Eyeing Expansion

While TE Data's attempt two years ago to enter Morocco as the country's second national operator failed to bear fruit, the data and IP communications arm of Telecom Egypt recently kicked off its drive for regional expansion with deals in Jordan and Palestine. CommsMEA talks to Mohamed El Nawawy, chairman and MD of TE Data, about future plans.

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By  Richard Agnew Published  December 8, 2003

|~||~||~|CommsMEA: What does the deal with Palestine Telecom (PalTel) involve?
El Nawawy: We've signed a professional services contract to provide our know-how for the rollout of the free internet initiative, which was carried out in Egypt in 2001. This is a regulatory and business framework to allow dial-up access to be provided to customers for the price of a local phone call. The networks carrying this traffic are adjacent to the PSTN and are owned by ISPs who revenue share in the price of the call. We have provided PalTel with a framework in terms of logistics, regulations, licences, [as well as] technical, business, sales and marketing know-how.

CMEA: What's your role in the partnership with Jordan Telecom?
EN: We are establishing a network in Jordan. We are going to co-locate within Jordan Telecom's exchanges and are going build an IP network to offer managed data services and internet access. More importantly, we are going to offer regional managed connectivity services for Jordanian locals wanting to get connected to Egypt and other locations where we are expanding.

CMEA: When are you aiming to launch services in Jordan?
EN: Our plan is Q1, 2004. We are currently setting up offices and network components, so it is going to be very soon.

CMEA: How will you split revenues with Jordan Telecom?
EN: It will differ from service to service. They will take a fee for the use of their exchanges and facilities, and in some other aspects there is revenue sharing.

CMEA: Why did you choose Jordan?
EN: Everybody that wants to 'play regional' has to go to Egypt and Jordan. They have the right framework and laws to allow for private sector participation on a level playing field. There are other great markets out there but they are locked up or the framework is not encouraging. Two years ago, we were very keen on going to Morocco, but we did not find a framework that was clear enough for us to do that. Jordan has the regulatory framework that makes us feel comfortable going there. It is not the largest market in the region but it is comparable in terms of managed data services to Egypt.

CMEA: What vertical markets do you think will provide the main demand in Jordan?
EN: We're trying to be seamless, and come up with a service offering to appeal to anyone. The market is not big enough to get into specialisations at that level. We have a partnership with MCI to provide connectivity where we don't have it, such as Western Europe, the Far East and the US. So we will be aiming at people who want to get connectivity on-net where we have infrastructure and off-net where we have partners.
We are going to capitalise [on the opportunity] by giving our customers more integrated services. The technology for converged voice and data services is there but regulations do not allow them. But we are going to discuss with the regulator in Jordan how we can integrate these services and become the first to offer them to customers. Internet access is also very important and we're going to offer customers a single-stop-shop for internet access and managed data connectivity.

CMEA: Are you looking at other markets in the near future or do you think that regulations are holding you back?
EN: There are other countries in the region that are very exciting, mainly in the Gulf, but again there are regulatory problems. We are more held back by issues of regulations than the capital needed to expand, or the technology.
We were among the five companies that were shortlisted for the second national operator for Morocco. We were going to rollout the new network using IP but there was a concern that Maroc Telecom had a very strong position where it was not clear that how we could compete. New operators cannot go into a country and build a new network from scratch, they have to be able to gain [use of] the facilities of their competitors, especially the incumbent, and as time goes by they can add new components and start expanding. There was not a clear framework for this in Morocco.
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