Under siege

Palestine’s telecoms operators continue to struggle amid Israeli restrictions and unregulated competition.

Tags: PalestinePaltel (www.paltel.ps)Wataniya Palestine Mobile Telecommunications Company
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Under siege Ammar Aker is keen to develop the broadband sector.
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By  Roger Field Published  November 3, 2010

As minister of telecoms and IT for Palestine, Dr Mashhour Abudaka has his work cut out. While telecoms ministers in most countries have a busy inbox, with new technology and competition throwing up numerous challenges, Abudaka has the added burdens posed by Israel.

Certainly, at face value, Palestine’s telecoms market should be flourishing. With two private telecom operators, numerous ISPs and an extensive fibre optic backbone serving a combined population of about 4 million people across the West Bank and Gaza, the Palestinian telecoms sector is well ahead of some other countries in the region.

Palestine has two mobile operators and one fixed operator. Paltel Group, the incumbent operator, was established in 2005 and runs fixed line services under the Paltel brand and also owns Jawwal, the biggest mobile operator. A second mobile operator, Wataniya Palestine, which is a subsidiary of Qatar’s Qtel Group, launched services in the West Bank earlier this year.

The ministry of communications, which is also acting temporarily as the regulator, is currently in the process of opening up the fixed line sector for competition, using bit stream access. While Palestine already has a number of ISPs, bit stream access will offer a greater degree of competition in the fixed sector.

Restricted access

But despite this level of competition and ministry’s plans to further develop the industry, the problems posed by Israel’s restrictions on the telecoms sector are all-encompassing. Abudaka points to numerous “Israeli obstacles” that have effectively halted development of the sector.

The most pressing issue facing the sector is a lack of mobile spectrum that Jawwal and Wataniya are forced to work with. Palestine’s airspace and frequency allocation is controlled by Israel, which has allowed the two operators only very limited access to 2G spectrum, and no 3G spectrum.

“Wataniya does not have enough frequency. They have 3.8 for 2G, and if they want to increase subscribers they have to increase power and Israel is not allowing this,” Abudaka says.

Even more worrying is Israel’s intention to move Wataniya from its current 900 Megahertz frequency to 1800 megahertz, which is slower and more expensive to use. Jawwal, which has almost 2 million subscribers and runs on 4.8 Megahertz frequency, also needs more spectrum to cater to its existing customer base, but its requests have so far fallen on deaf ears.

“The smallest Israeli operator has around 37 Megahertz power frequencies, while the biggest one on our side has only 4.8 Megahertz, and does not even have 3G,” Abudaka says.

Dr Ammar Aker, CEO, Paltel Group, agrees that limited spectrum is one of the biggest hurdles the operators face. “Limited frequency for both operators is a very big challenge,” he says.

“Any other operator would enjoy having 8,12, or even 17 megahertz for frequency. Plus the lack of 3G is a big challenge, we cannot get it because of restrictions. All of the countries around us now enjoy working with 3G networks.”

Furthermore, based on experience, Aker has little optimism that either operator will gain 3G spectrum or even additional 2G spectrum, anytime soon. Indeed, he points out that it took Paltel and Wataniya a number of years just to gain the limited spectrum they needed to launch operations in the first place.

“We are working on all levels with the PA and the international community to try to put pressure on the Israelis to have 3G on our road map in the next couple of years, but we hope we will get it sometime before then.

“There is no movement on the 2G spectrum. We have passed 2 million subscribers and our competitor has passed a quarter of a million and still the spectrum is restricting our growth.”

Illegal competition

The mobile operators’ problems are exacerbated by presence of Israel’s mobile operators, which manage to cover all of Gaza and the West Bank with 2G and 3G services, despite the fact they are not licenced by the Palestinian Authority to do so.
This puts the Palestinian operators, which are not permitted by Israel to cover all areas of the West Bank, at a particular disadvantage. Indeed, it means that Paltel and Wataniya lose business in many parts of the West Bank and Gaza that are close to the Israeli border and settlements, where subscribers are often forced to switch to a roaming service provided by one of the Israeli operators.

While the Israeli operators’ coverage of Palestinian areas is often referred to as “spillover”, Abudaka prefers to call it “classical colonisation”.

“It is not a spill over. It is a planned telecommunications infrastructure,” he says. “Israel uses the settlements to cover all the West Bank and Gaza with its own networks.”

Indeed, the West Bank is divided into Areas A,B, and C, Abudaka explains. “Our mobile operators are allowed to put cell towers into areas A and B. But the Palestinian operators are not allowed to put towers in Area C, which is the largest area in the West Bank.

“As a result, the Palestinian operators are forced to make agreements with the Israeli operators to cover area C, and if somebody traveling from, say, Ramallah to Nablus, or Ramallah to Jericho, they will have to roam to the Israeli operators.”

However, the Israeli operators do not need roaming agreements with the Palestinian operators because they already cover all of the West Bank and Gaza.

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