That said, conducting an auction for valuable frequencies or for the right to operate a telecom business in conditions of restricted entry (and potential high profits and profile) is no simple matter. Auction design is an esoteric art. It would be foolhardy to embark on designing an auction without specialized help. So it appears the PTA got caught between two contradictory directives: (1) hold the auction in three months or less; (2) go through standard procedures to obtain the services of a consultant. End result, auction postponed.

The first sign of missing the deadline emerged when PTA invited applications for hiring an international consultant by March 26 – just two days before the first auction of Instaphone licence.

The applications were invited quite late as PTA had completed three-fourth of the required work, said an official of the finance ministry. However, PTA alone cannot be blamed for the delay.

According to official documents, ASC committee chairman Dr Abdul Hafeez Shaikh had on January 6 endorsed the PTA proposal to auction the licence without hiring any consultant.

However, industry people later advised the PTA chairman not to take any responsibility and follow the set procedure to ensure transparency, said one of the three people who were informally approached by the PTA chairman to seek advice.

Irrespective of the on-going, completely unnecessary, “controversy” surrounding auction of 3G in Pakistan, allotting 3G frequencies to telecom operators is extremely urgent and essential for Pakistan. We have already been left behind by others who used to be our followers in 2G. Mobile broadband – or 3G – should have been introduced here already four years ago. The delay has made us lose huge opportunities relating to job creation, international trade, economic growth and Foreign Direct Investment (Telecom FDI 2007: US$1,824 mil and 2011: US$ 79 mil). Not to mention letting the technology gap between the advanced countries and us widen even more, despite the fact that more than 70% of our population is below 35 – normally considered early adopters of modern technology.

Read his full statement.

The New York Times discusses how the data flood is playing out in the US. The projections are that the networks will have to carry the total traffic they carried in all of 2010, in just two months in 2015 in the US.

Cellphone plans that let people gobble up data as if they were at an all-you-can eat buffet are disappearing, just as a new crop of data-gobbling Internet services from Netflix, Spotify, Amazon, Apple and the like are hitting the market or catching on with wide audiences.

These services use far more data than simply checking e-mail or browsing the Web, so their heaviest users may find themselves running over their plan’s monthly allotment and paying extra.

The wireless carriers say their tighter limits will affect only a small percentage of customers. And they say they are simply trying to get ahead of an exploding appetite for data and avoid problems with overburdened networks.

The Internet shutdown severely disrupted the flow of the YouTube videos and Facebook and Twitter posts that have allowed protesters and others to keep track of demonstrations, since foreign news media are banned and state media are heavily controlled. Both land lines and cellphones are so frequently monitored by Syria’s feared secret police that Skype had become a major means of communication among activists, and its loss as a tool may be a blow to the protest movement. Government Web sites, including those for the Ministry of Oil and the state news agency, SANA, remained online.

Two-thirds of Syria’s Internet network went offline at 6:35 a.m. Friday, said James Cowie, an analyst at Renesys, an Internet analytic firm, in a cascading blackout that took 30 minutes.

Forty of the country’s 59 Internet pathways were disabled, including Syria’s entire 3G mobile network, run by the country’s only telecom provider, Syriatel, which is owned by Rami Makhlouf, Mr. Assad’s cousin.

“People that want to use their smart phones to Tweet or read Web pages cannot,” Mr. Cowie said. “All of the IPs on those phones appear to be down.”

Phone service was also heavily disrupted across the country, and for the past several days, rights activists have reported that water and electricity had been shut off in a string of towns in central and southern Syria

Our research was presented at a “deep dive” session on m applications attended by around 100 people. The slides are here. You will not be able to see the video that I started with, from the above link. The video of Chamara is available here instead.

I concluded by discussing the powerful notes from the CKS interview with Zayad of Bangladesh, where both his current use of mobile voice and the services he would like to see being offered. I had to mention that the biggest barriers facing Zayed include the terrible uncertainty in the Bangladesh telecom sector and the delays and errors in the release of 3G frequencies.

But I tell them that new, new stuff gives zing to an operator. That Mobitel in Sri Lanka got a lot of energy from 3G, even on the 2G side.

