The Next Big Market?
An assessment of opportunities in Africa for cdmaOne, plus a round-up of some of the major contracts and agreements of the past two months.
Had you been at the ITUs Africa Telecom show in Cairo in 1994, cdmaOne would have been conspicuous by its absence. Hardly surprising given that the biggest markets for the technology were only established a year or two later.
Four years on, the latest Africa Telecom, in Johannesburg in May, was a very different story. Companies like Globalstar, Samsung, Lucent, NEC, Nortel and Motorola all attendees at the Cairo event are now offering cdmaOne networking solutions as part of their portfolio. For one company, however, this was the first visit to the show. Qualcomms Charles A. Oshunremi, vice president, Africa, was there to promote the companys activities in that continent. This includes a significant contract in Nigeria.
There will be, he said, "a fixed access network going into the deployment stage in Nigeria soon, especially in the metropolitan city of Lagos, providing alternative wireless access technology for delivery of residential business services based on cdmaOne technology. Weve set up a company which is privately licensed by the Nigerian Communications Commission for operation in the 1.9 GHz frequency band."
This fits in with the popular assumption that fixed wireless access generally is going to be the front-runner in sub-Saharan Africa, where fixed networks are often inadequate and markets for mobile may not be as profitable. Oshunremi backs up this impression with a description of another planned contract: "We are in the process of deploying a significant CDMA WLL network in the Congo as well; that activity should begin in the next couple of months. We have an agreement with Mauritius Telecom and we will be deploying CDMA there as well."
He does not, however, agree that WLL is the only useful strategy in Africa. As he points out: "We are actively discussing with several other African countries mobile and fixed applications in both the PCS 1900 frequency band and the 800 frequency band." In fact, as for selling CDMA in an African environment, he is open-minded: "We would position cdmaOne to address specific requirements that telephone operators may have in Africa, be it fixed access or be it mobility. Our customers requirements will be the driver for us."
The advantage of rival technology GSM for roaming in certain markets is accepted, but he does not believe it can offer genuine global roaming, pointing to Qualcomms partnership with Globalstar as a possible solution. "We are the contractor for the Globalstar gateway systems as well as the Globalstar handsets, and it is our ambition that our subscribers worldwide will be able to benefit from this global mobility using Globalstar."
It isnt necessarily going to be an easy ride in Africa. Oshunremi, like others, is, however, clear about the limitations of the market: "One clear task in Africa not necessarily an impossible task, but yet a task is the issue of finance." Not all African countries have banking systems well developed enough to support very costly infrastructure projects such as telecommunications, he suggests.
Deployment is a different issue: "I dont believe there are any more particularly unique tasks in Africa than you would find in other places with the exception of the infrastructure in Africa being largely poor, both in telecommunications and roads... In a few cases there are extreme conditions like severe lightning for example in South Africa. One needs to be cognizant of that."
This is an interesting point because, for many companies, South Africa remains an important target market. Already operating two GSM networks, it seems the hunger for wireless there has not abated. A third network is due to be licensed later this year. Whatever technology it uses, the combination of South Africas relative wealth by the continents standards, and a perceived social obligation to bring communications to poorer or more isolated areas could offer other opportunities notably in fixed access. It certainly seems that, as Charles Oshunremi says, "these are exciting times in Africa."
AirTouch and MediaOne $6 Bn merger
AirTouch Communications Inc. and MediaOne Group, formerly US WEST Media Group, have completed merging MediaOne Groups U.S. cellular and PCS interests into AirTouch. The merger became effective in April. MediaOne Groups international wireless interests are not included in the transaction.
This acquisition increases AirTouchs U.S. cellular and PCS proportionate customer base by 56 per cent, to 6.9 million, making the company the second largest wireless provider in the United States based on fourth quarter 1997 proportionate customers.
The transaction increases the companys ownership in PrimeCo from approximately 25 to 50 per cent. AirTouchs cellular and PCS footprint now covers cities in 25 states, reaching a total of 145 million people over half the U.S. population.
