Scratching for growth

CDMA is a relatively new entrant to the regional market and has managed so far to become the de facto standard for wireless local loops (with limited mobility in some cases).

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By  Tawanda Chihota Published  May 5, 2005

|~|khaled-Rifai200.jpg|~|Khaled Rifai, director of business development Lucent Technologies, MEA. |~|The Middle East region has been impervious to the introduction of CDMA as an alternative cellular technology. With efforts intensifying on the African continent to see the technology gain further traction there, CommsMEA talks to Khaled Rifai, director of business development Lucent Technologies, MEA and Hamdi Breik senior manager, Mobility Solutions, about the prospects for CDMA in the Middle East.

CommsMEA: Why are there no commercial cellular CDMA networks in the Middle East, and with the liberalisation that is occurring, do you believe there is scope for regulators to offer technology neutral licences that will permit cellular CDMA networks to come to market in the future?
Khaled Rifai: The reason there are no commercial mobile CDMA networks has to do with the fact that the Middle East region has followed European standards when it comes to telecommunications. Europe has been an advocate of GSM since its inception and GSM has managed to attract an astounding amount of subscribers in a relatively short span of time. CDMA is a relatively new entrant to the regional market and has managed so far to become the de facto standard for wireless local loops (with limited mobility in some cases). Regulators' intervention in specifying the type of licence has varied from country to country. In some cases they have issued technology neutral licences while in other cases they has specified the type of technology to be implemented. There are few instances where the type of technology was left neutral but the frequency bands allocated matched those of GSM.
So far, one of the key impeding points for the introduction of a technology like CDMA has been the lack of roaming and transparency between GSM and CDMA networks. This issue is on the way to being resolved with the introduction of handsets that support multiple technologies as well as gateways that can work across the two different core networks like MAP and IS-41. Furthermore, as more operators embrace the IMS architecture for their network core, and as end user terminals converge more towards IP, the selection criteria for a particular technology at the air interface becomes associated more with terminal price and features, network quality, capacity and coverage, which are areas that (with the exception of terminal pricing) CDMA and CDMA-derived technologies (i.e. CDMA 1x, EV-DO, UMTS/WCDMA) have clear advantages over GSM.
Hamdi Breik: GSM is the dominant mobile technology currently in use in the Middle East. However, there are presently commercial CDMA WLL networks in different countries, including Saudi Arabia, Egypt, Algeria, Kuwait, and Yemen. CDMA technology in the region is in use for WLL, that is to say, to either supplement the existing copper cable networks or in urban areas where no copper network is available.

CMEA: As you listed, there are a number of CDMA WLL networks in the region, but not all that many. Given the spectral efficiency over GSM that is offered by CDMA technology, wouldn't one expect there to be more, and are you aware of any service providers/markets where further deployment of CDMA WLL networks is currently underway?
||**|||~|Hamdi-Breik-200.jpg|~|Hamdi Breik senior manager, Mobility Solutions, Lucent Technologies, MEA.|~|KR: CDMA WLL deployments are on the increase not only in the Middle East region, but also throughout the developing world. The spectral efficiencies of CDMA coupled with its coverage advantages when using lower frequencies (450MHz, 850MHz) allows for the introduction of low cost voice services which is an essential criteria for driving teledensity growth in the developing world. We see more and more interest in CDMA as an alternative technology for fixed line deployment and for achieving universal coverage objectives in a timely manner, both in the Middle East and Africa. CDMA has already proven itself in a big way in some of the up and coming markets including China, India, and Pakistan. This trend will continue to accelerate, pushing the prices of terminals down and making the service more affordable. Additionally, accelerated development of high speed data technologies such as EV-DO are positioning CDMA to offer not only low cost voice but high speed data services that could drive the growth of internet penetration in developing countries.
HB: There are many factors influencing choice of technology including economical, political, market needs, and regional deployment factors. Therefore, maturity or performance of a technology may be overcome by other factors.