Now comes more concrete support: If not for the i Phone, T Mobile would not have been sold, say some.

Until Apple introduced its highly popular touchscreen device in 2007, which went on to become the world’s leading smartphone, Deutsche Telekom had been generating decent sales from its American operation, with growth in some years surpassing that achieved in Germany.

But after the iPhone went on sale, sold exclusively at first by AT&T in the United States, T-Mobile USA began to lose its most lucrative customers, those on fixed monthly plans, who defected to its larger American rivals — AT&T and Verizon Wireless, which began selling the iPhone in February.

The percentage of T-Mobile USA’s contract customers fell to 78.3 percent in 2010 from 85 percent in 2006, according to the company’s annual reports. During 2010 alone, T-Mobile USA said it lost 390,000 contract customers to rivals.

“The iPhone effect cannot be underestimated in this decision,” said Theo Kitz, an analyst at Merck Finck, a private bank in Munich. “Without being able to sell the iPhone, T-Mobile was in an unsustainable position and T-Mobile USA became a problem child.”

One of the major problems in Bangladesh is the lack of certainty about whether or how the licenses of four leading mobiles operators, which expire in 2011, will be renewed. Economic theory and common sense say that unless an investor knows how long he has an asset, he will not invest in it. Thus, theory would predict a steep decline in investment in each of the networks as they approached 2011. This is bad, given the enormous potential for growth in the Bangladesh market, especially in enabling Digital Bangladesh through wireless platforms. A necessary condition for Digital Bangladesh is the release of 3G frequencies and the announcement of a roadmap regarding 4G.

Yet, paradoxically, auctioning or otherwise giving 3G frequencies at this point would create more problems that it would solve. What would an operator who did not know whether he would have a 2G network in a few months do with 3G frequencies? What would a newcomer bid for 3G frequencies, not knowing whether the current 2G operators would be in the game or not?

This is the question the speaker from Asian Tiger poses:

“For instance, there is a lack of clarity about the renewal process or cost of the licences of four telecom operators which will expire in 2011 and at the same time the process and timing of 3G licensing,” Islam said.

“This needs to be resolved quickly if future investment plans by the telecommunication companies are not to be delayed.”

And, he gets a response, right then and there:

Sunil Kanti Basu, post and telecommunications secretary, said: “As security will remain a top issue while assuring people’s access to mobile phones, the government will obviously keep in mind the need for making it available to a greater segment of the young population.”

Not specifying any timeline for issuing the guidelines for 3G licences, Basu said: “To facilitate the operators, we want to make sure through the regulator that 3G is not issued before the renewal of the operators’ licences.”

Not the optimal answer, which would have been a timetable and specific criteria for license renewal coupled with a 3G auction procedure and schedule, but still, not bad.

More good stuff, including a silly statement about the future of mobile continuing to be voice here.

It is not that the place is completely disconnected from electronic networks. I paid for the hotel using a credit card, which was processed through a fixed line. The signals of one mobile network covered the area, but for me that was little consolation because it happened to be a network other than the one my organization had subscribed to. I had a dongle from the network that did cover the area, but that did little good, because it appeared that the high connectivity rates promised in the ubiquitous ads had little relevance in the backwoods. I was lucky to maintain a connection; luckier still to see download or upload speeds in the double digits (kbps). No HSDPA here for sure!

The lack of connectivity is not limited to the Forest Reserve. The hotel was a good 7-8 km from the entrance to the reserve. Nothing there. Until we crossed a ridge into the next valley more than 30 km away, there was no signal.

10 years ago, this was commonplace. But now? In a country where you can get 3G signals, but not electricity?

My G1 was trying to say something to me. Weirdly, I have recently begun to receive policy advice (or at least indications of policy solutions) from handsets. In this instance, my GI was showing that I was roaming on the network that actually had signal. It was just a weird indication since the two operators did not have domestic roaming agreements and my call would not go through, but it suggests a simple solution to the problem of giving connectivity to the visitors to this beautiful part of Sri Lanka: enter into domestic roaming agreements. Or spend a little more and hang a BTS on the amply proportioned mobile towers that do exist.

