Africa and Middle East going off?

The Africa and Middle East (AME) market represents a great opportunity for telecom operators and vendors alike, but huge obstacles will have to be surmounted before the region's potential is fully realized.
That's one of the main findings of a new Africa & Middle East Telecom Insider report from Pyramid Research , "3G & WiMax to Drive Broadband Services Growth Through 2014."

The report's author, Hussam Barhoush, predicts that broadband penetration in the AME market will increase at a compound annual growth rate (CAGR) of 20.4 percent in the period between 2009 and 2014, a figure second only to Latin America on a global comparison.

As the report's title indicates, "traditional" (predominantly ADSL) fixed-line broadband will play second fiddle in this anticipated growth story, mainly due to poor-to-nonexistent wireline coverage in the more rural parts of the region, especially rural Africa. Instead, 3G and WiMax stand to make the biggest gains in the broadband battle.

WiMax, for example, accounted for just 1.9 percent of the region's fixed broadband connections in 2009, but Pyramid predicts this will grow to 8 percent by the end of 2014. Barhoush points out that WiMax networks are already, or close to being, deployed in most countries in the AME region. (See ITU Day 2: WiMax Brings It, Telecom Market Spotlight: Africa, Samsung Wins Saudi WiMax Deal, Moto Does WiMax in Jordan, and Alvarion Wins African Deal.)

Where fixed-line will continue to figure largely will be in the rich Gulf countries, in the shape of FTTH (fiber-to-the-home). Etisalat in the UAE, for example, plans to reach all UAE homes with fiber by the end of 2011. (See Etisalat Does FTTX With Zhone.)

Pyramid predicts that FTTx will account for 9 percent of the AME region's total fixed-line connections by the end of 2014.

But the barriers to ubiquitous broadband are obvious, notes the report. The cost of a PC in Mozambique, for example, equates to 66 percent of the country’s GDP per capita, putting it way out of reach of the vast majority of the population. And in some markets, around 40 percent of the population are illiterate, so worthwhile Internet browsing would not be possible even if the necessary technology were in place.
It's for these reasons that, even after the projected growth in the region in the coming years, broadband penetration levels will still only have reached 6.2 percent in AME by 2014.

Upgrade nationwide optical fibre and microwave links.

Vodafone Hutchison Australia (VHA) has announced plans to deploy thousands of new Ericsson microwave radio and optical fibre links throughout Australia.

The wireless vendor was contracted as turnkey project manager for VHA's nationwide transmission network, assuming responsibility for the design, supply, rollout and integration of new gear.

VHA has been working on the transmission project since Vodafone and Hutchison 3 merged last year, a spokesman said.

The contract came into effect last week, following what VHA described as an "extensive" request for proposals. The new network was expected to be launched within 12 months.

According to a statement from Ericsson, the new network would be scalable, and provide increased capacity to meet the increasing load of smartphone applications.

It is based on Ericsson's MHL 3000 DWDM platform, OMS 1400 series of optical transport products, and MINI-LINK TN microwave solution.

The VHA spokesman declined to specify transmission speeds, stating: "As we rollout the new transmission network, our customers will be able to enjoy faster data speeds and improved call quality."
"This will ultimately make the network more reliable and prepare it for future technologies."
"We're taking the opportunity to migrate our mobile backhaul to an all-IP network," said VHA's CTO, Andy Reeves.

"This allows us to greatly increase our network capacity and end-user speeds at a fraction of the cost of older backhaul technologies."

In May, VHA inked a seven-year managed services contract with Nokia Siemens Networks (NSN) to consolidate Vodafone and Hutchison 3's core networks, removing Ericsson kit in the process.
The NSN deal sparked a review of Ericsson's relationship with Hutchison 3. Ericsson had previously held the managed services contract for Hutchison 3's core network and IT.

Today, VHA told iTnews that it had "a successful working relationship with Ericsson which was formed through work with both Hutchison and Vodafone."

Ericsson's Australia and New Zealand CEO, Sam Saba, said: "We are extremely proud to have been chosen for this major upgrade to the transmission network.

