Laying the Groundwork

Senior management at Etisalat believe the company has been operating as if it were already facing competition, though its recent spate of network improvements would suggest Etisalat does acknowledge the game is about to change drastically.

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By  Tawanda Chihota Published  November 4, 2005

|~|Khalifa-Al-Forah200.jpg|~|Khalifah Al Forah sees potential for mobile TV delivered over Etisalat's 3G network. |~|A second all-service operator is expected to launch commercially in the UAE in the first half of 2006, breaking the monopoly status enjoyed by incumbent operator Etisalat for all of its 30-year history. For its part, Etisalat claims it is conducting business as usual and welcomes the prospect of competition, though some analysts believe the operator has identified some fundamental weaknesses in its network and business outlook, which the it is now hard at work rectifying. “Etisalat's in-building mobile coverage is very poor across the country,” says Taha Rangwala, senior analyst at Pyramid Research. “This problem has been magnified over the last couple of years due to real estate development.” The rapid development of the property sector in the UAE, in particular Dubai, has resulted in challenges for Etisalat to maintain the quality of service to new buildings and district in the major cities. “Outdoor coverage has been great, especially in the commercial business districts and the old souk areas of Dubai, but when you start talking about the newly developed areas of the city, and this is true for Abu Dhabi as well, coverage is poor within the buildings,” Rangwala explains. “When you're talking about 30-40 floor skyscrapers, this is going to be an issue.” Another problem being faced by Etisalat's mobile network is its tendency to become easily congested when there is a high concentration of callers at a single location, for example at public functions and gatherings. “If you go to a popular mosque on a Friday, where there are five to 10 thousand people, right after prayers end you won't be able to make a call,” says Rangwala. Such problems were also encountered at the Gitex event held in Dubai at the end of September, where making and maintaining a call was challengin g at best. Operators in other parts of the world faced with similar occasional congestion issues use mobile cell sites loaded in trucks, for example, that they are able to deploy at a hotspot of activity. Such a technique could be a short-term solution to Etisalat's shortcomings at public events. “This has been a problem that is acutely visible for Etisalat in the UAE,” says Rangwala. “The operator's priorities are starting to become better aligned with what the customer wants in light of the entry of competition next year. But far and away, Etisalat is not there yet.” Efforts to better segment the mobile market have also been suggested as an area in which Etisalat could improve its service. The operator has been accused of viewing the UAE's 4 million mobile subscribers very much as a homogenous group, with little effort made in segmenting the market into user profiles. The launch of Etisalat's NAJM post-paid plan in April is considered to have been amongst the first clear indications of the operator's move towards better communicating with and understanding the end-user, says Pyramid's Rangwala. ||**|||~|Omran200.4.jpg|~|Mohammed Omran: Etisalat's CEO is upbeat that the entrance of competition will make his company work harder. |~|“Etisalat has a lot of potential,” states Ahmad Abdulkarim Julfar, general manager of Etisalat Dubai. “All we require is the icing on the cake. We are interacting more with customers and improving the chemistry of our business.” Providing its customers with a more human face, Etisalat is looking to start rolling out its own retail stores across the country. “I spoke to a senior Etisalat official who said that by the end of this year, or the first quarter of next, (Etisalat) should have a couple of retail stores, maybe even more,” claims Rangwala. The success of Etisalat's Saudi operation Mobily has been aided to a large degree by a sizeable number of branded shops, giving the operator a vast number of points of presence across the country. Since launching on May 25, Mobily has signed up 1.5 million subscribers. Thus despite Etisalat's claims that the entrance of competition has not altered its course too drastically, on the ground, it appears that the operator is clearly preparing for the competitive storm the new entrant is set to bring. “Are (Etisalat) there yet, in terms of their priorities and customer focused services and coverage? No. Have they decided to move in that direction? Definitely,” Rangwala concludes. In September Etisalat announced that prepaid subscribers would be able to retain their numbers and SIM cards while moving to contract subscriptions, a classic defensive move to tie subscribers into a year-long contract, thereby reducing the pool of subscribers the new entrant can target. “We have been working as if we had a competitor for years,” says Etisalat CEO Mohammad Omran, pointing to the fact that back in 1976 Etisalat was the first operator in the world to receive private sector funding. “Since then we have worked on a commercial basis,” he says. A major project that has been undertaken by Etisalat on a “commercial” basis is the development of a next generation network (NGN), which seeks to incorporate IP at the core of the network and create the foundation for the introduction of a number of voice, data and video services. “We realised that the PSTN was not growing, it is designed mainly just for voice,” says Etisalat's newly appointed chief engineer of NGN planning, Mohammed Yousif Al Ramsi. Following a tender in late 2003, out of 10 bidders, Huawei and Alcatel were selected for initial trials. The trial deployment involves a softswitch — the control element — and the media gateway, which can interface NGN subscribers to original TDM subscribers. Currently it is only Huawei's equipment that is carrying live traffic. “We are still trialling Alcatel,” says Al Ramsi. “We went for Huawei, because they could deliver immediately.” Huawei equipment, which has been utilised in Abu Dhabi, will also be used in Dubai in areas of high demand, Al Ramsi confirms. Once trials are successfully completed, Alcatel equipment will be deployed in