telecommunications industry’s first major phase of expansion in North America, Western Europe and parts of Asia. While the transition to ‘mature market’ status in these regions has been impressive, we can soon expect the same growth and momentum, and anticipate the increase in subscriber numbers, in emerging territories. In just five years, another one billion people will connect to mobile networks – a landmark that operators in Africa and the Middle East will play a key role in achieving. The potential for further expansion is even more exciting. By 2010, the Middle East will double its mobile subscriber base. In Africa, market experts anticipate that the market will expand by 137 per cent between 2004 and 2008. Interestingly, although subscriber number projections from an IDC study for Nigeria show an increase from 3,093,615 to 17,233,440 over the five-year period to 2008 and in Kenya from 1,623,848 to 4 million, the figures represent just over a tenth of these countries respective populations. Indeed, the Middle East and African markets will be prominent players in fuelling the mobile industry’s second phase of growth that will see the worldwide population of mobile users increase by 33 per cent to 3 billion by 2010. Particularly in the Middle East and Africa, wireless solutions can dramatically impact people’s lives, which accounts for the strong demand we see today and will continue to see into the future. In addition, there is a growing recognition that the availability of mobile phones stimulates the economy: they enable farmers and fishermen to check prices before leaving for market, people can easily transfer money and workers can locate and maintain employment. The Centre for Economic Policy Research highlighted some of these factors in a 2005 survey of mobile customers in Africa. It concluded that mobiles save travel time for people living in rural communities – 85 per cent of the respondents in Tanzania and 79 per cent in South Africa said they had enhanced contact and relationships with families and friends as a result of being connected. On the business front, 62 per cent of small businesses in South Africa and 59 per cent in Egypt believe, despite call costs, that mobile phones had increased their profits. As part of the same LBS School study, the researchers concluded that for every increase of 10 mobile phones per 100 people GDP increases by 0.6 per cent per year. The core strategy of ensuring that low-cost technological solutions can deliver high performance is carried over into network design. There is a growing belief that networks in emerging markets must provide from the outset, or through upgrade, the option to support a broad range of services, albeit with changes to traditional configurations to address the particular topographical and revenue challenges presented in each market. Today’s more affordable wireless solutions remove limits for service providers in both high growth and mature markets. The efficiency is achieved by incorporating micro base stations for rural connectivity, backhaul offerings for call transmission (that can be routed locally), and a media gateway for lower call transport costs. When the signal between a phone and base station is strong, both the handset and the station use less power to stay in touch – a clever feature that enhances battery life. Continuing the power theme, high power macro base stations now available mean that operators need to run fewer of them. Today, there is also wide range of power solutions available; these include wind and solar options to drive base stations where access to electricity is scarce. The use of wireless or satellite technologies to connect mobile engineers over IP with a central maintenance centre reduces maintenance overhead. Facilities that combine database, fault management and traffic analysis in a single operation further reduce overhead. Africa and the Middle East (AME) markets are increasingly looking beyond voice services to ways that wireless broadband can benefit education, healthcare, and overall economic development. WiMAX and unlicensed mobile broadband systems will be available this year to extend the data options. These IP-based access mechanisms lower the cost of supplying high-speed data and provide the option of easily upgrading networks as customers’ expectations evolve. New cost-effective technologies for emerging markets It is clear that demand is strong in emerging markets and growth in subscriber numbers will be unprecedented – easily surpassing the most aggressive expansion phases experienced in the now mature markets. Operators should therefore consider systems that combine high-volume call capabilities with the ability, as needed, to easily add data services. There is a growing realization in many countries that communications play a fundamental role in economic health. As governments seek to address the technical divide between developed and developing regions, operators have a significant opportunity to fulfil their business objectives while benefiting the communities within which they work. When assessing the network infrastructure to support these objectives it’s important to bear in mind that working in emerging markets requires intelligent solutions to technical challenges. The remarkable range of technologies available to telecoms providers today, combined with changing customer demand, leaves operators in the AME region with the dilemma of how best to provide affordable high-capacity voice products and deliver value-added wireless broadband. In addition, operators need practical strategies to combine fixed and mobile services all in one franchise. Indeed, providers in the AME need to understand the complete range of business models available to them. Acquisition, flexibility and coverage Wireless broadband offers three core advantages. It is cost-efficient to acquire, it is flexible and it expands the range of options available to create, enhance and extend coverage. The technology enables the wireless delivery of premium services with the high levels of security and quality of service associated with fixed-line networks; additionally, there is no need for expensive overhead or ground wires, microwave or complex control software. Wireless systems provide highly cost-effective alternatives for backhaul (connection to the backbone network) and leased line connection. Since a great many consumers and businesses have broadband and WiFi subscriptions, they are familiar with access devices; for that reason, they can install their own customer premise equipment (CPE) at a considerable cost saving. Based on IP protocols, wireless broadband is inherently flexible; systems can be used to provision services from scratch or integrated into existing networks. Put simply, the technology enables service providers to reach more people more easily. It supports a range of existing and new business models. Wireless provides residential broadband for converged fixed/mobile voice and data services. Wireless can also provide and maintain high capacity private networks or even ‘light’ a city with wireless connectivity for public access, public works and public safety. The catalyst for innovation The term revolutionary is used and abused to describe new technology, but wireless broadband as the catalyst for a new cycle of innovation is just that – revolutionary. Wireless innovation, seen in municipalities, campuses and enterprises, brings universal broadband access and improves productivity, promotes knowledge transfer and collaboration and improves security and safety. Wireless innovation is helping areas throughout the world, blighted by the digital divide, gain access to the Internet and all its information and access to learning. Benefiting from the low cost of IP technology, WiMAX promises to deliver economical, high-speed, wireless broadband. Traditional GSM operators in Middle East and Africa can benefit by using WiMAX to generate an alternative revenue stream and to enter the fixed market using the latest wireless broadband technologies. With faster interface speeds, the services that subscribers can access will dramatically advance. Application developers are harnessing broadband delivery speeds to create new and exciting ways to interact with content; this will make communication more intuitive, realistic and fun. Video and group conferencing will also enrich communications. Enhanced devices that support Internet, digital video broadcasts, video capture, music and gaming will transform entertainment. Given the speed of broadband, downloading an album will take less than a minute, subscribers will play games with others across the network, and planning and navigating a trip will require little more than a mobile device. The development of a variety of innovative wireless broadband access technologies has enabled new business models. Service providers, testing and implementing these new technologies and business models, are fostering significant structural change within the industry. Convergence of fixed and mobile services Relationships between operators, services and the customer have been governed by the limitations of technology. Subscribers have often needed at least two suppliers – one for mobile, another for broadband and fixed-line services. Wireless broadband based on IP removes the technical barriers that separate the cellular, cable and fixed environments. Converged services like fixed- mobile substitution using wireless broadband are already available. Furthermore, the implementation of IP standards for core network interaction, the level of convergence and, competition is set to increase. By 2010, according to a study by Maravedis, the global market for wireless broadband equipment should reach US$4 billion. Challenge usually comes with opportunity. The wireless broadband sector is no different. In addition to intense competition, companies seeking to market wireless broadband face an array of infrastructure options from WiMAX, to unlicensed spectrum interfaces, to mesh networks, to backhaul and broadband over power lines. Whatever solutions operators in Africa and the Middle East choose, the ultimate winners will be the subscribers who will gain entry to a new world of economic and communications potential.