Wireless first for China
Under the contract with Shanghai Posts & Telecommunications Administration (Shanghai PTA), Motorola CIG will deploy additional fixed wireless terminals (FWTs) and SC4852 base stations for the expansion of the CDMA WLL system. Full deployment is scheduled for completion by the end of June, increasing the overall capacity of the system to 10,000 subscribers.
Japan: CDMA is on its way
Network launches or new service are scheduled for July 14. In addition, DDIs five remaining cellular subsidiaries and IDO have recently submitted applications to provide cdmaOne services to the Ministry of Posts and Telecommunications.
Based on current deployment forecasts, Japan will enjoy nationwide cdmaOne coverage by April 1999. PDC, the existing system, is being replaced because of its inability to keep up with strong demand.
GTE Wireless and Baja Celular of Tiajuana, Mexico have partnered to use digital networks that allow both American and Mexican cell sites to serve calls simultaneously without signal interference, says GTE. Both carriers contracted with Motorola Inc. to provide the networks for the two compatible systems. The partnership is said to represent the first-ever CDMA hand-off between cell sites across international borders. "If the strongest signal is achieved using a cell site in Tiajuana, the network automatically recognizes and utilizes that signal in a seamless process," explained Lindsey Burroughs, San Diego area president for GTE Wireless. Calls will be billed based on where they originated, without roaming fees.
Compania Dominicana de Telefonos (CODETEL), the Dominican
Republics largest telephone company, has announced plans to invest
approximately $40 million over the next five years in digital PCS. CODETEL,
a wholly owned subsidiary of U.S.-based GTE Corp., selected Lucent Technologies
to build its PCS network based on CDMA technology.
The first phase of CODETELs network build-out
will include the capital city of Santo Domingo, Santiago and the corridor
linking these two metropolitan areas. Service is expected to begin this
Lucent Technologies and Motorola are among suppliers for third generation CDMA equipment for a trial to be conducted as a joint venture by Japans DDI Corporation and IDO Corporation.
In Tokyo, the two Japanese wireless companies announced they will conduct
a trial designed to evaluate, research and develop a wireless
transmission method that is an evolutionary step from the
IS-95 cdmaOne standard technology. The two cellular operators
said the trial system will be based in the countrys
Kanto region. DDI and IDO will operate under an experimental
licence in the 2 GHz frequency band, which is part of the
proposed IMT-2000 frequency band reserved for worldwide wireless
NEC wins Brazilian bid
NEC has landed an order for a CDMA-format cellular phone system from Telebahia, a regional phone company in eastern Brazil.
The order is worth about 5 billion yen (about $38.16 million) for parent NEC and about 25 billion yen (about $191 million) for the NEC Group, including NEC Brazil, based in Sao Paulo. The order includes the configuration of a network comprising base stations, control units and exchanges. Initially, the system will cover about 25,000 subscribers on the 1.25 MHz band. Telebahia will then switch the current 25,000 analog subscribers over to digital.
NEC do Brasil also signed two large contracts in April
1998 to deploy CDMA digital cellular mobile systems in Sao Paulo and
Rio de Janeiro.
On April 14, NEC do Brasil and the Brazilian telecommunications operator TELESP Cellular signed another contract to deploy a CDMA digital cellular mobile system with a capacity of one million lines.
Thailand announces first CDMA service
The Communications Authority of Thailand (CAT) has officially launched its CDMA mobile telecommunications service. CAT has partnered with Lucent Technologies Inc. to establish the CDMA network, the first of its kind in Thailand.
CAT is the owner of Thailands international gateway and other telecommunications infrastructure, including both submarine cables and satellite networks.
Covering an extensive part of Thailands central region, the 800 MHz CDMA network will initially serve a maximum capacity of 150,000 mobile subscribers; much of the coverage focuses on the greater Bangkok Metropolitan area.
Sixty-nine CDMA cells have been installed in an overlay pattern with existing analog cells to allow interoperability with dual-mode handsets. At the heart of the network are two collocated mobile switching centers, the core of which is a Lucent 5ESS-2000 switch.