And a word to both companies: upgrade to 3G. Eco tourism is the future. Tourists spend 2 weeks looking for an elusive kingfisher here. Is it not reasonable to think they’d like to have Internet access?

WHILE much of the world is still rolling out the third generation (3G) of mobile networks, some countries have already moved on to the fourth (4G). Russia offers an intriguing example. Yota, a start-up with no old voice business to protect, has built a 4G network from scratch, burying 3,000km (1,864 miles) of fibre-optic cables to connect its wireless base stations. The firm is ambitious: it hopes to establish a global brand. That would be a rarity for Russia.

It will indeed to interesting to compare 4G only versus 4G on top of legacy networks.

The latest issue features an e-interview with LIRNEasia’s CEO Rohan Samarajiva, but it is not the only reason why we thought of highlighting the issue. The content is interesting and very readable. We publish two e-interviews from July 2010 issue here fully, as they are not available on public domain.

Apart from Samarajiva, This issue carried e-interviews with Alison Gillwald, Indra de Lanerolle, Christoph Stork and Muriuki Mureithi.

If you are interested in future issues please register at http://lists.apc.org/cgi-bin/mailman/listinfo/chakula

The need for competitive research for policy influence
e-interview with Alison Gillwald

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“High quality, rigorous research…is required to compete and complement with each other for policy influence… In mature economies researchers from multiple universities would be debating and refining the positions governments should be taking on everything from regulating next generation networks to demand stimulation for broadband.”
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Alison Gillwald is Executive Director of RIA. She is also Adjunct Professor at the UCT Graduate School of Business, Management of Infrastructure Reform and Regulation, and a member of CPRafrica’s organisation and selection committee.

CHAKULA: You have just held the CPRafrica conference in Cape Town. What are you hoping to achieve through the conference?

ALISON GILLWALD [AG]: There is almost no scholarly research being undertaken in the field of ICT policy and regulation on the continent. A Google scholar search on the subjects throws up around five scholars on the continent who are published in peer reviewed or accredited journals. It is this kind of high quality, rigorous research that is required to compete and complement with each other for policy influence. In mature economies researchers from multiple universities would be debating and refining the positions governments should be taking on everything from regulating next generation networks to demand stimulation for broadband. Although there are pockets of applied research being undertaken there is no tradition of critical intellectual engagement in this area on the continent. The purpose of CPRafrica is to provide a forum for nurturing and showcasing research in the area of ICT policy and regulation on the continent and enhancing its quality through rigorous academic review and debate. The conference is complemented by a young scholars programme to expose young scholars who may be excluded from such peer-review, paper-acceptance-only style conferences without such a category. Some of these are part of the IDRC- [International Development Research Centre] funded PhD programme to encourage doctoral research in ICT policy and regulation. The idea here is to build a cadre of policy intellectuals on the continent able to critically engage government on the basis of relevant research and contribute meaningfully to research and policy excellence. This will further enhance Africa’s standing in international research and governance fora, in which its participation has historically been suboptimal.

CHAKULA: Reviewing some of the papers presented at the conference, it strikes me that there are a couple of threads that are emerging. Two in particular stand out: the notion of “innovation” in the telecommunications space, and the challenges around convergence and policy when two distinct sectors with different ways of doing things are brought into conflict with each other. I also went back to Research ICT Africa’s 2008 M-banking policy paper, which raises similar themes, and I would like to use that as a starting point. First, on the issue of ‘innovation’. In the M-banking paper, the following assertion is made: “Policy-makers and regulators need to ensure that evolving systems serve the broader objectives of economic growth and development as well as protect consumer interests, while creating an environment that encourages and rewards innovation”. In what ways can policy inhibit or encourage innovation in the telecommunication’s sector?

AG: Indeed, providing certainty to investors and operators while retaining the levels of flexibility to enable innovation in a fast-changing environment is one of the most difficult balancing acts that policy-makers and regulators have to perform. I think the linkages and catalysts between technology, market and regulatory innovation are becoming clearer all the time. New technologies and service offerings have prized open markets and the entry into less policy and regulatory constrained markets has made taking certain technologies to market more viable. This has triggered further possibilities across historically distinct platforms, not only between broadcasting and telecommunications, but between fixed and mobile services and even entirely separate sectors such as telecommunications and banking. The challenges to the expansion of such services are really regulatory now rather than technological – and that is not to say that one does not want or need public interest regulation either in the telecommunications or banking sector, but it has to be done in new, innovative ways that enable to extension of these services to those who currently don’t enjoy them. Once these various forces are unleashed they are able to intersect and create new opportunities and innovative ways of doing things that have not been done before.

