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Sun 1 Apr 2007 01:36 PM

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Competition commences

The desert state of Namibia in East Africa has been one of the last countries in the region to open its telecoms market to competition. The arrival of Powercom is likely to help the national agenda in the effort to boost the population's access to ICT facilities by 2030.

Incumbent operator MTC Namibia launched mobile services in 1995 as a partnership between SwedFund, Telia and the Namibian government. The Swedish investors sold their 49% stake in 2004 and in June 2005 Portugal Telecom acquired a 35% shareholding, while the Namibian government continued to hold the balance. A further 15% is set to be made available to local indigenous partners.

As the operator of the sole mobile telecoms company in Namibia, MTC Namibia counted approximately 620,000 subscribers at the end of January 2007, in a population of around 2 million inhabitants. The GSM network extends to 92% of the population but just 65% of the geography of Namibia, as a result of the country's expansive landscape.

In the middle of last year, the Namibian government awarded a second cellular licence to Powercom, a joint venture between power utility NamPower and Telenor of Norway. Last month the operator began commercial operations with a launch in Windhoek, under a brand name Cell One. Telecom Management Partner (TMP), a strategic partner of Telenor, controls 39% of Powercom, Namibia's power utility NamPower 37%, and the rest is controlled byNammic, the investment arm of the Namibian trade unions.

The new entrant's network is set to be rolled out in phases over the coming months, with its services extending to the north of the country in 2Q07. "The Cell One network is currently available in Windhoek but will be rolled out in phases to the rest of the country," said Cell One CEO Mac Allman speaking at the company's launch.

In addition to the network launch, the operator also unveiled several retail outlets across the country as well as its per second flat rate pricing strategy for prepaid and subscription users.

"With Cell One you only pay for the time you talk. If you talk for 13 seconds then you only pay for 13 seconds. There is no start-up cost and we will charge the same price for calls regardless of the time of day or night," revealed Allman.

Services currently available to Cell One subscribers include voice calls, SMS, international calls, voicemail retrieval and credit enquiries. Interconnection with MTC Namibia and Telecom Namibia is already possible.

While the point of ushering in competition had been to improve the provision of telecoms services in the country, controversy has already been stirred up in Namibia's limited telecoms market. At the beginning of March, Telecom Namibia subscribers who had been using a fixed wireless solution offered by the telco to make calls over a wide geographic area, saw that coverage area reduced to a radius of just 60 kilometres by the Namibia Communication Commission.

In December last year, Telecom Namibia acquired an IP/MPLS data backbone network for N$120 million (US$16.3 million), enabling it to transmit radio signals digitally for data and voice calls in a move geared at becoming an all-IP, converged telecoms provider.

MTC Namibia still objects to the radius limit instituted by the regulator, arguing that does not address the fundamental issue of not allowing roaming, or handover between cells, even if it is in the same town. "Handing over between cells is the licensed domain of the two mobile operators in Namibia, for which we have paid licence fees," MTC Namibia commented in reaction to the development.

"Allowing Telecom Namibia to infringe on the licensed right of mobile operators means that there are now three operators in the market while it was clear that there would only be two when Portugal Telecom bought the 34% state in MTC Namibia", MTC Namibia continued.

Namibia's cabinet resolved to restrict the new service until new legislation on communication is tabled later in the year. MTC Namibia has also been looking to shore up its market position ahead of the entry of competition through the effective utilisation of emerging technologies.

In February, MTC Namibia, together with Motorola, and the GSM Association (GSMA) signed an agreement to conduct a trial project in the country involving the use of wind and solar power systems for MTC Namibia's remote GSM cell sites.

The trial involves the installation of Motorola's wind and solar solution at an operational MTC Namibia cell site. The wind and solar solution will power the site, which will remain a part of MTC Namibia's wireless network and carry normal traffic levels.

"We are confident that this trial will support our market growth strategy and enable us to extend our network coverage to incorporate the more rural parts of Namibia - where electricity is not always a viable option - quickly, efficiently and with a reliable solution. Motorola's innovation and design expertise will enable wind and solar solutions to be deployed in an optimal format for wireless cellular networks," commented José Ferreira, managing director at MTC Namibia.

