Internet-based LL Services

Fellow blogger and friend Babar Bhatti has complained about the problems he is facing in using Braintel’s local loop services (probably from out there in US). A reader has commented on this citing a PTA ban on such operations by the local loop operators in Pakistan.

The main issue here is the ability of the LL operator to replace the traditional copper for its end user or the expensive 1900 Mhz WLL frequencies for its end user with the ‘Internet cloud’. It is technically possible but the use of Internet for voice problem had its own fair share of cloudiness. At the center of this debate is the use of the word ‘long distance’ – whether it is to be taken physically or network-wise.

When last LDI/LL licenses were issued, the LL license itself was a cheap affair – though the spectrum (both for 1900 Mhz and 3.5 Ghz) was auctioned at high prices. At that time, a number of Internet savvy people – Brain included – took the LL license only banking on new VoIP technologies to come to their rescue later.

A few VoIP technology companies (a cross between operators and technology vendors if you will) had been constantly chasing the smaller LL operators (as described above) evangelizing the use of VoIP in local loop operations where the ‘affinity to local numbers’ is the actual ‘good sold’ and the profit comes in from volumes of such ‘numbers’ beings sold worldwide at fixed monthly rates (but not actually always being used).

These VoIP technology companies met some success during the past couple of years with a number of LL operators signing up them either as partners or just technology vendors. At that time, cellular industry was priming and people, operators and the regulator somehow had little time to attend to this possibly controversial issue.

Now that the market is nearing a tele-density of over 50% and market consolidation has started, these by-issues will get more attention (and probably get more debated).

PTA’s clarification on use of VoIP (available from PTA’s website and discussed on some related online forums) is of little help as it leaves room for guessing by the readers.

My personal position here is that given the non-deterministic nature of public Internet (specially when the bandwidth is not directly coming from a T1 operator) as a transport mechanism for real time traffic, such ‘Internet-glued’ LL services should be allowed – they will always be placed at number 2 in terms of voice quality and deterministic performance. Such services could be declared a new class of service with clear requirement of informing end consumers about emergency services not working on them as well as possible degraded voice performance due to third party packet networks that happen to lie between the end networks. Given a considerable population of expatriate Pakistanis around the world, these services stand a fairly good chance of catching on in popularity and can earn some part of the much needed forex for country by the local companies offering such services worldwide.

Worldcall Wireless in Karachi

Worldcall has banners up in various parts of the city announcing the availability of their wireless local loop service which was anticipated since May 2007. The advertisements say free local call, free nationwide calls (presumably on their own network), 85 paisa per minute to US/UK and 10 paisa/min for WLL based Internet. The service is running off Huawei’s equipment.

CDMA based WLL services have already seen earlier players like Telecard and PTCL and have drawn a mixed response in terms of service standard quality. The ‘free on-net’ calling phenomenon which was triggered by Telecard (and is now being followed by Worldcall too) has found some loyal subscribers. I regularly spot shop owners in various localities of the city keeping a ‘Go CDMA’ phone as part of their communication arsenal and most of the time, the end user is doing the ‘least cost routing’ – finding the service that provides the cheapest service to reach the particular end number.

However, with a very high/healthy tele-density that is regularly being cited in anything good is to be said about Pakistan and a stiff competition and friction between DSL providers, it looks like that Worldcall as a late entrant in this digital communication race in Karachi would be having a tough time at best.

Performance of the reported availability of EvDO services on this network would be worth observing. If you have a review of the service, please post it in the comments.

Telecard Joins Stake Sellers’ Group

The News has this story on Telecard considering selling some of its stake to a foreign group:

The country’s pioneer and the largest payphone companies are in talks with foreign groups to sell off its share, what the industry believes is an attempt to attract investment for expansion.

TeleCard – one of few payphone companies in the country has planned to sell out its minority shares to one of the foreign business groups, it is in talks to and is expected to reach deal in the days to come.

“Actually the company has initiated talks with a UAE group and there are several other intentional players, which it eyes to engage in,” said a source privy to the company officials.“Though the company has not reached any conclusion with any group, it is expected to review offer of the different groups it has received.”

He said the company had almost decided total percentage of the company shares to be sold off but it had not yet disclosed the details. However, he said, the company officials believe it took more than anticipated time to strike deal for the desired sell off.

The country has witnessed a series of foreign takeovers in recent months as two foreign groups have already acquired majority stakes in local companies. First Qatar Telecom stretched its wings to Pakistan, entering into final talks to acquire Burraq Telecom with nationwide and intentional telephony networks at $30 million.

Then it was Egyptian Orascom Telecom – parent company of the largest cellular operator Mobilink – that finalised deal with DVCOM, a licensed LDI (long distance and international) and limited mobility telecom operator.

However, source said the TeleCard was more interested in selling out minority shares keeping management control in hand with majority stakes.“It’s a little early to suggest percentage planned to sell out but it would obviously be minority shares as the company wants to keep management control intact,” added the source.

