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Conference highlights rife competition in telecom sector
Published in Daily News Egypt on 29 - 10 - 2009

CAIRO: Telecom moguls from the Middle East and Europe gathered this week at the annual North Africa Com to rub shoulders, share insights and predict future trends. The conference specifically deals with North Africa, a region in which telecom has been one of the strongest sectors.
In Egypt, telecom grew at almost 15 percent last year, driving a significant portion of the 4.7 percent GDP growth observed for fiscal year 2008/2009.
Much of the conference panels are spoken in "telecomese, a language of acronyms for processing speeds, operating systems and service providers. Daily News Egypt spoke with Matthew Reed, senior analyst at UAE-based Informa, for a translation.
"We've seen strong growth in mobile subscriptions in North Africa in the past years. These are going to slow as the market begins to reach saturation. Companies will have to work harder to maintain their current 'subs' [subscribers] in order to prevent them from drifting to competitors, he said.
Tactics include improved customer service, like Etisalat's new customer service video call and applications such as Empeza, a money transfer service.
Egypt particularly is a highly competitive market with three competitors already offering low prices.
"If slowing growth is the challenge facing the sector, growth in 3G [third generation] technologies is the opportunity, Reed said.
3G is the broad term for faster data technologies, mobile broadband, the most advanced for GSM (Global System for Mobile communications) operators, (although GSM is defined as a 2G system).
All three Egyptian mobile networks operate HSPA (High Speed Packet Access), and Etisalat, Vodafone and Mobinil have upgraded to 3G level processing speeds.
"Due to the sheer number of subscribers, Egypt has demonstrated the strongest 3G growth in the region, said Reed.
Morocco has also demonstrated strong growth in 3G. Algeria, on the other hand, has not released the licenses needed for 3G technology, preferring to increase fixed line broadband, such as DSL connections, while waiting for technology to evolve to 4G capabilities and then upgrade.
The rapid growth of 3G use and Egypt's telecom sector in general is due to the liberalization of the sector, which has permitted private companies to evolve almost as fast as the technologies they provide. "Fixed line broadband tends to continue to face more regulatory challenges, he added.
Egypt had contemplated allowing a second fixed-line operator, and then the global economic crisis froze some policy decisions in many sectors needing reform. Currently the plan is to issue individual licenses to property developers to install fiber networks for triple-play services, allowing residents to access services such as fixed voice broadband and IPTV.
Described by Reed as a "jukebox , IPTV allows the viewer to select which channels they want to become available at which time, without initially limiting the customer to a package of satellite channels. However, this form of licensing would preclude residents in already existing locations, and thus Reed describes the decision as "unfortunately limited.
Asked to describe mobile technologies that have him most excited, he named MVNOs (Mobile Virtual Network Operators). The service allows service providers to sell unused network access to companies targeting niche markets, theoretically allowing a highly customized consumer experience.
Sports fanatics could buy applications that provide live feeds of their team's stats to their mobile phones, for example. The point is that the provider would be capable of tailoring its services to the customer. MVNOs have just been introduced to Oman and will possibly expand into Jordan.
Moheb Ramsis, director of business development for Qualcomm in North Africa, presented a PowerPoint on the future of broadband in the region. He explained that 3G technology, while it may still seem new, has reached 720 million subscribers worldwide, by far exceeding the defining 50 million users to constitute "maturity.
"3G technologies will enable 80 percent of global broadband, and 70 percent of handsets [such as mobile phones] by 2013, he said.
Ramsis broke down the telecom sector into networks, mobile devices, and service, citing evolution in all three. "Networks are evolving to the next generation, 3G, and are seeing the coexistence of multiple wireless technologies. Mobile devices are becoming more than tools for interpersonal communication, but are seeing the convergence of computing. Service is moving from wired to wireless systems, and the same rich IP applications are available everywhere.
He laid out a "Technology Roadmap for the expected path of continued revolution. "All of north Africa is upgrading, he said with a smile.
"Right now we see some countries still operating at Release 5 and 6, under HSPA, which translates into a data speed of 5.7 megabytes per second (Mbps). Providers such as Mobinil and Vodafone are moving to Release 6, that is, HSPA+, giving them a speed of 21 to 28 Mbps. Release 8, meaning 42 Mbps, requires two HSPA+ providers, each at 5 megahertz (MHz), and combining them in an aggregated data pipeline, Ramsis explained, accompanied by a PowerPoint diagram showing the merging of data speeds resulting in higher capabilities.
"The good news is, he continued, "this is often a question of a simple software upgrade. LTE, the next phase, would increase capacity above 10 MHz, but it is not yet ready for wide release.
Moore's Law, a rule defined in 1965 to describe the exponential increase in the power of computing systems and breakneck evolution of computer technology, seems to apply equally to telecom. A sector used to high profits and government cooperation, it remains to be seen whether the market will be able to adjust to the inevitable slowdown in demand.
The mood at North Africa Com remains "anything is possible in light of the sectors growth. But once growth starts to fall, this once golden industry will have to evolve just as quickly to preserve its gains, as it has to first acquire them.


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