Tackling Market Access

Posted on 1st December 2009

Interview with Zeina Mokaddem, director of Access Partnership’s Abu Dhabi Office.
Article appeared in December 2009 Edition of Satellite Evolution.

The issue of regulation is hugely important for the provision of satellite services in any region of the world. The regulators make the rules in terms of market access to any given country. In some cases, the regulations that new entrants need to meet are complex, licenses can be expensive and no region is the same as the next. Helen Jameson spoke to Zeina Mokaddem, Director of Market Access in the Middle East region for Access Partnership, and discussed the challenges, the recent Global Symposium for Regulators, the economic crisis and the future of regulation in the EMEA region.

Question: Would you please introduce yourself and Access Partnership to our Readers?

Zeina Mokaddem: Access Partnership is a telecommunications regulatory consultancy specialised in assisting clients in gaining access to new markets, obtaining valuable spectrum, and rolling out new technologies and services to existing or new markets. We serve our clients through three main offices; the London head office, the Washington office, and the recently opened Abu Dhabi office. I am running the Abu Dhabi practice that covers the Middle East region.

Question: You have just returned from the Global Symposium for Regulators, held in Beirut. What were the main topics on the agenda?

Zeina Mokaddem: The ITU’s 9 th Global Symposium for Regulators (GSR) ended Thursday the 12th of November in Beirut. This year’s theme focused on the regulatory challenges of convergence and what steps regulators need to take in order to overcome them. The impact of the financial crisis was also discussed and the industry raised few suggestions on ways to help stimulate economic growth again. Broadband, mobile termination and VoIP were discussed at length. In the last two years a Global Industry Leaders Forum has been preceding the GSR in order to give the industry an opportunity to meet and agree the key regulatory issues to bring to the attention of the regulators during the GSR. I believe this to be a useful ITU initiative allowing a more concrete interaction between the different telecom players.

Question: What are the main challenges that face new market entrants in the EMEA region?

Zeina Mokaddem: First, I’d like to say that the Middle Eastern markets for telecommunications are not what they were even five years ago. As in any other region, new market entrants face some challenges, and the Middle East is no exception. These vary from one country to the other but the most common ones relate to legal and regulatory requirements, high entry costs and national initiatives that sometimes need to be nurtured before they can be exposed to total competition. While more and more countries in the region are adopting a more liberalised approach to market access, some countries still impose limitations on foreign ownership, or request local representation from foreign companies wishing to provide services in their country. Other barriers to entry are evident in some countries’ security requirements, but even these are dissipating as governments become more familiar with network architectures and new technologies. There has been a steep learning curve, but regulators in the region have just about caught up.

Lack of competition presents a consistent obstacle to entry in some Middle Eastern markets. Incumbent operators are mostly government-owned, and national telecom assets are tightly protected. Little incentive is given for foreign companies to enter the national market. This is unlikely to change until full competition is achieved, but this is coming in every market at various speeds.

Question: How has the current economic crisis affected regulation in the region?

Zeina Mokaddem: Compared to other sectors in the region, I believe the telecoms sector has been less affected by the economic downturn than for example the banking and the construction industries. Perhaps there are less speculative ventures, but for the most part investment in infrastructure has continued. That said, some regulators were nonetheless indirectly affected by the crisis. Jordan postponed the award of a 3G licence until August this year for lack of interest by the industry. But then, Iraq is planning to license a fourth GSM operator, so again, there are variations across the region.

The past year has seen some regulators looking into ways to stimulate economic growth through regulatory reform and liberalisation. While not necessarily directly aimed at dealing with the economic crisis, some recent initiatives in the region will no doubt lead to attracting more foreign investment in the near future. Qatar has launched a VSAT licence award process aimed at gradually liberalising the VSAT market to allow international VSAT connectivity, currently limited to the incumbent Qtel and its re-seller Rignet. Calls for national broadband policies and infrastructure sharing by the operators are also expected to play a catalytic effect in the overall economic recovery of the region.

Question: Has the situation regarding regulation in Africa improved? Is the regulatory process becoming more transparent and allowing greater use of satellite communications?

Zeina Mokaddem: The satellite market in sub-Saharan Africa remains as varied as the continent itself. While some administrations increasingly provide a transparent and efficient licensing process, others continue to create high barriers to entry through both high costs and large volumes of bureaucratic red tape.