Sharjah. Etisalat opted for a dual-vendor strategy, utilising both Huawei and Alcatel to provide essentially the same equipment. Juniper routers are also being utilised, forming the transport layer of the NGN project. ||**|||~|Ahmad-Abdulkarim-Julfar200.jpg|~|Ahmad Abdulkarim Julfar is general manager of Etisalat Dubai as well as general manager of eCompany. |~|Etisalat CEO Omran has described the operator's NGN developments as the “revival of the fixed line,” and expects to see more and more applications introduced that may not necessarily be traditional fixed-line offerings. For example, Etisalat's fixed-line users will soon be able to send and receive SMS. Using an SMS-enabled phone, users will be able to send messages between similar devices, mobiles, fax machines and email addresses. Users will also be able to sign up to breaking SMS news alerts, or other high value content. One of the main advantages Etisalat sees of running an NGN, besides reduced operating costs, are the extra services that can be offered over the network, such as TV. Full triple play services are still in the lab testing phase. “By the end of this year or the first quarter of 2006, we should see a commercial trial of triple play services,” says Al Ramsi. Etisalat is also looking at delivering TV content to mobile devices. “3G today can meet the requirement for mobile TV,” says Khalifa Hassan Al Forah, Etisalat's mobile system engineering manager. The service is set to be launched by the end of this year and Al Forah confirms that the operator is currently working on agreements with broadcasters. The standardisation of the technology to bring TV to mobile handset screens - Digital Video Broadcast - Handheld (DVB-H) is still an ongoing process, and Al Forah believes DVB-H is still some years off from being adopted by Etisalat and other operators. In the meantime, he believes that UMTS will be an ample transport layer for mobile TV, and in the future DVB-H will be utilised alongside 3G networks. “I see co-existence between DVB-H and 3G, with DVB-H used by the handset to receive the channels, and 3G used to provide extra information, such as player statistics while watching a football match,” Al Forah explains. Etisalat is also moving to offer mobile payment services, and starting in January the operator will be giving subscribers the opportunity to effect payments for services using their handset. “This will enhance the convenience for the customer and will also increase the speed in the purchase cycle time for the merchant,” claims Amir Rashid, Etisalat's business development manager for eBusiness. Payments made for taxi rides, cinema tickets, and other such micro-transactions are set to be the mainstay of the m-payment service. M-Payment users will be navigated onto a payment portal, enter the amount and select the designated recipient, who will be automatically informed. “The menus will be customisable,” says Rashid, adding that the feel of the service has yet to be completely decided. Etisalat has also become one of the first operators in the region to commercially launch push to-talk over cellular (PoC) services, utilising a solution provided by Nokia. Covering the entire UAE network, Etisalat expects PoC to be used at first in the country's heavy industries, as firms in these sectors often have the need for regular communication. “Logistics, transportation and construction companies will particularly benefit from this [service] as they need to communicate between teams,” says Nasser Bin Obood, Etisalat's deputy chief executive officer. While 3G services are yet to be fully commercialised, Etisalat has introduced a 3G data card that can be inserted into laptops and offer users remote access to the internet at speeds in excess of 128Kbps. The data card, manufactured by Huawei, connects through the 3G network where available, and through GPRS in areas where there is no 3G coverage to speak of. Beyond the offer of access to data, Etisalat's 3G data card also allows users to make and receive voice calls and SMS, and synchronise phone books, schedules and applications between their SIM and laptop. As such, the operator's 3G data card pack comes with earphones for voice conversations through the PC. ||**|||~|Picture-4200.jpg|~|Etisalat is keen to export the lessons it has learnt domestically to foreign markets in which it invests.|~|Over in the internet world, Etisalat's e-business unit, eCompany, has undertaken to simultaneously increase its ADSL bandwidth offerings while reducing prices. Coinciding with the operator's tenth anniversary of the offer of internet access, monthly consumer broadband fees were chopped by up to 46%. eCompany also reduced the monthly fee for a 256Kbps internet connection to AED 149 (US$41), its 1MB price to AED 249 and 2MB to AED 349. Just a week before the price cuts, eCompany automatically upgraded the connections of its Al Shamil ADSL customers to the next highest level at no additional cost and without any change in monthly fee. Omran is forecasting an installed broadband subscriber base of 100,000 by the end of the year, predicting that by 2008 the operator's aim is for the UAE to be among the top countries in the world in broadband penetration. eCompany has also announced an increase in storage allowance for web hosting at no additional charge, applicable for both new and existing customers. The lowest package, AED 25 a month Myweb, has seen its storage increase from 10MB to 40MB, while the top, Ultra package, has been raised from 2000MB to 4000MB. Given Etisalat's high profile presence at the Gitex event, some analysts have suggested that the operator was determined to use the event to show just how technically savvy it was ahead of next year's event, when it will likely be sharing the limelight with the second operator. “It is not surprising that this (product announcements) would happen at the time of year when everyone in the region is looking towards the UAE as the launch pad for new technologies,” says Mark Rotter telecoms analyst with research firm IDC. “For some time, the country has aimed to be “the first”, “the best”, “the largest”, so as one of the key companies in the UAE, it is not surprising that Etisalat is keen to be a technology innovator or early adopter.” It appears certain Etisalat will look to maintain its technology leadership. ||**||

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