Learn and expand

ISP wi-tribe is taking a measured, customer-centric approach in a bid to make a sound business case from WiMAX

Tags: JordanPakistanPhilippinesWiMAX
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Learn and expand Riaz says that one of the main challenges around WiMAX has been the hype that the technology generated.
By  Roger Field Published  May 12, 2010

As a technology, WiMAX has had its share of hype and derision during the past few years.

But while some analysts, as well as exponents of LTE, may have eroded confidence in the long term viability of the technology, a number of companies have been busy deploying networks, offering people in diverse markets a taste of reliable, high speed wireless broadband via WiMAX technology.

For Tauseef Riaz, group vice president for planning and strategy at wi-tribe, a broadband company backed by Qatari incumbent Qtel, and KSA-based A.A. Turki Group of Companies (ATCO), the case for WiMAX as a means of delivering reliable broadband is clear.

Having been with wi-tribe since its conception in 2007, Riaz was actively involved in the decision to use WiMAX and its subsequent roll out in Jordan in 2008, Pakistan in 2009, and the Philippines at the start of 2010.

"When wi-tribe was created back in 2007, it was given a very specific mandate by Qtel to become its dedicated platform to develop consumer broadband businesses in emerging markets. It was not about DLS or fibre or WiMAX," Riaz says. "There are all these mobile customers out there, but very few broadband customers. Qtel was looking for a vehicle to go after the consumer broadband market in emerging markets such as the Middle East, North Africa and Asia.

"We went through the process of assessing what was the best technology for us to deploy in emerging markets and there was not much copper out there for DSL, fibre would be expensive, but wireless made sense and we looked at what was mature and economical and WiMAX made sense, so we went with WiMAX."

Since its creation back in 2007, wi-tribe has launched operations in Jordan, Pakistan and the Philippines and now has a combined subscriber base of more than 83,000 according to Riaz.

Riaz admits that the company initially looked into acquiring licences in Saudi Arabia and Bahrain before winning its first licence in Jordan, followed by the acquisition of a company in Pakistan. The experiences taught the management team that the Gulf markets tended to be overpriced, leading to a greater focus on emerging markets in Asia.

Low hanging fruit

Riaz says that wi-tribe's strategy in each of its markets so far has been to go after the "low hanging fruit" which means deploying the network in a phased approach, starting with the areas that have the greatest numbers of potential customers.

"Typically we start our roll outs in urban areas where people have a bit more money, are educated, know what the internet is and have PCs at home. That is where we build our customer base. Then we go after the next level which is the lower middle class, other cities and tier-2 cities."

Despite growing rapidly in its three markets, Riaz concedes that there is plenty of competition. "Since we have come in and WiMAX has taken off we see a lot of competition in our markets in Jordan, Pakistan and the Philippines."

Tapping demand

In terms of growth, the directors of wi-tribe hope to tap into a pent-up demand for data in the same way that mobile operators addressed demand for voice. Emerging markets, he points out, differ significantly from developed markets.

"There is a divide between emerging markets and the developed markets," Riaz says. "You see a lot of internet penetration in Europe and the USA. You don't see it here, but you do see higher mobile penetration rates in emerging markets than in the USA and Europe."

The reason for this, Riaz says, is that as mobile phones became available and services became affordable and reliable, it created a growing need for mobile phones, and so services became ubiquitous. He adds that wi-tribe is trying to do the same thing with consumer broadband, although he admits broadband is not at the same level as mobile owing to barriers including education, PC penetration, and the higher cost of broadband.

But these barriers are less of an issue in the urban areas that wi-tribe starts its deployments in. In Jordan, the company now covers seven cities, although the primary focus is on the capital city of Amman. In Pakistan, wi-tribe is present in four cities, while deployment in the Philippines is in its first phase.

Riaz says that it is important to stage the roll out in a measured way, ensuring that the network is of high quality, rather than trying to gain maximum geographic coverage quickly at the expense of quality.

"We are not in the business of launching a half-baked network and going out and trying to acquire hundreds of thousands of customers and make big bold statements. This is a proven, standardised technology and works very well. But it is a new technology so we are rolling it out very slowly," he says.

He adds that the company's goal is to cover about 20% of the population of Pakistan in the next few years. Meanwhile, in the Philippines, wi-tribe is present in Manila and plans to expand to around 20%-25% of the population in the next few years. "We intend to learn from our customers as we expand," Riaz adds. "There is a strong pent-up demand in our markets for broadband.

"We are in four cities in Pakistan and we are going to expand in the same cities this year and also in other cities. We are taking a similar approach in the Philippines.

"It is a two-step process. The important thing for us as an operator is to get the access right, and that the network is where we want to be and it is working very well. The second step is to start looking at value added services, with Riaz explaining that the company wants to take its service "beyond just a dumb pipe for connecting to the internet".

As an example, Riaz says that wi-tribe is testing anti-virus services in Jordan, and is also looking at VoIP services. "We see a huge potential in partnering with companies such as Skype, especially as the fixed line penetration in the Philippines and Pakistan is very low. Beyond that there will be a combination of gaming, social networking, safe computing and things like that," he adds.

