Nayla Khawam is a France Telecom veteran whose eye for detail will likely see her focussiong her efforts on the further improvement of the overall Orange experience

Differentiation is a challenging thing to achieve in a market as congested as Jordan’s telecoms landscape, what with its scores of operating licences ranging from GSM to WiMAX and alternative data providers. Thus, the award of the country’s first 3Glicence to Jordan Telecom Group (JTG) in August, with its hugely beneficial exclusivity clause, marks Nayla Khawam’s first significant opportunity to offer a service that is clearly different to what is already on the market, and thereby help create a certain level of additional brand loyalty.

JTG agreed to pay JD 50 million (US$70 million) for the concession, in a process to award spectrum that has dragged on for close to three years. The telco expects to spend a similar amount in the first instance rolling out the network to potentially high data usage centres around the country.

“JD 50 million is a package deal price,” Khawam explained to Comm. “So we pay this amount but receive concessions, which is what we had always asked for. Notably on the frequency and evacuation fees and we are hoping not to pay revenue share on Internet applications. This is a good thing for us as well as the country as it promotes Internet penetration in Jordan,” she added.

JTG has been given a 12-month exclusivity period commencing on the date of commercial launch, with this date having to be a maximum six months after the telco submitted its bid. As this was done mid-August, the expectation is that JTG will look to commercialise service by the middle of February 2010.

No bid bond was instituted, which is typically linked to the requirement to meet a launch date, though a real commercial penalty may exist should JTG not meet its February launch schedule. The exclusivity period is set to commence counting down from the middle of February 2010 irregardless of whether the operator launches or not. That is to say, should it launch later, it would face a shorter period of exclusivity in which to establish its 3Gofferings.

France Telecom has launched as many 35 3Gnetworks over the years, and falling under this banner offers JTG a real advantage with respect to optimising the network it deploys, what services to offer, and how to bring them to market.

“It is very important to be exclusive, and to be frank we believed it was a crucial element in our decision to bid for the licence,” Khawam stated. “We think the way other technologies such as WiMAX have been launched in this region may not necessarily be the right way. Having multiple potential players licensed at the same time is too many, and their various offers could lead to confusion amongst customers.”

The fact that certain WiMAX operators have been describing their networks as ‘4G’ is a matter that niggles at JTG management given their preference to manage expectations of the performance of various transport technologies.

“Exclusivity is important because it gives us time to show what we can really do with 3G,” asserted Khawam. “My real focus as the new CEO is an emphasis on quality across all our products and services. Now is the time to reinforce the transformation/integration process, and differentiate ourselves through quality,” she added.

Khawam is well equipped to drive quality to the core of JTG’s efforts given the senior positions she has held working for France Telecom in France. Her last position prior to leaving JTG’s parent company was area director of the Paris region, a position which placed her in charge of commercial and technical departments for mass market and business clients.

Khawam has also had experience in planning networks and customer service, meaning she has a good understanding of the provision of quality across the entire end-user experience.

“Khawam has a stated goal to make Orange Jordan the operator of reference and she really wants someone to refer to Orange when he thinks about an operator that serves its clients well,” commented Philippe Vogeleer, chief strategy officer of JTG. “We need to use the segmentation we have to know our customers better, to look at each of the elements that make an Orange experience an important experience and consider these experiences altogether as opposed to separately as we used to do,” he added.

Thus Khawam is looking to align the entire customer journey, which is still follows a product-by-product approach at JTG at this point in time. “She’s bringing a wealth of quality experience, and is very strongly focussed on the total customer experience,” Vogeleer said.

“We are a company that serves every consumer in Jordan and we don’t really make any distinctions. We don’t have a snobbish touch or a blue collar touch. We serve everyone, but that does not mean we are perfect. We need to find the packages that will talk to people,” Vogeleer added.

Khawam takes over JTG when the telco is very definitely enjoying a period of ascendancy. In 2008 it recorded revenues of JD 401 million, the highest in the company’s history, and profit of more than JD 100 million, again marking an all time high. Maintaining this positive momentum will be an obvious challenge for Khawam, and JTG appears willing to continue innovating its business model in order to do so.

About two years ago Friendi Mobile and i2 were awarded licences to offer MVNO services in Jordan. However, it quickly became evident that none of the three GSM incumbents were looking to engage in detailed negotiations with either of the MVNO licensees for the meantime. While a collusive hint might have initially existed in the network operators’ refusal to enter serious discussions with the MVNO licensees, Telecommunications Regulatory Commission (TRC) guidelines requiring the network operators to treat every potential MVNO partner equally, did not help the plight of the virtual parties.

