29 November 2002

Top Story

Chinese-American company UTStarcom has been steadily been promoting the use of its wireless mobile product on the PHS standard on the continent. In terms of cost to the user, it falls somewhere between GSM and fixed line but is cheaper to set up. This is no maverick standard as it is used extensively in China (10 million subscribers) and Japan and has 25 million subscribers worldwide. UTStarcom believes its experience in China is directly relevant to Africa. Russell Southwood talked last week to its Marketing and Business Development Manager (EMEA) Lorenzo Micheletti.


UTStarcom’s pitch is a beguiling one. It argues that 95% of potential mobile users in Africa only need local roaming capability and would buy a service if it was cheaper than the current GSM offerings. Based on its Chinese experience, it calculates that this market segment is 5-10 times bigger than the current mobile subscriber base.


So how does it work? In essence, it can be described as a "very long range cordless phone". Provided the user is close to a wireless relay receiver, the service will function. It uses the 1880-1915 Mhz frequency and micro-cell technology. It would enable telcos with fixed line infrastructure to add wireless subscribers much more cheaply than rolling out fixed line capacity. It can also operate as the bridged extension of a fixed line phone, offering the user the same number wherever they are (within the coverage area). Its primary market is within town, cities or regions rather than between towns, cities and regions. It is also ideal for users within a set of offices, buildings or warehouses: business, government, healthcare and education customers. In China it has also been used by businesses wanting to verify credit card transactions and for local payphones.


In technical terms, the service offers what UTStarcom claims is good voice quality and 64/128 kbps data access. The latter is fairly dazzling when compared to various mobile and fixed line offerings in most parts of Africa but much will depend on the state of local infrastructure. However it can only be used up to speeds of 40 km/hr: a disadvantage to those using cars but not necessarily a big disadvantage for others. Its mobile handsets are every bit as contemporary and light (70gm) as any other network and because the network does not have high power needs it can offer 800 hours of standby time on a single battery. As the standard is big in the Japanese market, it will be able to be a bridge to the 3G standard, offering both visual and music uploads and downloads in the not-too-distant future.


PHS effectively took over from the DECT standard that was developed by Lucent Technologies before it sold off the business as SR Telecom. This standard had 170,000 subscribers in Egypt and 80,000 in South Africa. It was also used in much smaller numbers elsewhere on the continent. Subsequently it has been overtaken by PHS usage. Initially UTStarcom was not interested in markets outside China but as the business has developed has begun to see the market potential in developing country markets like Africa.


It recently took four Nigerian states to China to see how it works. The Chinese Government is willing to offer loans at advantageous rates to develop the equipment. There are currently PHS trials taking place in Tanzania, Senegal and Mauritius. These are small-scale, "proof of concept" systems designed to show potential customers what can be achieved and the fast speed of deployment. Initial clients include healthcare organisations, education institutions and telcos. Micheletti is understandably wary about naming those involved but does say: "We have a big company using it for internal communications. It’s been a ‘toy’ technology so far but once people can see what it can do it will begin to grow".


So what of regulatory issues? Any new technology in Africa always suffers as the incumbents and the regulators catch up with what it might mean: "For indoor use, no licence is needed. It’s the same spectrum that’s used by cordless phones. As soon as you deploy in public, you are occupying public air spectrum. It uses 1880-1915 mhz and there are 200 channels in that frequency that don’t interfere with anything."


How have they reacted so far? "It’s not ideal for providing national coverage. It’s better for community communication at a local level. So we’re finding very little resistance. We’re just selling equipment and setting up the networks. We’re not planning to be an operator. The tough markets will be Nigeria, South Africa, Kenya and Senegal where the regulators have a strong grasp of frequency planning. Our argument is that we can use dynamic channel allocation to re-use frequency on adjacent calls. But it’s going to be a challenge but we hope the benefits will outstrip any local resistance."


"For the PTTs, it enables them to make better use of the limited capacity that they might have in the local loop. If they havn’t enouigh capacity to make a physical connection, we can offer one to one wireless connections that do everything a fixed line does without the line. It’s easy to deploy and its costs are half those of a fixed line."


It is working with two companies who will act as distributors: Dantech Digital (based in the UK and Nigeria), Africacom (based in the UK and Senegal) and Wintix (Paris-based to cover North Africa).