Middle Eastern diversity leads to new allegiances
The expansion of Middle Eastern mobile operators into new markets became commonplace in the late 1990s and, in 2007, showed no signs of abating. Massive deals were still spurred by booming stock markets allowing, most recently, the likes of Saudi Telecom to expand regionally – and into the CEPT’s sphere – with the proposed purchase of a slice of the Oger empire and with it Turkish mobile assets.
Qatar Telecom (Qtel), last year purchased part of Wataniya Telecom, giving it footholds in Tunisia, Algeria, Saudi Arabia and Iraq. What is more, the company also undertook a joint venture with SingTel early in 2007 which gave it stakes in Starhub Singapore and Indonesia’s PT Indosat. Naguib Sawiris’ Orascom Group continued its march into Europe. Having gained ground in Italy in recent years, Orascom’s parent company began to look further into Europe, trying to pare Bouygues Telecom away from the French construction group.
In short, Middle Eastern telcos continued to expand their sphere of influence into new countries and regions. Orascom and Saudi Telecom now have a voice in CEPT, Qtel the APT, and all are present in various influential African administrations. The question, as the regulatory influence of their telcos continues to expand, is how this has changed the regulatory outlook in their home markets, under the guidance of the Arab Spectrum Management Group (ASMG).
Unified spectrum needs
While diverse, the topography of the Middle Eastern region (wide areas of very sparsely populated land punctuated by large, thriving cities) has meant that its mobile operators have traditionally had broadly similar spectrum requirements across the region. Small urban areas have needed higher-frequency capacity spectrum while the majority of the landmass needs lower frequencies. In many cases, there are wide areas where population density is too low to allow coverage from the cellular network. Spectrum capacity needs, similar across the Middle Eastern region, are thus subtley different from other parts of the world.
In its responsibility for the coordination of these needs, the ASMG has traditionally been one of the most tightly-knit regional bodies. MENA administrations have, in the past, been unified behind an ASMG speaker at major events and, of course, World Radiocommunication Conferences (WRCs). The effect of the Middle Eastern telco expansion could have resulted in the ASMG garnering greater support from national administrations or even sub-regions to bolster the Middle Eastern positions. With incumbent telcos – often still nationalised – expanding into new markets, the possibility arose of strengthening support for ASMG views.
In reality this has not occurred, as demonstrated in Geneva last October. Onlookers at last year’s WRC were frequently surprised by the differing opinions across the ASMG, especially when it came to the question of spectrum for mobile (IMT) services. The two main chunks of spectrum being argued over were the top end of the UHF band at 790-862MHz and the bottom end of the C-band at 3.4-3.6GHz. Opinions on both divided the ASMG.
While the likes of Egypt, along with Lebanon, Jordan and Morocco, among others, were strong supporters of allocating new spectrum in the UHF band to IMT, Syria, Algeria and – most strongly of all – the UAE fought against its allocation. Votes for the 3.4-3.6GHz band’s allocation to IMT services also divided the ASMG, with Egypt, Saudi Arabia and Oman pushing for its allocation, and the UAE, Lebanon and Yemen fighting against it.
There are many reasons for this, but the simple one is that, while mobile telcos in some countries are hungry for spectrum, others are not. When one country’s cellular operators have international assets in highly industrialised markets and another’s concentrates on emerging markets, spectrum needs will differ.
In Egypt, for example, both Orascom (through parent Weather Investments) and Vodafone Egypt are hungry for additional, low-frequency allocations in the UHF band not just in Egypt, but in a number of other markets in the heavily industrialised world. While its broadcasters also needed protection at the WRC, Egypt’s IMT-conscious stance was undoubtedly influenced by the international needs of its mobile operators, among other things.
By contrast, Etisalat, a UAE company, has very different spectrum needs. Its large international presence is mainly in the emerging markets, in countries with lower mobile penetration. Etisalat’s growth is thus less dependent on increased access to spectrum. As such, the company did not have a strong presence at the WRC.
UAE officials often justified their position, essentially one of giving no additional spectrum to mobile, by stating that their local mobile phone operators – Etisalat among them – did not require the extra spectrum being haggled over at the WRC. As such, the UAE wanted the C-band left for the satellite operators and the UHF band left for the broadcasters. While Egypt and others were forced to walk a tight-rope between the conflicting spectrum interests of their broadcasters and mobile operators, the UAE was able to simply vote for no change.
African needs unite
While the ASMG, traditionally a highly unified regional group, was split down the middle at WRC-07, the African Telecommunications Union (ATU) managed to form a unified and cohesive stance early on in last year’s conference. A complete, unified African position on allocating the UHF spectrum to IMT was reached by the end of the second week of the month-long WRC-07.
African unity remained based around common goals and common spectrum uses: the glue that has traditionally bound Middle Eastern opinion together. The need of African mobile operators to cover its vast landmass meant that a UHF allocation to IMT was vital: lower frequencies cover larger areas. This UHF need proved telling to the outcome of the entire conference. A proposal put together through Southern African Development Community (SADC), to allocate the band 790-862MHz to IMT was rapidly taken up by the rest of the ATU. The African position was then adopted by Europe and the Middle East and was eventually taken up by Asia as well.
The C-band, in Africa, was split solely by differing climates, with the tropical areas of the continent voting against its use*. Southern and North African countries, who are less reliant on the C-band for satellite services, remained keen to allocate this for use by mobile / wireless broadband providers. This would boost their communications infrastructures with wireless broadband in areas where there is no fixed-line alternative. Central African countries were united against its use, where high rain fall means that this is vital satellite spectrum. Common uses and region-specific issues continued to drive consent in Africa throughout last year’s WRC. Other regions were less united. It would take another, and substantially longer article to chronicle the process needed to ensure CEPT, eventually, found a united position.
The changing attitudes to mobile spectrum needs across the ASMG can be attributed to many more things than the increasing dominance of its mobile telcos in the global market. Certainly, as regulators in the Middle Eastern region increasingly open up their markets to competition, some have outstripped others in terms of their consumption of spectrum. However, as Middle Eastern telcos move into more and more new markets, the pressures on their home regulators will continue to diversify. The question of how to apportion spectrum in order to best serve the population of your country becomes far more complex when money and livelihoods are intrinsically linked to the success of your national telco in foreign markets.
Unity in the ASMG will no doubt continue to be a central feature of international telecoms negotiation, but as the international success of its telcos continues, it can neither be achieved easily nor relied on completely.