Lack of frequency hits Palestine’s mobile sector

Israelis accused of withholding mobile frequency

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By  George Bevir Published  June 10, 2009

A Palestinian aid donor’s conference taking place in Norway this week could provide the setting for a resolution to the dispute between Palestine and Israel over mobile frequency.

Wataniya Palestine was expected to launch by the end of this month, but its plans have been hit by Israel’s reluctance to hand over the frequency it needs to begin operations.

The nascent operator has now asked the cash-strapped Palestinian National Authority to return the US$140 million it paid the Ministry of Telecom and Information Technology (MTIT) for frequency which it has not received.
Wataniya Palestine has an $85 million loan facility with covenants that dictate when the network needs to launch. It is unknown what dates the covenants stipulate, but Wataniya Palestine CEO Allan Richardson has previously told CommsMEA that he hoped to launch by the end of this month.

It is unlikely that any of the money paid by Wataniya Palestine can be returned; Palestine is heavily dependent on international aid, and earlier this week Palestine’s prime minister Salam Fayyad announced that because of its severe financial crisis the Palestinian Authority has had to borrow $530 million from banks in order to pay civil servants.

In August last year, Middle East envoy Tony Blair brokered a deal between the PNA and Israel’s Ministry of Communications to release the frequency, and now Blair, who is attending the donor’s conference in Norway, is understood to be negotiating on behalf of Wataniya to get the frequency released.

Nati Schubert, a senior deputy director-general at Israel’s ministry for communications, told the Financial Times that Israel will make the promised frequency available as soon as the Palestinian Authority complies with certain steps set out in the May agreement, but he declined to reveal the measures.

Wataniya Palestine, which is backed by Qatari incumbent Qtel, has 170 employees and has already built a significant amount of its network, which Arab Advisors analyst Hadeel Sakkijha said is ready to launch.

At the moment, mobile coverage of Palestine is provided by Jawwal, the mobile arm of recent Zain acquisition Paltel, which has an 80% share of the market with the remaining 20% using Israeli mobile networks.

Jawwal CEO Amar Aker has warned that it is operating with the “minimum” amount of frequency. He told CommsMEA at last week’s Arab Advisors conference in Jordan that the limited frequency is a problem that continues to affect Jawwal.

“Over the past ten years, and since day one, we have asked to increase the amount of frequency we have, and the Israelis never replied,” Aker said.

“We operate on 4.8Mghz. 2.4 is dedicated for us, and we sometimes share it with partners. This is the minimum amount of frequency that an operator can live with. We try to live with what we have, we try to overcome the technical obstacles we have.”

Aker warned that unless more frequency is released or there are technological improvements that allow more capacity to be squeezed out of existing frequency, within two years the network will struggle to cope with the projected extra demand.

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