JTG’s position on the matter, however, appears to be softening. The telco has always stated that it would be in support of MVNOs provided such a partners are able to demonstrate that they have a strategy to help the network operator perform better in a market segment that it may not be doing as well as it would like to.

According to Vogeleer there is an MVNO that has been able to make such a case for itself and JTG is in advanced discussions with it as JTG’s management believes the prospective MVNO has something to offer. Vogeleer is of the opinion that these people have a story to tell and he can see they have done their homework, as has JTG with respect to the sectors it is servicing well and the ones it could do with some improvement.

“Some MVNOs have launched services in the region, and a great deal of experience has been learnt from it, allowing mobile operators like us to see in a concrete way the benefits of tying up with an MVNO,” Vogeleer revealed. “We saw one MVNO entering an agreement that targeted Indians in Oman and the MVNO was successful because it had the correct distribution method, establishing a call centre that speaks Hindi and not English,” Vogeleer said. “Frankly we don’t have time to develop these things in-house and there is potential for these niches.”

JTG has been in the process of transforming from a state-run operator into a commercially responsive telecom provider in a highly competitive market

While Vogeleer is negotiating with the prospective MVNO under a non-disclosure agreement and is thus unable to reveal the party in question or the nature of their negotiations, a simple process of elimination points to Friendi Group, the MVNO that in July announced the launch of a programme called Reach Out, which was the first building block in the player’s strategy to provide Friendi Mobile customers in Oman and those out of the country with competitive mobile international call rates.

The first phase of the Reach Out programme was the launch of a partnership between Friendi Group and Idea Cellular of India. Friendi Mobile customers in Oman are able to call Idea subscribers in Kerala at rate as low as 139 Bz (US$0.36) per minute, the lowest international mobile call rate from any mobile provider in Oman to India. Idea subscribers in Kerala will also benefit from a reduced rate when calling Friendi Mobile customers in Oman, with all calls charged at INR9.19 (US$0.19) per minute.

“Deep knowledge of expat populations is something that the MVNO might be able to help us with,” Vogeleer acknowledged.

“All the parties involved know that the idea of dealing with one MVNO opening us up to having to deal with many is not acceptable. I don’t know yet how this will be resolved. The ball is as much in the TRC’s court as ours. If the regulator wants more competition it is for them to give us guarantees about the way in which we are able to work with MVNOs and not have these conditions imposed upon us,” Vogeleer said.

Looking beyond Jordan’s borders, under Khawam JTG will continue to have an appetite for regional investment, but will maintain the same pragmatic approach to such activities as it has done in the past. Under Ghossein and Laurent Mialet before him, Jordan Telecom, with France Telecom’s blessing mapped out the Middle East as its investment interest area, though over the last three years little significant activity has come of it.

JTG owns a stake in Bahraini alternative data provider Lightspeed Communications and has a similar investment in Lebanon, having made no meaty investments in the region.

“The Lightspeed acquisition was good way for us to learn how to invest in the Gulf .We did the same in Lebanon, through a support agreement with Sodetel, a local telecom operator, and in Bahrain in particular we have faced significant hurdles,” conceded Khawam. “We have learnt that some markets are not always liberalised, even the ones that claim to be. So we are looking at potential partners to merge with in Bahrain as we believe in the future we will see a more limited number of operators in that market with larger size,” she added.

And just because JTG has not made a sizeable investment in the region does not mean the telco is not interested. It reviews three or four opportunities seriously every year, with the operator remaining the Middle East hub for France Telecom. Thus management at the Jordanian operator would like to think it is pragmatism that has prevented it from participating in the region’s M&A activity rather than a lack of will.

“In the last two years JTG has studied the business case for two incumbents. We also considered greenfield licence bids in Bahrain and Kuwait, but at the prices that were being offered decided not to participate further in them,” Khawam said.

She continues to relish the opportunity.

Ahmad Sindi would like to offer Saudi subscribers a range of offers and a quality of service they have not experienced elsewhere

The daunting prospect of a new entrant making inroads against a well-entrenched incumbent does not come much larger than Etihad Atheeb Telecom’s entrance into Saudi Arabia’s fixed line market, where the company faced the attention of the Middle East’s largest telco, STC.

Etihad Atheeb, which launched a nomadic WiMAX broadband service in the middle of June under the brand name Go, immediately scored a mini victory by becoming the first of three recently licensed operators permitted to operate fixed line services in the kingdom. In March 2008 Go awarded Motorola a US$165 million WiMAX 802.16e infrastructure contract, enabling the service provider to make quick progress on its journey to offer unique broadband services in the kingdom

However, any gains from being the only new entrant for the meantime are quickly checked given STC’s activities in recent months, which are clearly aimed at interrupting the new entrant’s early progress.