CHAKULA: Innovation here seems necessarily to be tied to market gain – the objective is to increase or capture market share. In both your M-banking paper, and the case study of the mobile operator One Network in Kenya, preconditions exists that facilitate innovation. With M-banking there are low-income earners who are ‘unbanked’ and who could benefit from some kind of low-cost transactional instrument, and with One Network, there is a significant level of cross-border traffic that makes a seamless network attractive.
AG: It is true that innovation is often driven by market forces and pursuit of profits, and, traditionally, with new technologies have focused on high-end markets. But much of the ICT innovation we are witnessing in developing markets is focused on what has been referred to as the ‘gold at the bottom of the pyramid’ – very profitable turn-over of high volumes of sometimes minuscule margins on products that, by breaking them up or making them available at cost, the masses at the bottom of the economic and social pyramid can enjoy things like pre-paid phone vouchers, or transferable airtime vouchers. And many of these products have been commercialised innovative practices by the poor in order to access and affordably use communications services – such as missed calls, multiple sim card usage that allows for same net rates, or ‘plastic roaming’.

CHAKULA: If we consider Indra de Lanerolle’s fascinating case study on the South African convergence scenario, we see two sectors (broadcast and telecommunications) in conflict with each other because policy decisions are made according to different frameworks: simply put, economic versus public interest. In fact, Indra does seem to suggest that these are in competition with each other, and resolves this in an interesting way. It feels hard to believe that ‘consumer interest’ is the same as ‘public interest’?

AG: I think with the shift from public utilities to competitive markets many of the public interest objectives of delivery and service are met through serving the consumer interest. Nevertheless there is public interest regulation that is required to improve wider and collective consumer welfare – to provide access to ‘uneconomic areas’ for example – though with new more cost-effective, rapidly deployable wireless services, this concept in markets that enable competitive entry is regularly not proving to be the case. But as long as we have the large number of poor that we do, we will need some level of social regulation – even though a lot of the current pent-up demand could be met with greater market efficiency (more competitive markets offering better prices). And then there are the more traditional content regulation issues either to restrict certain ‘harmful’ content or activities or to enable it, such as local content regulation. That too may be found to be highly profitable, but may need either protection or encouragement.

CHAKULA: Indra’s paper, like your M-banking policy paper, shows that regulating convergence is tricky because of the ‘convergence’ of two or even more sectors; whether broadcast/telecommunications or telecommunications/banking etc. What are some of the key challenges that policy-makers can expect to face in Africa?

AG: The key challenge for African regulators is that they are still trying to deal with legacy regulation around first and second-generation infrastructure and access. At the same time, if they do not want the agenda to be set for them in international fora, they need to deal with next-generation issues, not only of converged IP [internet protocol] networks and services and the next-generation regulation issues of network and service-neutral regimes, but of cross-cutting issues of electronic commerce frameworks, intellectual copyright rights, security and privacy issues, and so on. And you have to do it all or be left behind…

CHAKULA: One frustration is that when one reads a good paper that seems to offer a solution to a problem, one is also met with the feeling that those with decision-making powers are probably not going to read that paper, or seriously consider its arguments. Do you feel the same? If so, how do you think CPRafrica picks up on this challenge? Is it just a case of repeating issues until policy-makers take them on board?