"Ericsson's leadership in optical/DWDM and microwave transmission networks will enable VHA's mobile network backbone to expand capacity and meet the dramatic rise in traffic."

So who pays?

Telecom's partner in building the XT network, Alcatel-Lucent, counter-claimed against Telecom over the XT debacle after Telecom complained about components of the network it had supplied.
The dispute is revealed in Alcatel-Lucent New Zealand's latest financial statement, which gives a brief account of the events in January and February when Telecom's new 3G mobile network suffered a series of damaging, widespread outages.

At the time much speculation focused on whether and how much Telecom would obtain in compensation from Alcatel-Lucent, whose global CEO Ben Verwaayen flew in to New Zealand in May to hold personal talks with Telecom chief Paul Reynolds.

Neither side has commented on who footed the bill for fixing the network, but the report reveals their dispute was settled without an admission of liability.

The size of the deal is not stated in the report but it is clear that it involved a payment, as ''the cost will be split between the Alcatel Lucent group delivering units and Alcatel Lucent New Zealand.''
The effect on the New Zealand unit was ''not expected to be material''.
For the year to December, Alcatel-Lucent NZ reported a sharp decline in revenue and profit after a bumper 2008.

Revenue was $333.9 million, down 21 per cent on the previous year's $423.5 million, split 60/40 between service income and hardware sales.
Profit was more than halved at $12 million, down from $30.5 million.
During the year the company paid a dividend of $16 million to its parent company.
A spokesman for Actatel-Lucent New Zealand said the company was in a quiet period until the release of its group half year results on July 30 and could not comment beyond the information provided in the financial statements.

US to get first wholesale-only 4G provider

Nokia Siemens Networks (NSN) has secured an eight year US$7 billion deal to build, operate and maintain America’s first wholesale-only 4G-LTE (Long Term Evolution) network for newborn telco LightSquared.
The ambitious and privately funded project will see NSN install 40,000 base stations over eight years, which LightSquared has said would cover 92 percent of the country’s 300 million people.
The wholesale-only network is the brainchild of Philip Falcone, founder of New York-based investment firm, Harbinger Capital Partners.

The investment outfit had previously snapped up SkyTerra Communications, which has now been absorbed by LightSquared. The SkyTerra Communications acquisition gave the investment firm 59 MHz of nationwide spectrum, according to the telco.

Heading up the new wholesale only wireless operator will be former Orange Group chief exeuctive, Sanjiv Ahuja who said it will be a “disruptive force” in the US.

“We’re providing everyone, including underserved communities, with a fast, reliable experience regardless of where they are located in the United States. This network will return our country to its rightful position as a leader in wireless broadband technology and solidify its reputation as the center of global innovation,” he said.
Locally, Nokia Siemens Networks undertaken LTE tests with Australia's number two telco, Optus, which earlier this month claimed it achieved download speeds in excess of 50 Mbps.  
The trial network architecture includes NSN's Flexi base stations, network gateway and network server products.

The LightSquared win came just a day after Nokia Siemens Networks snapped up US mobile dinosaur Motorola.

Some analysts yesterday criticised Nokia Siemens Networks' acquisition of Motorola's network arm as a "desperate attempt to gain market share" in the US following its failed attempt to buy Nortel's mobile network business last year.

NBN Service Company Prospects

NBN Co, Australia's government-owned company building the national broadband network, will ask 21 Australian companies including six utility companies, to tender for the progressive roll out of the fibre access network. NBN Co issued a request for capability statement for the design and construction of the network in March, which saw 45 companies start their formal engagement process with the company. NBN Co expects the design and construction request for proposal to be complete towards the end of the year.
The companies invited to take part in the formal request for proposal are:
Baulderstone Pty; Bovis Lend Lease; Communications & Fibre; Connect X (AbiGroup/UGL Joint Venture); Downer EDI; Ergon Energy; ETSA Utilities; Jemena Asset Management; John Holland / Bilfinger Berger Services; Laing O’Rourke; McConnell Dowell; Monadelphous Inabensa Joint Venture; Powercor Network Services; Service Stream; Silcar; SP AusNet; Telstra; Tenix; Transfield Services; Visionstream Australia; and Western Power.