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.

Sustainability is not an issue for this telecenter. It provides all its service, be it Internet surfing, computer training, library facilities or even typesetting and printing services free of charge, treating them as community services.

Thondaman Foundation, a non-profit organization, with a ministerial backing, that intends “to make available to the plantation community the wide advantages of the internet and intranet communication technologies” has set up this centre in the middle of the picturesque Glenore estate at Haputale, to serve a population of 5,000 from the surrounding villages. This is one of the 45 such centres in different estates in the Central, Uva and Sabaragamuva provinces.

The white dish, gives a sense of remoteness, but it need not be. As the crow flies, this place is close to both Bandarewela and Haputale – so close that 3G HSPA signals from both key providers are available. According to our tests, quality is medium to good for both. Had I not been late for my next visit, I could have done this blog post from there itself.

In other words, Minister Thondaman, you might be paying few times more for a dedicated radio link when you can have 3G HSPA broadband facilities from the same provider for not more than Rs. 3,000 (USD 26) per month.

Multiple dishes is a common sight at many Nenasalas – the ‘telecentres’ set up under the e-Sri Lanka program, funded by the World Bank. Some of them are huge – with diameters little less than 2m. Having not done a design recently, I cannot tell the prices offhand, but I do know they are expensive – one such dish (with equipment) costs few times more than the aggregate cost of the PCs and peripherals in the centre.

Why a telecenter is equipped with multiple dishes?

The reason is, sadly, poor planning. ICTA, the implementation agency changes the communication services provider frequently. Few years have elapsed since the services from the initial provider have been discontinued, but he has never bothered to remove the dishes. Why? Your guess is as good as mine. The capital expenditure has been fully included within the Rs. 90 million (US$ 900,000) amount charged to provide VSAT services to then 200 odd Nenasalas for a period of one year.

The sadder part is even with such a substantial expense these centres are not provided broadband. What they receive is 128 kbps – something not too different from dial-up.

That is when some of these centers are already within the 3G coverage areas. Out of the three above two centers receive 3G signals. Not too great, but adequate for a telecenter and certainly better than a 128 kbps link.

We will be glad to learn what Udaya Gammanpila, ex-Chairman Central Environmental Authority, (who was once worried about used mobile phones creating an e-waste issue) thinks about the environmental damage created by these non-functional dishes, even if we ignore the huge sunk cost.

A little bit of authoritarianism from a government can sometimes be a good thing – especially if it means getting your country’s telecoms industry in working order.

That sentiment goes against the grain, but when you contrast the telecoms regulations in the region’s megamarkets of China and India, you can hardly help but conclude that the iron fist is preferable to the velvet glove when it comes to delivering clear-cut regulatory outcomes.

India is praised for being the world’s largest democracy, but there is little doubt that its admirable ethos of allowing every man to have a say on every issue – including critical regulatory ones – is holding back its telecoms market in many respects.

If there is one industry that needs a fast-moving regulatory process in which decisions are handed down smoothly and with minimum delay, it is the telecoms industry.

Few industries can compare to the telecoms industry, where technologies are constantly evolving and competition in a country can be seriously compromised if a regulator does not ensure a timely and orderly deployment of new services, such as 3G or high-speed broadband.

Read the full article by Tony Brown in telecoms.com here.

The Ministry of Industry and Information Technology (MIIT) said China’s biggest mobile operator, China Mobile, was awarded a license for TD-SCDMA, the domestically-developed 3G standard.

The other two main carriers, China Telecom and China Unicom, received licenses for the US-developed CDMA2000 and Europe’s WCDMA, respectively.

The 3G high-speed networks can handle faster data downloads, allowing handset users to make video calls and watch TV programs.

Read the full story in China Daily here.

Analysts and industry players, however, expect the process not just to be further delayed, but also to attract fewer participants for the bidding process.

Their apprehension follows recent media reports, citing government documents, that the finance ministry has sought to double the auction price for pan-India 3G radio bandwidth, or spectrum, to INR40.40 billion.

“There is no (further) delay. The auction is on schedule,” said Akshay Rout, a spokesman for India’s ministry of communication, told Dow Jones Newswires.

The Indian government had already delayed the auction to Jan. 30 from Jan. 16.

Read the full story in CNNMoney here.

Telecom is being seen as a significant contributor to the country’s foreign direct investment (FDI). The launch of 3G will give a big boost to services. The ministry has allowed foreign players to bid for 3G licences, that will in turn ensure increased attention from foreign investors. The industry attracted about $2bn as FDI during April to September this year, which is a significant jump from $1.2bn during the last calendar year.

India currently has a subscriber base of 373 million. The figures are expected to go upto 500 million by 2010 and 750 million by 2012. Financial projections also indicate that the revenue generated from this sector will grow from the current $20bn to $35bn in 2010.

Read the full story in The Economic Times here.

Under the terms of the deal reached in January, Orascom Telecom will invest $400 million in network infrastructure and license fees over the first three years to develop the network. Orascom said it was the first foreign telecommunications company to be awarded a North Korean commercial telecommunications license.

It was not clear what restrictions, if any, would be imposed on the network, which provides data capabilities as well as phone services. Ordinary North Koreans are forbidden from having cellular phones, and the government maintains strict controls over Internet access.

Orascom has said it intends to cover the North Korean capital, Pyongyang, and most of the major cities during the first year of service. North Korea, one of the world’s poorest countries, is pushing hard to give its capital city a facelift — a makeover coinciding with the 60th anniversary of the communist nation founded in September 1948.

Orascom Telecom spokeswoman Rasha Mohamed confirmed in an e-mail on Sunday that the service will be launched on Monday. Additional details were not immediately available.

Read the full story in Associated Press here.

China has the world’s biggest population of mobile phone users and adoption of 3G — which has been long delayed — was eagerly anticipated by equipment suppliers, which are seeing demand elsewhere decline due to the global financial crisis.

“The 3G licenses will be issued either later this year or early next year,” Li Yizhong, whose ministry regulates telecoms, said at a news conference.

Third-generation mobile phone technology supports Web surfing, video downloads and other added services. Its adoption in China is expected to boost demand for mobile service and spur growth of new services.

China’s mobile phone market has grown to 650 million accounts, Li said.

Foreign suppliers such as Nokia Siemens Networks and Sony-Ericsson will be competing with fast-growing Chinese rivals Huawei Technologies Co. and ZTE Corp. to sell switching gear, base stations and other technology.

Read the fullsroty in Associated Press here.

Licensing the 2100 MHz spectrum band for 3G services would enable Bangladeshi operators to launch mobile broadband services, which their customers can use to gain fast and easy access to the Internet and online services, it said on Wednesday.

Bangladesh’s mobile sector has grown rapidly, with user numbers reaching more than 45 million at end-September from 200,000 in 2001, while the country has only 1.32 million fixed-line phones.

“Laying new fixed-line connections is expensive and inefficient, so high-speed mobile networks are Bangladesh’s best bet to realise the many social and economic benefits that arise from widespread access to broadband services,” said Ricardo Tavares, senior vice president for public policy at the GSMA.

Analysts predict the number of subscribers could top 70 million by 2011, nearly half the country’s population of more than 140 million people.

Many developing countries, including Malaysia, Sri Lanka, Kenya and South Africa, have already deployed mobile broadband services enabling their people to get easy access to information on health, education, job opportunities and agriculture.

There are six cellphone carriers in Bangladesh, including five foreign operators.

Read the full story in Reuters here.