AG: No. CPRafrica is one of several strategic strands towards having evidence-based ICT policy on the continent. This is about organic and indigenous knowledge creation and contribution, at the national level, at the level of regional association and continentally, and also about global engagement and influence. For too long have the solutions come from the developed world. Of course, there are lessons to be learnt and we don’t need to reinvent the wheel, but we also have different challenges and Africa has demonstrated remarkably innovative responses to these when they are informed by sound policy, effective regulation or thorough and appropriate business plans. The indicator research done by RIA and its analysis in order to assess policy and regulatory outcomes is fed into several initiatives, globally and locally. RIA provides the only comprehensive public domain demand-side data on ICT access and usage on the continent. This is used in national, regional and continental meetings on ICTs, and in the database and reports of multilateral agencies such as the OECD and the International Telecommunication Union (ITU), to better inform their understanding of developments in Africa. It is true that sometime decision-makers do not like to hear of the widespread policy and institutional failure on the continent, but many do – especially those that are rapidly improving and beginning to see the rewards of their reforms. This research is also used to develop training curricula that address the needs of policy and regulators in a developing country context. So, for example, as part of the global research and training collaborative LIRNE.net we conduct a professional development course on alternative regulatory strategies at the UCT Graduate School of Business Infrastructure Reform and Regulation Programme to build institutional capacity on the continent. So CPRafrica is just one arm of a multi-pronged strategy of research and education, institutional capacity building and technical assistance and dissemination and advocacy, through our website database, policy papers and workshop and public presentations.

CHAKULA: What is the way forward for the conference? Will there be more?

AG: Yes, in order to build and sustain this much-needed capacity we will have to find a way for CPRafrica to become an annual institution.

Related links:

M-Banking the Unbanked: RIA Policy Paper No. 4:

http://www.researchictafrica.net/new/images/uploads/RIA_Mobile-banking.pdf

CPRafrica conference details: http://www.researchictafrica.net/index.php/news/38-cprafrica-looking-back-at-a-decade-of-communications-reform-looking-forward-to-2020
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Innovation through competition: the budget telecom network model
e-interview with Rohan Samarajiva

Paper link: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1564529

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“The status quo must be unbearable.”
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Rohan Samarajiva is the Chair and CEO of Lirnasia. His paper, “How the developing world may participate in the global Internet Economy: Innovation driven by competition” was presented at a workshop organised by the OECD and InfoDev in Paris, 10-11 September 2009.

CHAKULA: In your paper, you talk about the Budget Telecom Network Model (BTNM), which is brought about by competition allowing operators to reduce the transaction costs of low-end clients. This, as you point out, is different to the standard Average Revenue Per User (ARPU) model. How does it make the ARPU model redundant?

Rohan Samarajiva [RS]: ARPU is a short-hand that outside observers use to see if the firm is doing well, whether its prospects are good, etc. It is, like any indicator, imperfect. You get it by taking total revenue (preferably without extras like roaming) and dividing by number of subscribers. Of course no one really knows what a subscriber is any more, with even poor people holding up to five SIMs, foreigners having SIMs, no agreement on what an active SIM is and so on. You can get better results by looking at revenue per minute. Take total revenue (less roaming and other stuff) and divide by Average Minutes of Usage per User per Month (MOU). This is a better indicator. But investment analysts are still not used to this and it would require disclosing MOUs to calculate.

CHAKULA: Can ARPU be used as a business model?

[RS]: Operators do not actually do much with the ARPU. It is not a business model as such, just an indicator. But getting more from each subscriber (if this is known) is not a bad idea. Just that it does not predict whether the company will make money or not. The best indicator for that is EBITDA [Earnings Before Interest, Taxes, Depreciation and Amortization] margin. Sri Lanka in 2007 had an operator with LKR311 (approximately USD3 at the time) ARPU making close to 50% EBITDA margin. In the end, the success of a business model lies in whether it generates profit.

CHAKULA: What is your understanding of ‘innovation’ in the telecommunications space? You talk of “business innovation”, rather than, say, technological innovation?

[RS]: Tech innovation is important, but it is not the only thing. Pure tech innovation is done by manufacturers of network equipment and handsets. That is good. Business process innovations (e.g. lowering the costs of base stations through software) are done by operators. These include technical aspects, but are not limited to them. Shifting from one business model to another (discovering the latter) is also innovation, but it may or may not not have a tech aspect at all.

CHAKULA: What are the preconditions for innovation, do you think?

[RS]: The status quo must be unbearable. The BTNM innovation occurred when competition got so intense that there was no way to gain market share or even survive without doing something new.

CHAKULA: Does BTNM have implications for increased access to broadband internet for the majority of people on a continent like Africa?

