Fixed agenda

The head of the regulatory division of ICTQatar, William Fagan, tells George Bevir about the organisation’s plans for 2010, including boosting broadband penetration and improving the standard of customer care offered by the country’s operators.
Fixed agenda
By George Bevir
Thu 07 Jan 2010 04:00 AM


The head of the regulatory division of ICTQatar, William Fagan, tells George Bevir about the organisation’s plans for 2010, including boosting broadband penetration and improving the standard of customer care offered by the country’s operators.

In the nine months since it launched,
Vodafone Qatar

has signed up 320,000 subscribers, firmly bringing an end to
Qtel

’s mobile monopoly. But competition has yet to reach fixed services, with
Vodafone Qatar

and the Qatar Foundation still waiting to be officially awarded the licence that was provisionally granted in September 2008.

Two months ago,
Vodafone Qatar

said the consortium was “working through the pre-grant requirements specified by ICTQatar prior to being awarded the licence,” and that “the management anticipate this could be finished by the end of November 2009 to enable the first fixed services to be launched in late 2010.”

The head of ICTQatar’s regulatory division, William Fagan, points out that it isn’t the regulator holding things up. He says the reason for the delay is that
Vodafone Qatar

and the Qatar Foundation have yet to form the company that will look after the fixed interests.

“There are some corporate governance issues, which we expect to be overcome very shortly,” he says. “The issues holding this up will be resolved early in the new year...I would expect to see the fixed service occurring in 2010.”

Allowing a second telco to offer internet services will play an important role in boosting internet usage in Qatar. According to
Qtel

’s third quarter results, it had 427,130 users of its fixed internet and triple play services, from a population of 833,285. Fagan says that Qatar is no different from most other countries in that raising the broadband penetration is a prime objective.

“We want it to be at a level that puts Qatar up right there with the leading countries in the world,” Fagan says.

He is reluctant to talk about specific download rates, but the countries he references - Singapore, Korea and Japan - claim maximum theoretical download speeds in the region of 80Mbps and above and some of the highest average download speeds in the world.

“We are conscious of the fact that it may need big fibre developments, but it may also require a combination of other technologies,” Fagan adds.

Fagan says that while a return on investment for fibre deployment could be achieved in less than five years in high density areas of Qatar, in medium density areas it could take as long as 20 years. Talks are taking place with operators about the possibility of combining different types of technology to alleviate some of the cost of fibre while maintaining the focus on speed, with wireless technologies LTE and WiMAX mentioned as possible solutions to the coverage conundrum.

Sharing resources

Fagan estimates that 70-80% of the cost of installing fibre is related to the cost of the dig and the process of putting the cable into the ground. To reduce the cost, he says infrastructure could be shared, although the precise terms of any agreements have yet to be finalised.

“We put out something in the original fixed licence which provided for no mandated access - which is slightly different to exclusivity - for a period of three years, but that may or may not be a feature of the final licence. But generally, as a regulator, you do not favour exclusivity,” he says.

A passive infrastructure licence could be provided to developers of major projects so that buildings do not have to be revisited for fibre installation. Fagan gives the example of the new airport being built in Qatar that he says will “probably” be ducted and fibred by the builders, leaving the various businesses grouped in the airport complex free to choose their service provider.

“It’s a common model; if you look at Heathrow in the UK you’ll see a similar model,” Fagan says. “Otherwise you have people coming back into the development once it’s been built and it annoys people. The idea is that if the fibre goes in now, new buildings will be ready-equipped.”

Relations between Vodafone Qatar and
Qtel

appeared to sour over the issue of sharing the incumbent’s mobile infrastructure.
Qtel

reacted strongly to what it perceived to be accusations of intransigence; the incumbent said it had fulfilled all its regulatory obligations and that any delays to the roll out of
Vodafone Qatar

’s network were a result of poor planning on the newcomer’s part.
Vodafone Qatar

issued another statement, with CEO Grahame Maher saying he was “impressed with
Qtel

’s willingness at a board level to share towers …however it is taking a lot longer than I expected for sharing to be implemented”.

“Nothing that has happened here is unusual,” Fagan says. “It is natural for the incumbent to consider that it has invested in the network, and therefore why should it share. And if it has to share, that it should get a return on the investment.”

ICTQatar’s approach, Fagan says, has been to let the operators attempt to reach a consensus by themselves. “We might appear to be operating behind the negotiations, but it has proven to be a successful formula here, and we would expect the same thing to arise in relation to fixed, such as a request for the sharing of infrastructure.”

Fagan explains that if the operators are unable to form an agreement the matter can be passed on to ICTQatar, which has happened three times so far. The first instance related to interconnection rates, the second to the in-building agreement and third was to do with the access and the pricing of access to the international cable connecting Qatar to the rest of the world.

Caring for customers

Incumbents in the Middle East are often accused of failing to accomodate the needs of customers. Fagan says that the reason why incumbents may act this way is because they know the customer has nowhere else to go.

“Starting from that premise, as soon as a customer can walk you see a sudden sharpening of the eyesight on customer care,” he says.

After
Vodafone Qatar

launched,
Qtel

published a customer charter in response, the operator said, to calls for better customer service across a range of areas. ICTQatar wants to see further progress, and contracts are one area in particular that the regulator has been working with operators towards improving. It wants to make sure customers enter into fair contracts, and that contracts are available to the customers. But the biggest problems, Fagan says, are billing and the installation of services, which he estimates account for half of all complaints.

When talking about customer care, Fagan gives the impression that he has experienced his share of poor service.

“The thing that is most infuriating for any customer is when you speak to customer care and the person you talk to is not able to resolve the problem and that they have to escalate it. Or, someone has to ring you back - and of course they never do - and if they do ring back they have no record of your call.”

Qtel

and
Vodafone Qatar

have both installed what Fagan describes as “sophisticated customer care systems”, although he cautions that they are still “work in progress”. “I would say that we are not 100% satisfied with either company...I think they have a lot done, but they have a lot more to do, and it is something that we will continue to work at,” he says.

Fagan claims that 99% of complaints are resolved to the satisfaction of the customer and that while the operators’ systems may not be fully up to speed, he says both operators are cooperative and that complaints are resolved when they get to “the right level”.

“What we want to see happening is the complaint resolved at the lower level, when the customer speaks with the customer service representative. This is where training and change of culture needs to take place. Both operators are moving in the right direction but neither company is there yet,” he says.

Sector survey

The head of ICTQatar’s regulatory division, William Fagan, says that delays to the launch of the second mobile operator and the issuing of the fixed licence may impact on a market survey due to take place this year.

“We had indicated in 2007 that we would carry out a strategic sector review in 2010, and we’re looking at this and talking to the parties about how we will go about doing that,” Fagan says. “The idea was that in 2010 we would review how far competition had got, and whether there is a sufficiency of competition, innovation and investment in the market place. Given some of the delays... it may be that we might determine that we will do this over a longer period or we might just look at certain aspects of it in 2010.”

With
Vodafone Qatar

rapidly establishing itself, the issue of a third operator in the guise of an MVNO has been raised.

“At this point in time we want Vodafone to finish building its network. In terms of MVNOs, people have been approaching us for the last few years... at the time that they were approaching us it might give the appearance of competition but what it might have fragmented the market. We will look at this and all other options as part of the 201o review.”

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