"Off-grid connectivity is a key challenge for operators, in particular in the developing world markets, and until cost-effective, practical solutions are commonplace, the digital divide will persist," commented Dawn Hartley, development fund manager at the GSMA. "The GSMA is therefore committed to piloting alternative energies for powering base stations, and we are delighted to be involved in this trial in Namibia."

The project represents the first customer-based trial in the world and is expected to run from April to July 2007. According to Motorola, the ‘green' solution requires minimal site maintenance, unlike alternative options such as sites powered by diesel generators, which generally require, at a minimum, a monthly refuelling visit. Motorola claims that its green solution translates into added savings in operating expenditure.

Last month MTC announced the launch of its push-to-talk over cellular (PoC) service, claiming to be only the second African country to offer the technology over a cellular network. MTC Namibia claims the benefits of PoC are numerous, and that compared with traditional two-way radio systems, such as Land Mobile Radio (LMR), Professional Mobile Radio (PMR), and the Family Radio Service (FRS), one of the most obvious advantages is the coverage area provided by the GSM network.

PoC allows users to make push-to-talk calls between two people or within a group of people over nationwide networks and across regional borders. Another clear advantage is flexible and spontaneous group communication because it is quick and easy to create and activate new talk groups.

In summary, MTC Namibia expects five key factors to drive PoC growth in the country:

1. Voice:

Voice is the ‘application' that everyone is familiar with, and PoC is primarily a voice service that will drive the walkie-talkie functionality.

2. Ease of Use:

PoC offers a quick and convenient alternative to the text message through a single button interface, with no number dialling required.

3. Presence:

It is easy to see who is available to talk through the contact list. In a manner similar to instant messaging, the presence capability informs users if a person is available to talk or not.

4. Immediacy:

Connection is quick, without the ten or more seconds required for the call connection that is standard for GSM calls.

5. Group Calling:

At the push of a button, users can access a group of people and everyone can hear the caller simultaneously, without being interrupted by other members of the group. Also, the name of the person who is talking appears on the phone screen.

In January MTC Namibia announced it had invested N$17 million in satellite technology that would expand its network to remote areas.

A company called Advanced Telecoms has been awarded the contract to implement GSM backhaul to support the rapid growth of the operator's mobile subscriber base, and will be supported by SatCom, a local satellite implementation company.

The first phase of the project was completed in November last year to cater for some 15 new base stations while others were set to be ready earlier this year.

In December MTC Namibia, announced the launch of a robust 3G network, at the time making it only the third operator on the African continent to have done so.

During Phase 1 the network will be deployed in Windhoek, the capital, and the coastal settlements of Walvisbay and Swakopmund. Phase 2, commencing in April 2007, will eventually cover majority of the country's commercial settlements.

"It is true that firms and countries that use ICT solutions widely, grow faster, invest more and are more productive and profitable than those that do not," commented Ferreira at the launch ceremony. "We want Namibia to feature prominently among such nations of the world. With 3G, we are raising the bar even higher for Namibia and its people."

The Namibian government has set a number of ICT objectives within in ‘Vision 2030' initiative and believes investments in technologies such as 3G will be important for that development.

Namibia’s Vision 2030

Vision 2030 is a national plan to “improve the quality of life of the people of Namibia to the level of their counterparts in the developed world by 2030”.

It is aimed at transforming Namibia into a healthy and food-secure nation, in which all preventable, infectious and parasitic disease (including HIV/AIDS) are under secure control; people enjoy high standards of living, a good quality life and have access to quality education, health and other vital services.

ICT’s role in helping achieve Vision 2030

Things to achieve

• Develop and implement a comprehensive ICT policy.

• Integrate ICT education and training in school curricula.

• Invest in research for development, to promote local ICT industries.

• Improve access to ICT facilities for all members of the Namibian society.

Where we want to be (2030)

• Comprehensive national ICT policy implemented.

• IT training from pre-primary through secondary education.

• A university of Applied Science and Technology with adequate support established.

• Collaboration among science and technology research groups involved in ICT in developed world and Namibia entrenched.

• Internet access available to and used by most Namibians.

• Internet access costs reduced and speed improved to high level.

• Internet-based training facilities reach all Namibians.

• Wireless networks installed across Namibia.

• Significant local production of ICT equipment achieved.

• Incentives and subsidies for computer hardware purchase available.

• Support for entrepreneurs in ICT available infrastructure and advanced services.

Source: Policy Framework for Long-Term National Development

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