[RS]: Yes. The latter part of the paper is entirely on the extension of BTNM to broadband. Some headlines are that operators must have enough money from voice that can be invested in the 3G plus networks. Once the overlay network is built out the operators have to offer low prices. Prepaid sachet pricing is best, where one buys packages of connectivity in minutes or in capacity. Here, because of lower transaction costs and prices there should be an influx of new customers. This is already on offer in Asia. Africa has to lower prices. Access will be over mobile networks, using dongles or built in modems, for laptops and other devices, including phones. ADSL will be a niche product. Wireless access is the future.

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India’s long-delayed auction of third-generation (3G) mobile phone bandwidth will be held on April 9, the government announced Wednesday.

Applications from bidders for the multi-billion-dollar auction, whose proceeds are earmarked to help plug a gaping fiscal deficit, will be accepted until March 19, a government notice said.

The auction is seen as key to developing India’s mobile market which has been growing by 15 million to 20 million subscribers a month, making it the world’s fastest expanding.

3G, common in developed countries, allows mobile phone users to surf the Internet, engage in video conferencing or download music, video and other content at a much faster rate than the current second-generation or 2G service.

It is also crucial to improving the quality of existing voice and data services in India.

Full story.

1. Mobile Video Conferencing
   I’m still waiting for a little camera to appear on the front of my mobile phone so I can video chat while I’m on the go. Some mobile phone companies, specifically Nokia, have tried this in the past. However, it worked on a very small scale and only allowed Nokia-specific phone chats. For this to work correctly, mobile handset makers will need to allow video chats with computer users and across mobile handsets.
2. Biometric Sensors
   Some of the current biometric sensors used by high-level security companies could easily fit into your mobile phone and add a needed level of security. Adding iris scanning biometrics, for example, could enable higher protection when making purchases on mobile phones and would eliminate the need for current password authentication. It would also deter theft of mobile devices.
3. Common Awareness Between Devices
   Why can’t my phone talk to my computer and share information, including documents I’m reading? Why can’t I start watching a baseball game on my television and then finish it on my phone while I sit on the subway? Some of these features are available with a U.S.B. cable and a lot of dragging, dropping and waiting, but so far, devices can’t talk to one another and seamlessly share content.
4. Green Battery Power
   We’ve come a long way from cellphone battery packs that were as large and heavy as a phone book, but why not add some green to the current batteries? Apple filed a patent two years ago for technology that would integrate a solar cell into the iPhone’s LCD display, allowing the phone to charge when sitting in direct light. This feature would be environmentally friendly, and could avoid cumbersome plugs and a constant need to recharge. (In his article, Mr. Vance noted that NTT DoCoMo showed off a solar-panel phone at the Mobile World Congress.)
5. The End of Wires
   Speaking of self-charging devices, as many of us spend most of our online time in the cloud, why do we still need U.S.B. cables and headphone jacks? I wish that mobile phones could simple share all of our information, including videos, music and documents, wirelessly over Wi-Fi or 3G.
6. Mobile Projectors
   Over the last couple of years, a few phones have entered the marketplace, specifically in China, that include a pico projector. The technology is still in an early stage, but these projectors are extremely small and enable projection of movies, photos and presentations directly from a mobile phone.

Thailand’s telecommunications sector needs greater regulatory fairness as well as clarity in policy from the government on the future of former state enterprises CAT and ToT if Thailand is to secure the huge investment needed for 3G and data services moving into the future. LIRNEasia…conducted a study of the perceptions towards the regulators in eight emerging Asian economies in the second half of 2008 and representatives from the regulator NTC, ToT, the GSM Association and think-tank TDRI were invited to the report’s presentation. The event was co-hosted by LIRNE Asia, and was hosted by Chulalongkorn University’s Dr Pirongrong Ramasoota, an activist who set the tone of the event by noting that today Thailand is in competition with India to be the last of the eight Asian countries to attain 3G.

Read the full article here.

We also spoke about the advantages of using mobile phones to complement the radio productions. 3G was not present in all areas, and in any case, few of the handsets supported audio streaming. That said, the production team said that upwards of 95% of all households owned at least one mobile.