What is certainly true – and will be beneficial in the medium term – is that regulators are beginning to coordinate more on a sub-regional level. This has led to greater harmonisation and efficiency in the regulation of mobile networks, for example. The effect of the sub-regional approach taken by areas such as the East African Community has not yet been fully felt in the licensing of satellite networks, but this process has started. Within the EAC, the licensing process tends to be one of the more transparent in the sub-Saharan Africa region.

Question: When dealing with clients who wish to gain access to the Middle East, what do you find are the specific hurdles with regard to regulation?

Zeina Mokaddem: Harmonisation is the first hurdle that comes to mind. While this may not be a Middle East-specific problem, I find that achieving harmonisation in the Middle East is more challenging than elsewhere in the world.You could always resort to the ECC or the EC in Europe for a more harmonised approach over Europe.There is no such body in the Middle East.The GCC Telecom Bureau does a good job in regulating issues of interest to the Gulf but this is not necessarily conveyed to the rest of the Arab States. We can say the same about AREGNET where, despite the efforts of some forward-thinking regulators, finding common grounds is not a straightforward job. On a positive note, several Middle Eastern countries are currently adopting international best practices, and this tends to lead others to do the same.

Question: There have, over the past few months, been well-publicised problems in terms of international co-ordination on orbital slots. As the skies become more crowded, do you see this problem becoming greater and how do you feel it should be addressed?

Zeina Mokaddem: The orbital arc is becoming increasingly congested. It is rare that orbital positions are returned to the international community to be re-used, so it is likely that this problem will remain, especially as more countries decide to launch their own satellites for national coverage. Right now there are two good initiatives underway that aim to mitigate the risks of orbital congestion. One is the ongoing effort of the ITU-R which, among other things, works to suggest ways of reducing the number of filings that create orbital congestion, the so-called ‘paper filing’ phenomenon. The second is the work that seems to be gaining ground within the ITU’s BR and which deserves the industry’s support, namely, the workshops that are addressing some of the mechanisms by which the ITU can be allowed to judge whether a slot has in fact been brought into use or not. The question of when and if an orbital position has been ‘brought into use’ is not always a straightforward one. This effort more than any other I can think of has the chance of yielding some improvements to issues of orbital congestion.

Question: There are many new players entering the Central and Eastern European markets, especially to deliver Pay TV services. This is becoming increasingly popular. Is it easier to gain market access in this region of the world?

Zeina Mokaddem: Is market access in Eastern Europe easy? Yes, relative to some markets. No, if you count markets like Russia and Ukraine. In general, market access is never very easy, since each country retains its own regulations on such matters, and since these regulations vary greatly from country to country. The legislation of the European Union – such as the Television Without Frontiers Directive – has gone far in harmonising the way in which countries address broadcast TV services. But Pay TV is not just a service that can be delivered over terrestrial broadcast or broadcast satellite platforms. It is now being trailed in various markets over terrestrial mobile networks. Such TV services are already more or less permitted under a 3G licence, so access for them is easy enough. The real market access issue with television is always the content. For voice services, governments don’t ask what sort of content is being carried– nor should they, of course. For TV, which is a powerful social tool, the content issues are much more contentious, and so make market access more difficult to navigate.

Question: What do you feel are the main issues that must be tackled over the coming year with respect to regulation and market access in the EMEA region?

Zeina Mokaddem: In the context of satellites, Middle Eastern regulators are going to need to work to allow more competition in the VSAT markets. This is a growth area for the region – VSATs on vessels, on planes, on oil rigs, on vehicles, VSATs as they are used for mobile banking, cellular backhaul, and even connecting WiMAX hotspots – and in some markets there are still just a few licensees. So there is pressure to change that. A few other interesting topics are coming up that will need the regulators’ attention. Ever-increasing demand means more capacity requirements by the operators. So more spectrum is going to need to be made available for satellite services.

This is true for fixed and mobile satellite networks, since this region, with its sparse and occasionally mobile populations, is a significant consumer of satellite services of all kinds – a trend that most observers, myself included, think will continue. Nobody doubts that there is also going to be major growth in terrestrial mobile market. But that leads to a commensurate growth in demand for satellite services, for backhaul and for filling in (and overlaying) the broadband networks.

Once people have got the taste for broadband, it will be very hard for regulators to make it more expensive in one part of a country just because it is served only by satellite. The regulatory costs of providing satellite services will have to come down. And that’s the regulator’s task…

For further information please contact Zeina Mokaddem at zeina.mokaddem@accesspartnership.com

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