Jet Net’s new Jordanian investor plans voice and data challenge using WiMAX
WiMAX-based ISP Jet Net has recently come together with the Jordanian Neu Group to pioneer a WiMAX voice and data challenge in one of Africa’s largest markets, Sudan. The regulatory and market challenges are considerable but the new investor has a successful track record both in mobile and WiMAX markets. Russell Southwood spoke recently to the company’s CEO Ahmad Jaghoub.
The new investor in Jet Net is Michael Daghar’s Neu Group. Daghar successfully launched Umniah as Jordan’s most successful third mobile operator. He was subsequently bought out by Batelco for US$400 million and founded his new company in 2007.
Jet Net’s business model is that it will initially target data and build infrastructure to make this viable. However, it will have in place IMS servers by Q3 this year and subject to get the relevant licensing and approvals will then move into the voice market.
Installation is based on the WiMAX 16e standard that can support mobile voice. The company envisages using WiMAX-enabled handsets from companies like Samsung. Currently these phones are selling retail for between US$150-300 but they also plan to have a CPE (costing US$200-250) that will support a SIP phone. It plans to subsidise the cost of the CPE and persuade customers to share CPEs, in order to get more customers and coverage. It believes that its implementation will offer high quality, indoor coverage.
In its first phase of expansion, it will install 50 base stations in the capital Khartoum and take 14 existing base stations and install them in the country’s second city, Port Sudan. In the second year, it plans to expand its network in Khartoum and upgrade its services, before starting to put in place coverage in the south and elsewhere. Its total investment in the first phase is between US$20-30 million: investment will initially come from the Neu Group but as it expands, it wants to diversify its sources of finance.
The BTS equipment cost is around US$50,000 and the total BTS cost including civil works will be anything between US$130,000-250,000. Construction costs are three times those elsewhere in the Middle East because of the cost of imported construction materials.
With Jordanian expertise from its new investor, the company is confident that it will make its WiMAX implementation work effectively. Its buying its equipment from Chinese vendor Huawei and it will operate it initially in the 3.5 ghz spectrum and later it hopes in 2.5 ghz. The company made the point that WiMAX base stations are very spectrum-intensive and that therefore they need to be able to use the higher capacities. GSM companies are already using an E1 to some base stations (particularly those used for data) and that it was only fair that it had similar access to transmission capacity.
It plans to build its own microwave network for backhaul transmission. It has been forced to consider building its own network because of the very high transmission prices offered by the existing network operators, Canar and Sudatel. But as CEO Ahmad Jaghoub told us: “We’re willing to co-operate with others to improve penetration.”
It has had the same challenge in getting reasonably priced international bandwidth. According to Jagoub, one company has taken three months to respond to its request and it still has had no reply:”The prices we’ve been offered are high compared to other countries. If need be, we’re willing to make our own gateway and build a fibre optic route to Port Sudan. It’s feasible to do it ourselves.”
The data services will be targeted at corporate and residential clients, the latter being focused on Bahri, Omdurman and Khartoum. The 50 base stations installed will give sufficient capacity for 100,000 subscribers. It is has a target of 15,000 subscribers for its first year of operation, rising to 50-60,000 in the second year. The service will be priced competitively against existing market offers.
Jet Net is keen to see the development of Sudanese content and wants to encourage people to build forums and create content that is focused on Sudan. It is trying to find ways of encourage uptake and as part of this it will give some CPEs to the education sector. As Jaghoub tells it:”We want to change the type of Internet that’s available in Sudan and have content for specific sectors like schools, universities and hospitals.” It wants to be able to offer an effective service to its growing list of bank customers and in time support call centre services.
The investors in Jet Net are already looking for opportunities further afield from Sudan, including Ethiopia and Uganda. However, these will depend on licensing opportunities and for the moment, the team is highly focused on making the Sudan operation a success.