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MENA telecom growth nearly twice to rest of world Industry plays big role in Kuwait’s economy: Fakhroo

KUWAIT CITY, April 14: Wataniya Telecom hosted the 39th GSM Arab World seminar being held for two days starting Monday. The event was attended by the Undersecretary of the Ministry of Communication, Humaid Al Qattan. Speaking at the event, Eng Abdulaziz Fakhroo, GM and CEO of Wataniya Telecom, said the telecom sector in Kuwait is playing an increasingly important role in the country’s economy by enriching other sectors including health and education. “The three mobile operators in Kuwait, Fakhroo noted, are part of a matrix, and Kuwait is on the GSM system like 220 countries other countries in the world. All the operators in the Arab World belong to the GSM AW.” The GSMA is an association of mobile operators and related companies devoted to supporting the standardizing, deployment and promotion of the GSM mobile telephone system. The GSM Association was formed in 1995. The GSMA organizes the largest annual event in the mobile industry, the GSMA Mobile World Congress, in addition to smaller, targeted events like the GSMA Mobile Asia Expo and the GSMA NFC & Mobile Money Summit.

Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators. Fakhroo added that more than 6 million subscribers are on the same system. “Only the services vary.” The CEO concluded by underlining the importance of the seminar reflected by the presence of the leading mobile operators in the Arab world. “It is in the Arab world that most of the investments in the mobile telecom sector are happening.” This is the second time Kuwait is hosting the GSM AW event. The first one was in 2006. The Director of GSMA’s Public Policy for Middle East Peter Lyons in his introductory remarks said mobile technology has surpassed all the other technologies in the world. Over the last 10 years, the Arab world witnessed an annual growth of 30% in this sector, while the global growth for the same period was at 18%.

“The Arab world is growing nearly twice in comparison to the rest of the world. In 2004, there was hardly any mobile broadband connection, and today there are more than 100 million connections in the MENA.”
Lyons quoted a research finding that said in the next 12 years, the mobile ecosystem in the Arab world would generate $ 200 billion in addition to the GDP, creating 6 million jobs. The GSMA Director stressed the need for investments in the 4G world dominated by fiber and spectrum. “We are asking governments to release additional spectrum broad bands. We need to create the right environment to facilitate long-term investments.” Chairman of Mobily, Saudi Arabia, and GM of International Services and Traffic Management, Ziad Al Hassan, gave an overview of GSMA AW and the outlined the event agenda. Two technologies, he noted, has changed millions of lives in the last two decades, namely Internet and Mobile devices.

“And then they converged into one to create a big revolution.” Further, Al Hassan spoke about the benefits and challenges in these technologies. “GSMA is important in tackling the challenges.” GSMA is a policy advocate, market think tank, business catalyst and an industry forum. More than 800 mobile operators in over 220 countries are under GSMA.  By the year 2017, there will 920 million subscribers globally, with a 66% growth every year for the next 3 years. Until 2012, the growth was slow, but the next 5 years are going to see an explosion in growth. On the growth chart, Middle East is close on the heels of Africa, which will top the list. The growth in the region will be 74%. While managing this kind of growth, spectrum management is going to throw up some serious challenges. “So, a lot of investment is needed to cater to this growth.”

On the subject of economy, Al Hassan noted that the increasing access to mobile broad band has big economic implications for the MENA region, in addition to social development and productivity. Mobile broad band is going to act as an alternative to oil-based economic activities. Senior Director in the Regulatory Affairs Division of Wataniya Telecom, Basel Ramadan, gave a presentation on regulatory landscape, “the hot topic in Kuwait being the establishment of the TRA.” He said Kuwait is a very dynamic market, giving some demographic figures. The country has a population of 3.9 million, with 1.2 million Kuwaitis and 2.7 million foreigners. Kuwait’s GDP stands at $210.4 billion at a per capita GDP of $73,969, “which is the fourth highest in the world.”

Currently, Kuwait does not issue international licenses or fixed licenses. Mobile licenses have been given to 3 players. TRA has been recently established in Kuwait following the approval of the Parliament, and Ministry of Communications will hand over all telecom related affairs to an independent telecom regulator. Top areas of interest for the TRA would be licensing, spectrum management, regulatory economies, interconnection and cost modeling, IGW, infrastructure sharing, fixed network privatization and number range. Spectrum management involves fair distribution of spectrum to the operators and studies on future requirements.

Regulatory economies deal with ensuring fair tariffing. The authority would also have to identify best practices for inter operator tariffing using best cost models. IGW will look into a clear direction for privatization of international gateway for better quality. Peter Lyons, GSMA Director MENA, next tackled the subject of Spectrum for Mobile Broadband and Infrastructure Sharing. GSMA, he said, is promoting investment and economic growth in the Arab world. At a meeting convened in Barcelona two months ago by GSMA, CEO’s of 9 telecom groups worldwide were invited. Lyons noted that the key topic discussed at the meeting was Infrastructure Sharing. “The CEO’s agreed to the concept of sharing infrastructure. Together these 9 groups cover 48 countries and 6 million subscribers.

Lyons explained why infrastructure sharing is important. If each operator were to build his own network and parallel fiber lines, “it would lead to duplication of investment and the industry wouldn’t be able to sustain it. So, sharing is the way ahead.” However, Lyons was quick to add that we don’t want more government-run networks,” rather we are looking at operators voluntarily sharing networks. State intervention should be the last resort. It should be a commercial led initiative over the next decade.” GSMA calls upon operators across the MENA towards infrastructure sharing. Lyons said that operators would need the support from governments for quick ‘Right of Way’ approvals. As spectrum is a scarce national resource, efficient spectrum management is very important. “New spectrum should be licensed, using economically efficient methods that balance the socio-economic benefits.”

In Europe, Africa and Middle East, two new harmonized bands will be set up for LTE, Lyons explained, giving an indication of the way forward. “Digital dividend bands are key enablers for universal Broadband access.” Harmonization, he added, will maximize economies of scale, “and will facilitate roaming, bring down cost, and respond quickly to market needs.” Lyons strongly advocated harmonization for the region, and requested regulators to consider it. Lyons also suggested maximizing the benefit of bands below 1 GHZ to deliver mobile broadband. In it is a possibility to deliver mobile broadband in rural areas. Taking questions from the guests, Lyons said GSMA works first with member operators to develop policy positions on spectrum bands and so on. “We urge our member operators to take the message of the importance of harmonization to the regulators. We need more spectrum in future.”

In the GCC, UAE has identified 700 MHZ and 800 MHZ bandwidth, while Qatar has 800 MHZ. Saudi Arabia and Kuwait has not made much progress in either of the bands. Lyons demonstrated how by not having its spectrum internationally harmonized, Saud Arabia has made roaming difficult. “That’s a big issue, and operators have to engage the highest levels of government to find a solution for it.” The next speaker, Noel Kirkaldy, who is head of Technology at Nokia Solutions and Networks (NSN) discussed Benefits of Regional Spectrum Harmonization. By 2020, he said, mobile networks will see an increase in data by 1000 times to what we have today.  The main challenge in tackling this growth in data comes from the demographics of the Arab world. Kirkaldy said 90% of the connected subscribers are using 2G. 9% are using 3G, and 1 % uses LTE. He was making his case for harmonization. “It’s because of this that we have a $ 20 mobile phone today.”

By Valiya S. Sajjad
Arab Times Staff

By: Valiya S. Sajjad

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