CMEA: There are no cellular CDMA450 networks in the Middle East, though a growing number of these networks are being developed in Central and Eastern Europe and Latin America. Why is this the case, considering Middle Eastern operators face the very same challenges as their European and Latin American counterparts in terms of trying to extend network coverage as cost effectively as possible?
KR: The 450 band has traditionally been allocated for other use in this region, including some military applications. Some countries are already freeing up the 450 band in preparation for its use in WLL deployments. Operators that have in the past used the band for NMT (as is the case in Central and Eastern Europe) are evaluating the merit of introducing CDMA450-based services. Please note that the use of CDMA450 can be very appealing for operators trying to achieve wide coverage in not-so-dense areas (suburbs and rural areas)
HB: Deployment of CDMA450 has just begun in the Middle East especially in countries where populations are dispersed over large areas such as in Saudi Arabia. Other countries (such as Algeria and Libya) have aggressive plans to increase teledensity and are considering deployment of CDMA450 for WLL applications.

CMEA: According to CDMA Development Group data, there are CDMA WLL deployments across the Middle East and North Africa and Lucent is not an infrastructure vendor to a single one of those deployments. Why is that, considering the vendor is such a strong player in the CDMA space?
KR: Lucent continues to be the number one CDMA infrastructure vendor in the world. In the area, Lucent has some of the largest deployments both in India and Pakistan. In the past Lucent has largely viewed the MEA region as GSM turf. Now that CDMA has become a de facto WLL technology, we will be intensifying our efforts to continue to grow our market leadership position by expanding into countries that have or will be adopting this technology for teledensity growth.

CMEA: The higher cost of CDMA handsets over GSM devices generally has been cited as a cost that offsets the infrastructure savings made through deploying CDMA. Do you accept this and if so, what steps do you believe can be taken to lower the cost of CDMA devices quicker than they are falling at this present time?
KR: This statement was true in the past. Nowadays however, the cost of CDMA handsets could in some cases rival those of GSM. The cost of the CDMA terminals are and continue to be driven down due to the popularity of the technology in markets like China and India. Such markets are constantly demanding a lower price point for terminals. This price point does in many cases rival the GSM terminal price point in those markets.
HB: In general, the retail prices of CDMA handsets are inline with GSM devices. However, CDMA450 devices are a little higher due to smaller economies of scale. Prices of CDMA450 devices have fallen in the last two years though, and the trend continues as more vendors show increasing interest in manufacturing them.
||**|||~||~||~|CDMA technology in Africa has a greater foothold than in the Middle East, and developments within the mobile communications sector on the continent point to increasing CDMA presence there over time.

In March, CDMA pioneer Qualcomm, in partnership with Ericsson, demonstrated its GSM1x Global Gateway solution in Johannesburg, with the aim of showcasing how CDMA and GSM roaming can provide voice services using dual-mode GSM/CDMA handsets.

MTN, South Africa's second largest mobile operator by way of subscribers, was involved in the trial, as it looks to deploy Qualcomm's hybrid GSM1x solution in Uganda, where it holds a second national operator licence. MTN Uganda is considering the use of GSM1x to expand its fixed-line coverage to sparsely populated areas of the country.

There are only two cellular CDMA operators in Africa, namely Movicel of Angola and Afritel, which operates in the Democratic Republic of Congo. Thus WLL deployments and new licences will fuel much of the potential for CDMA growth in Africa. Under serviced area licences have been issued in South Africa, for example, with the South African telecoms regulator ICASA choosing not to specify a technology that licensees should use to provide voice and data services. This has given rise to an opportunity for the introduction of cdma2000 1x or UMTS-TDD for access to data services.
Botswana Telecommunications Corporation, the country's incumbent telecoms provider is looking to start testing cdma2000, while Mozambican state telco TDM, is already testing the technology in a bid to reduce the time necessary to expand coverage to rural parts of the country.

Nigeria's vibrant WLL market, with no fewer than five fixed-wireless providers, also offers strong potential for further CDMA take-up given developments to unify fixed-wireless and mobile licences under a single regime, as was the case in India. In February, the Nigerian Communications Commission issued a statement that it intended to open up the telecoms market by adopting a unified licensing regime that would allow existing fixed-wireless and mobile licensees to provide both services subject to geographical limitations written into their licences. With more than 500,000 CDMA WLL subscribers, Nigeria already has the second-largest number of CDMA users in Africa, second only to the number in Algeria.
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