He said the company had plans to expand its fixed line network across the country for which it looked for investment against shares sell off.“Currently TeleCard operates payphone and WLL (wireless local loop) services with also an ISP (Internet service provider in place,” he added.

He said TeleCard was ready to evolve as the most technological advanced integrated telecom solution provider of the country. “The company has successfully launched WLL service (GO CDMA) based on CDMA2000 1 X technology that provides the unique combination of voice and data/internet for the first time in Pakistan,” he added.

The country telecom sector has fast attracted foreign during last three years with main focus on cellular service. However, industry players believe it’s a high time for reputed intentional telecom operators to capitalise on opportunity in Pakistan, which offers one of the best business opportunities in its rural areas.

The country’s telecom sector has attracted $1.41 billion foreign direct investment during the first nine months of 2006-07, retaining top position among all other sectors. Figures released by the Federal Bureau of Statistics suggest foreign investment in the telecom jumped 34 per cent during July-March 2007.

Find The Candy

The long tipped off Mobilink-DVCOM deal is finally making it to the press. The News is reporting that deal with transaction value estimated at $12 million.

DVCOM obtained an Long Distance International (LDI) and WLL license in 2004. Under the LDI license, the company was operating a popular brand of calling card services called Big Time. The brand was the first one to start the price war on Pakistan-US calling destination @ Rs 5 per minute. The market rates (on fixed, WLL and cellular networks) have now dropped down under Rs 1 per minute, thanks to the fierce competition, popularity of the destination and tons of cheap terminating operators in the US.

DVCOM never really put the WLL license to any physical use despite acquiring 1900 Mhz licenses in 9 out of 14 telecom regions of Pakistan.  And so was the case with the 3.5 GHz allocation where the company acquired licenses in 10 out of 14 telecom regions.

So what could be the candy in DVCOM for Mobilink given the fact that Mobilink now has a full-blown PCO business wing? Real Estate? Human Resource? Customers?  None of these exist in the case of DVCOM. The only appeal seems to be the 3.5 GHz allocation that DVCOM has under its belt.

And perhaps this could explain the Wimax homework participations of the 23 million heavy cellular company in Dubai and (up coming) Singapore.

Worldcall Trials RedMax

Worldcall is currently doing trials with Redline CommunicationsRedMax platform for its Wimax (802.16d) services in Karachi Sukkar. As the company nears its launch of CDMA voice services in Karachi with 83 cell cites and a launch date (of CDMA voice services) of 6th May 2007, the same real-estate and infrastructure would be put to use for its Wimax services for which the 3.5 GHz frequency is already in the kitty.

Worldcall Nears Homerun

Worldcall, one of the three nationwide CDMA operator (besides PTCL and Telecard), is launching its CDMA based voice services in Hyderabad, Sindh in the next couple of days.

Earlier, Worldcall services, that started from central Pakistan had reached till Sukkar. The Hyderabad network leg is based on hardware from Huawei Technologies. Hyderabad launch will help the company brace itself for a subsequent Karachi launch which is considered a very mature market with already high cellular, fixed and WLL penetration.

Cellulars Spends over $15m on Satellite Capacities

Telenor & Mobilink will collectively spend over 15 million dollars on satellite based capacities to reach the juiciest of the cellular markets in Pakistan. These markets are FATA (Federally Administered Tribal Areas) and AJK (Azad Jammu Kashmir)

There are many factors that make these markets irresistible for the cellular business. These places have remained under-served for various reasons. Political reasons, difficult terrain, extreme weather. The market remains a popular telecommunication service destination because of the people from these areas have been ‘going out for work’ to every part of the country and every country of of the world. This special nature of ‘half-migration’ which is particular to the population of FATA and AJK people paints a unique equation in term of calling patterns.

Calls are made from all over Pakistan to FATA areas by the hard-working Pathan population. AJK receives majority of its call from United Kingdom where a huge number of people with Kashmiri origins reside.

The AJK area has been served for telecommunication needs by an autonomous (but with a military background) organization called ‘Special Communication Organization – SCO’. The sector was opened up for other cellular and local loop operators under the current Telecommunication De-Regularization and Liberalization policies of the Government of Pakistan.

Telenor has been the first one to penetrate in these markets. With no traces of fiber going out from any of the major cities of Pakistan to these areas, the only option available to the cellular operators is to use satellite capacities to connect their networks in FATA and AJK back to their national network in the rest of Pakistan. Telenor is reported to have obtained satellite capacity and services from Wateen Telecom.

Enjoying an absolute majority in terms of number of subscribers, Mobilink is eager to catch up with Telenor by going the satellite route for its network expansion in these areas.

Volumes that are expected on these two routes warrants multiple transponder capacities on Satellite. Capital expenditures are high by the local industry standards and in some cases warrant establishment of dedicated service organization out of the requirements.

Until fiber makes it way into these far flanged areas, a good two to five years of Satellite operations are expected. Utilization should then start dwindling down to the role of backup and critical applications. Space segment sellers and Satellite Service industry in Pakistan can play happy till then.