Huawei Technologies

2005.10

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FROM OPERATORS

FROM OPERATORS

Telecel Globe strides across Sahara

The mobile business is as hot as the sun in Sub-Saharan Africa despite being underdeveloped with a lack of fixed
network infrastructure. According to an ITU report, there were more than 65 million new mobile subscribers
in Africa in 2007 and operators are looking to cash in. Mr. Yasser Abdel Naby from Telecel Globe, met with
COMMUNICATE to share his views on how Telecel Globe sees the Sub-Saharan market and its strategies to
explore the market, capitalize opportunities and meet challenges.

By Joyce Fan

rascom Telecom is among

the largest and most
diversified network operators
in the Middle East, Africa,
Bangladesh and Pakistan. They withdrew
from the Sub-Saharan region from 2003 to
2004, but with rising subscriber numbers,
it is a whole new ball game in 2008.
Orascom set up a new company
called Telecel Globe to capitalize on the
new opportunities in the region. Telecel
Globe is on the lookout for investments
and market penetration in previously
unprofitable or marginally profitable parts
of Africa and Asia where the subscriber
growth rate has taken off over the last
couple of years.
Mr. Yasser Abdel Naby, Networks
and Projects Director at Telecel Globe,
met with Huawei COMMUNICATE
to share his views on how Telecel Globe
sees the Sub-Saharan market and its
strategies to explore the market, capitalize

5 JAN 2009 . ISSUE 46

opportunities and meet challenges. He

believes it is a good time to invest in this
growing market.

Timing is everything
Mr. Naby began by saying, Telecel
Globe mainly focuses on acquiring networks
in emerging markets where we consider
there is great potential growth for telecom.
We are focusing on countries mainly in
Africa and Asia at this moment. You will
find that the majority of the growth in the
mobile industry is mainly coming from
Africa. So it is considered very attractive
for telecom operators. There is more than
one operator now in each market. Having
several operators is increasing the room for
competition, and putting more pressure on
quality, tariff reduction and services, and
therefore, we believe that this is leveraging
the standards of the telecommunication and
IT industries.

Choosing markets
Investors seek markets that have growth
potential, economic and political stability,
liberal regulators, and consistent policy.
Mr. Naby stated the same criteria. When
talking about economic stability, he added
that the revenue being in local currency is
an important factor to be considered.
In Telecel Globes perspective, the
developing countries have considerable
growth potential. Most countries have
great potential, but not all countries
have the great growth potential available
in Africa, especially Sub-Saharan. On
the other hand, it would be a good
opportunity for us if the growth potential
is coupled with political stability.

Optimizing, not cutting

The Sub-Saharan region is known for

The majority of the growth in the

mobile industry is mainly coming
from Africa. So it is considered very
attractive for telecom operators.
Mr. Yasser Abdel Naby, Networks and Projects
Director at Telecel Globe, Orascom

JAN 2009 . ISSUE 46

its poor infrastructure and connections,

while customers desire affordable
communication services. We asked Mr.
Naby what he thought was the key to
success in the low-ARPU market.
Our main challenge in regard to
the competition is to launch a high
quality network with CAPEX and OPEX
optimization. Technology and equipment
can reduce the CAPEX.
For sustainable growth, operators have
to launch an affordable service that is
reliable and not of lower network quality.
Regarding CAPEX and OPEX, it is not
simply about cutting costs and using less
expensive equipment, but the proper
optimization that is crucial. Telecel Globe
strategy includes leveraging the power of
advanced technologies in developing the
telecommunication & IT standards where
it operates together with offering high
quality services at affordable prices.
Using shared platforms to implement
different technologies is one method to
optimize CAPEX.
Mr. Naby said, Looking at Africa we
found that operators have started to focus
on data services, however, to efficiently
use shared platforms, there should be well
defined and comprehensive guidelines
from the regulatory bodies in Africa which
is not yet the case.
Using effective technology suited to the
market is another aspect to consider. Telecel
Globe is quite interested in WiMAX.
We see WiMAX as a very effective
technology for fixed networks. Because it
actually offers VoIP, as well as IP Internet,
which is very relevant in Africa because
there is no widely used DSL in remote

areas. WiMAX is being considered a very

viable technology.
Alternative energy is also a way to
optimize OPEX. According to Mr. Naby,
solar, wind and other alternative energy
sources will alleviate cost problems. Africa
is a hot continent with plenty of sunlight
and solar energy may be the best solution.
We are currently using generators as
the source of power, however we are closely
monitoring the development of the solar
energy. As soon as the solar energy reaches
the mass deployment phase the prices will
go down and it will achieve the desired
OPEX reduction.
When talking about popular practices
in optimizing CAPEX and OPEX, Mr.
Naby feels that no business model is
definitely the best one, and situations
should be judged individually.
Like managed services, it is probably
different in the African market compared
to the European market, as the income
and competence levels as well as growth
potential in Africa are different than in
other areas of the world. Managed services
might not always be the most viable
model, it is situational and varies from one
opportunity to the other.
And looking at RAN sharing, as a
technology, it needs to be very creative and
very powerful in its regulation. Therefore,
I dont think this kind of regulating will be
available for the markets we are exploring. It
is too early because the regulators need to be
developed to have the capability to do this.

Different 3G for a
different life

To bridge the digital divide is most

relevant in Africa. What is Telecel Globes
plan to connect the unconnected and serve
the lower-end of the market?
Actually, we are already working on
this by exploiting the market potential in
the African market. We are leveraging on
the telecommunication capabilities. We
also have very good development in IT
infrastructure. We have different service
portfolios depending on the users. For
example, we have WiMAX data services
for the fixed users, we have a full portfolio
of mobile services including 2G, 2.5G
and we will go 3G depending on the
market requirements. We are offering a big
spectrum of services, Mr. Naby said.
Some observers argue that it is too
early to implement 3G service in the SubSaharan region considering the income
level is relatively low and there is not a
strong demand for data services.
To Yasser, the 3G is becoming different.
I agree with the statement about the
average income which directly drives the
ARPU in Africa, and the penetration
rate for the data services, are all factors
indicating that this is not the right timing
to go for 3G. But on the other hand, the
3G implementation is different now from
what it was before. Now, many vendors
have equipment which supports both 2G
and 3G. So, you will find the CAPEX
for 3G is highly optimized. Now it is
possible to offer 3G services with 2G and
2.5G capacity. This makes a new positive
dimension in the business case of 3G.
Editor: Gao Xianrui sally@huawei.com

The 3G implementation now is different from

what it was before. You will find the CAPEX for 3G is
highly optimized. Now it is possible to offer 3G services
with 2G and 2.5G capacity. This makes a new positive
dimension in the business case of 3G.
7 JAN 2009 . ISSUE 46