WiMAX alliances

With wi-tribe keeping a close eye on new markets to enter, Riaz confirms that the company eventually intends to support roaming across its network, as well as with other WiMAX operators. "There is not a lot of traffic between these countries but we are very interested in building relationships with the other WiMAX and broadband wireless operators around the world," he says.

wi-tribe is also in a strong position to forge alliances with other operators because of its relationship with Qtel and a "strategic alliance" with US WiMAX player Clearwire, which is itself working to broker global alliances, including for roaming. The WiMAX forum, an industry-led organisation formed to certify and promote the compatibility of WiMAX products, is also looking at promoting alliances between WiMAX operators including roaming.

With roaming probably at least two years away, wi-tribe is focusing on offering its customers the level of service that it promises. And the focus is mainly on "simplicity and convenience".

In line with this, the company offers a range of internet packages tailored for each market. For example, in Pakistan wi-tribe offers speeds of 256kbps, 512kpbs and 1Mbps, with the latter proving most popular. In Jordan, it offers speeds of 256Kbps, 512Kbps, 1.5Mbps and 3Mbps, and in the Philippines it offers 1Mbps and 2Mbps speeds. The packages have consumption limits of 5Gb to 15Gb with charges for consumption.

In Pakistan and Philippines wi-tribe uses WiMAX-e, which can allow mobility, while in Jordan it has deployed WiMAX-d, which is static. wi-tribe's licence in Pakistan is nomadic, although regulatory constraints prevent the company from offering mobility. In the Philippine's however the company has a licence that allows mobility, and will introduce mobility.

"Our focus is on fixed access. There are people at home who don't have reliable service. The next stage is to introduce mobility and we are going to do it in steps."
He adds that the most immediate priority is to introduce dongles into the market, which will allow people to use their existing laptops or netbooks to roam around, and then the third step after that is to start introducing handsets and devices with built-in WiMAX into the market. "Intel is taking a lead and is committed to integrating WiMAX into laptops," Riaz says.

The move towards mobility has also been aided by falling prices for WiMAX devices, according to Riaz. "The most surprising thing at the moment is that despite the numbers across the globe not being as big for WiMAX as for 3G, the prices for the customer products, whether they are dongles or handsets, have come down very quickly.We are looking at dongle prices around $50, compared to about $150 a year ago."

Gaining ground

The competition that wi-tribe faces varies in each of its different markets. In Jordan and the Philippines, the company competes with DSL, 3G, and WiMAX players, while in Pakistan it also has DSL, 2.5G and WiMAX competitors.

Riaz is keen to stress that the company does not claim to offer "more or less" than the competition. "What we are more focused on is the customer experience," he says. "What you also have to remember is that in the emerging markets they are not like the US or Canada.

"The most popular speeds are half meg and 1 meg, so even when you offer a 1.5 meg service, people tend to the lower speeds, where they see the most value."

However, demand is likely to increase in the future, and Riaz confirms that wi-tribe will be able to cater for it. While wi-tribe may not be able to match the speed of some of its DLS rivals at present, the company is able to differentiate itself on service and through perks that the technology offers, including nomadicity.

"Remember, it takes two days if not weeks to provision a DSL connection, or you can come with us, walk in the shop where we will check the coverage area, pick up a box, go home and switch it on.

"What we focus on is customer care, convenience, portability and simplicity and we see that gives us an edge over our competitors, if you look at the feedback we are getting from our customers."

One of the criticisms that WiMAX attracts is the strength of the signal, which often means that users must sit close to a wall or window to connect to the network. But Riaz insists that this has not been an impediment to growth for wi-tribe, with the company making it a priority build networks with good coverage and to educate customers about what they should expect and how to get the most from the network.

The availability of customer devices that can be placed by the wall and then give WiFi coverage throughout the users house can also overcome signal problems. "The problem is with hype," Riaz says. "A lot of hype was built about WiMAX technology in the past years by the vendors and some of our competitors.

"With wireless, whether it is 3G or WiMAX, you cannot run it with a deep signal because it is very expensive. But a well designed network can deliver good broadband speeds at a reasonable depth inside customer households.

"WiMAX does not have the same constraints as DSL as it is portable and can be provisioned quickly," Riaz adds. "You need to educate the customer and make sure they understand how to get the best experience out of our network."

Riaz on WiMAX

Tauseef Riaz is keen to see perceptions of WiMAX change, and particularly to see an end to the seemingly endless "WiMAX vs LTE" debates.

"There is no WiMAX versus LTE versus 3G debate," he says. "We are in the business of broadband wireless. Many technologies are working today. Some of them service certain segments well, others don't - it is a commercial debate. "What is important for us is to build economical and reliable networks, so it's good to go with proven technologies via commercial standards, but we should move away from the technology debate.

"When people come to us and say ‘you are a WiMAX operator' it is not true. We are a broadband operator that has chosen wireless because it makes sense in Pakistan, Philippines, Bangladesh. We have gone with WiMAX because it is here today, it is proven and it is very economical, that is the most important thing."

wi-tribe is also proving the point by actively looking at LTE as a potential means of delivering broadband in the future. "We see a lot of overlap with LTE and we are testing LTE in the Philippines, so it is not like we are anti-LTE, and when it becomes available and there is an opportunity, and business case makes sense we will look at deploying it."

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