GSM Asia Pacific

Rasantha Hettithanthrige: As an operator in the Sri Lankan market, we’re at a critical juncture with regards to technology choice. You have an existing technology which is mature, which will bring in revenue. This is your shareholders prime requirement. Then you’re faced with the question, what will happen in the next 10 years. How sustainable is the current investment and how do you future-proof it. Shareholders want a return on investment, and they want a future-proof network. When we had the transition from analog to digital, we had to face a lot of logistical issues.

Today, I’m thankful to the vendor community that we have backward compatibility. The risk to the operator is much less. On the same note, I’d like to say that this transition is not without pains. There’s a lot of pain points, especially for an operator who’s invested already in GSM 2.5. If you have a 10 year depreciation and you’re 5 years in, if you want a new investment you have a lot of explaining to do to your shareholder community.

In my own experience, the experience is not that easy. From an operator point of view, the success of broadband, the key is the reach. You have to have the required reach. Anywhere, anytime, anyhow. I was reading an article about Vodafone. 60% of their revenue was coming from 10% of the cell sites. In WiMax you talk about hotspots. In mobile broadband as well, bulk of your traffic is coming from hotspots.

I can draw from an example. Ours is a company due to a wrong technology choice, found ourselves in a bad position. However, we are now in a challenger’s position. The rule is in telecoms, you can’t get stuck with obsolete technology.

Supun: In terms of a more mature operator coming into 3G space, we see 3G as a big opportunity. We don’t see a difference with investing in 3G to the first GSM network. We saw GSM as a good opportunity to capture a good share of the voice market. Today we have the voice penetration levelling off. Increasingly we see that there’ll be huge competition on voice, but there’s great opportunity on the broadband segment. This is not particular to Sri Lanka, it’s available in all the other markets. Another key philosophy we use in investment decisions is to break the chicken and egg cycle. We have invested first and then got the results. We come from the point of creating the markets, investing ahead of demand, and maximizing on opportunity.

With broadband unlike voice we have the problem of having the correct content. This region, consumers are less English literate. We need to ensure that a rural user can benefit.

Kavan: You’re crossing into a new market segment where they’re not willing to pay for anything. How do you get them to pay?

We need to facilitate through applications. One key application being a mobile operator is the access to location information. That’s one area a mobile operator can differentiate.

Kavan: Does the answer lie in portals?

Vinay: What has been seen on the portal is that 70% of traffic goes out of the wall garden. What is the business potential? The key is identifying the asset that drives that 70% and use that asset to generate advertising.

Kavan: Do you see Mobitel driving your customers through a portal?

Rasantha: The operators role is becoming a platform. Through that platform, we make it very convenient for consumers to access that. We need to strike a business case where we keep our revenue, and I think volumes are key to the game. We become the conduit and the platform and we add value for the consumer. Whatever situation they’re placed in, they have access to this content.

Kavan: What do you think of sachet broadband:

Yeow: Affordability towards the bottom of the pyramid is important. There are many ways for us to manuver. At the bottom, they need the connectivity when they really need it as a necessity. Not a monthly, you can break it down in a much more understandable one. One hour or two hours, to give them the opportunity to get connected. This involves much more than a single party.

Vinay: India is going through this journey of allocating 3G spectrum. Early studies indicate that voice in isolation is not the answer for the business case for 3G. The way 3G spectrum works is for data. Ericcson did run a trial called Gram Joti in Tamil Nadu where we did depict typical and relevant applications for a 3G environment. Tele-medicine, tele-education. Would there be a business case to have those applications? The point is that it’s the relevance of that service or application to the end user.

Supun: Unlike the mobile sachet, the broadband operator has to create. Shared access to broadband is important. Consumer on a lower end cannot invest in a PC. Shared access centers are very essential. Different charging models also need to be looked at.

Question from crowd: Is there any planned model to open up the HSPA network to the developer and content community.

Rasantha: This is something we are contemplating, and we are very close to the reality. Through a server, innovators can connect to our platform. That will be done through a registration process. A certain panel will approve such products and we will allow the inventor community to have access to our platforms. We will be launching this together with universities very soon.

Supun: For 3G applications we have a process where we allow people to register, and be screened.

Why? That process takes so long.

Supun: Vendor panel identification is a one-off thing. It’s mostly due to security and stability reasons. It has to be a win-win for both sides.

Vinay: This has been a debate for a long time. It’s all about executing step by step.