Tough conditions

zoom

There can be few more demanding environments for a mobile operator than Palestine. Jawwal's CEO, Amar Aker, tells George Bevir how the company is facing up to its many challenges.

The chief executive officer of Palestine's only licenced mobile network estimates that if the operator's current rate of growth continues then in two years time it will not be able to keep up with demand. Amar Aker, Jawwal CEO, says that the network has been operating with "a minimum of frequency" for years, and that Israel has never responded to the company's requests for additional frequency.

Technically Palestine is the only mobile monopoly in the Middle East, but ever since the first call was made on Jawwal's network in 1999, the Paltel subsidiary has had to compete with four Israeli operators. A second Palestinian mobile operator, Wataniya Palestine, was due to launch last month and when it eventually does Aker claims it will actually help Jawwal.

He says that having a domestic rival will allow Palestinians to compare Jawwal to an operator that is subject to the same constraints as his network, restrictions which Wataniya Palestine is experiencing at the moment as it struggles to get the frequency it needs to launch.

Over the past month Tony Blair, former UK prime minister and representative of the Middle East Quartet of the US, Russia, the United Nations and the European Union, has been working to get the frequency released by Israel as part of his wider remit to mediate the peace process between Palestine and Israel.

In May last year, Blair announced that the government of Israel had approved Wataniya Palestine's entry into the market and agreed to release limited frequency to test its network and then more for it to launch. A month later Israel signed an agreement to release 4.8 MHz by April this year for the commercial launch of Wataniya, and, "in due course" a further release of another portion of frequencies to allow for an expansion of the network.

According to the Office of the Quartet Representative, Israel also agreed to release "a sufficient portion of frequencies for the expansion of Jawwal to comply with the PA's nine-year old request in 2000".

Some reports have suggested that Jawwal, which will soon be rebranded Zain as part of the Kuwaiti operator's acquisition of parent company Paltel, needs to shift some of its own frequency for Wataniya Palestine to use before more is released by Israel. Aker dismisses the notion, and he says that it is an attempt by Israel to shift the burden of responsibility to the Palestinian Authority (PA) and Jawwal.

Aker, who joined Jawwal as chief financial officer in 2001 before taking over as CEO in 2005, says Jawwal does not have any frequency to spare. "We operate with a minimum of frequency, which is a maximum of 4.8 MHz, although it is not fully exclusive to us. It can hardly accommodate our current needs," he says.

The Office of the Quartet Representative says that there are available frequencies on the 1800 MHz band that would allow Israeli authorities to make previously agreed allocations to the PA. It says there is currently 40MHz available out of the 75MHz on the 1800MHz band, according to a recent scan conducted by Ericsson.

Israel's Ministry of Communications has claimed, without elaborating, that the PA has failed to undertake certain conditions set out in the agreement. When asked by CommsMEA why the frequency had not been released, Israel's Ministry of Communications said "the Palestine side is encountering difficulties to fulfill their part", without elaborating.

"We try to live with what we have, we try to overcome the technical obstacles we have but I guess we will probably face some difficulties after a couple of years with the growth we have," Aker says.

"Right now we have about 1.5 million subscribers. The current frequency we have will probably take us to two million or two and a half million, and that's it. We don't want to jeopardise quality just to add numbers of subscribers."

Analyst Hadeel Sakkijha, of Arab Advisors, says the difficulties in obtaining frequency and equipment have had an adverse effect on the network. "The quality of network and service that Jawwal provides to the market suffers because there is more demand than supply," she says.

"The capacity of the network that Jawwal has is not sufficient for the huge demand of the Palestinian market. This affects the services, and it affects the prices as well; since Jawwal is providing relatively low quality services it would be obliged to decrease its prices in order to compensate the services," she says.

An Arab Advisors survey, conducted in October last year, showed that Jawwal's postpaid average connection fees were US$8.86; significantly below the average of other Arab countries, at US$26.90.

Aker says that to handle additional growth Jawwal adds more cell sites with many located on rooftops, often very close together. This, together with improvements in the software that manages and controls the frequency, have enabled Jawwal to add between 200,000 and 300,000 subscribers a year for the past four years. But unless further improvements are made, there will be a limit to the number of subscribers Jawwal can add to its network.

This year, Jawwal set aside US$40 million for capital spending and so far it has spent $22 million. Aker says Jawwal would invest more, but any equipment that is purchased has to pass through Israel.

"It takes months for some reason or another, and that's part of our daily operation to manage the difficulties that we face from the Israeli occupation. But once we have more frequency I'm sure we can add more subscribers with the current infrastructure we have," he says.

Print | Email | Discuss this article

| Share |

MORE FROM ARABIANBUSINESS.COM