“STC offered discounts on its broadband services amounting to between 70 – 94 per cent when Go launched, recalls Ahmad Sandi, the new entrant’s CEO. “The incumbent continues in an amazing manner to use its size and dominant position in a manner that hurts competition,” he adds. One such tactic of anti-competitive behaviour that Sindi levels against the incumbent is its adoption of promotion schemes that squeeze prices, or the bundling of unrelated services in a way that only the incumbent can.

“The incumbent operator has to be prevented from anti-competitive behaviour, which is a reprehensible tactic worldwide, and includes the bundling of unrelated services such as mobile voice, fixed voice and data under one service. Clearly one service subsidises another,” Sindi suggests.

Despite these challenges, Sindi is upbeat about his company’s offering, technology choice, and aggressive rollout schedule. At launch the service was available in Jeddah and Riyadh, and within a few short weeks had extended to four Saudi provinces. Placing this achievement in perspective, Go’s minimum roll out requirements as sanctioned by the kingdom’s regulator, the CITC, was to offer coverage in at least three provinces within three years.

The operator has gone on to approve additional network investment amounting to more than SAR275 million (US$73 million) for the second phase of WiMAX expansion of the network, which is set to widen coverage to the eastern region of the country by the second half of January 2010 at the latest.

“A third phase of WiMAX expansion is on the drawing boards,” Sindi says, reiterating that it is the company’s ambition to offer dense WiMAX coverage wherever the provider operates. “WiMAX for us is not a so-called a gap-filler. When we say we have launched in cities that does not mean we have placed five or six base stations. Our approach is basically to carpet the city, offering end-to-end service with seamless WiMAX coverage.”

Sindi explains that Go is looking to institute a consistent service across its entire network, leveraging WiMAX technology’s nomadic features. “Our added value to the market is our consistent, nomadic coverage,” Sindi asserts simply.

Go is actively pursing the residential and small and medium size business (SMB) sector, with Sindi believing large enterprises can have any nomadic requirements served by his company’s network, as well as any back-up needs. This is Go’s strategy for the time-being though Sindi does point out that there are capital expansion plans on the drawing board to address other critical segments of the market.

An issue often sited as a potential obstacle to the widespread uptake of WiMAX in a residential context is the prohibitively high price of customer premises equipment (CPE). Go and Sindi do not think CPE costs are a limiting factor, and he is banking on a substantial price erosion of units by virtue of the sheer number of WiMAX operators that are launching services around the world.

“We also subsidise the modem so we basically shelter the customer from the full impact of the price,” Sindi reveals “We have launched services at a time when there is a substantial demand for WiMAX CPEs worldwide. So this year has seen a very decent pick up of orders for the OEM suppliers in Europe, North America and Africa. And we have started to see a backlog of dongle suppliers in the Far East.”

Go offers a three-day money back guarantee, with no questions asked, and Sindi believes that it is this sort of customer service that will set the operator apart from its competitors

Sindi believes these are excellent signs that further price erosion will take place as far as the cost of WiMAX dongles and CPEs are concerned. “So the trend is positive, though we would like to see it occurring faster than it is right now.”

While much of Go’s market entry strategy has been set on the offer of high speed, nomadic, broadband data services, Sindi describes his company as having a secret weapon, which is VoIP. He reveals that the market is soon to be hit with a service where for the same line that gives an end-user data, that subscriber will also empowered to complete voice calls. “We already have 1 million lines within a special numbering range that will allow users to call the whole world and receive calls from the whole world,” Sindi explains.

“I am also pleased to say I have already signed an interconnection agreement with STC seven months ago. A couple of months ago I signed with Mobily and I shall soon do the same with Zain. Basically our interconnect agreements have been completed, which will be fantastic news for our customers.”

The CITC has already issued Go with numbers for a million lines, allowing a fixed line provider outside of STC to offer nomadic voice services for the first time in the kingdom. “This is a major breakthrough. Another is that CITC has issued a whole series of numbers to us for the 800 numbers. These have not been issued to the mobile operators because they are assigned as fixed service numbers. We are again the very first operator to be issued these numbers besides STC, which is a major development.”

While Sindi is enthusiastic about the prospects for voice communications for his company, he remains adamant that data will still be Go’s main business going forward simply because the market is far from saturation. Broadband penetration in Saudi Arabia currently stands at around six per cent. Of close to 10 million Internet users, Saudi counted around 1.8 million broadband users.