Delivering on the vision

September 5, 2012

Comm.

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Qatar National Broadband Network (Qnbn) is a private company owned by the government of Qatar and charged with the responsibility to roll out passive fibre infrastructure across the country. Given the Qatar’s ambitious digital plans, which are summarised under the Qatar ICT Strategy 2015 and further articulated through the Qatar National Vision 2030, Qnbn is playing a critical and pioneering role with respect to public-private partnership ICT infrastructure investments in the Gulf.

“Qnbn is a catalyst for competition,” said the company’s CEO, Mohammed Al Mannai in an interview with Comm. “I believe what we are trying to achieve is a first in the Gulf region in so far as the costly part of the deployment of passive fibre infrastructure is being absorbed by the government,” he added.

Established last year, Qnbn’s mandate is to roll out passive fibre infrastructure across Qatar, and in so doing, place the company in a position to offer wholesale fibre backbone connections and capacity to licensed operators, hastening the uptake of broadband services. It is forecast that such uptake will cascade all the way down to consumers being offered a much improved and powerful fibre optic broadband service to empower their lives.

Earlier this year the company received a 25 year licence to provide Qatar with fibre optic broadband throughout the country, having been officially endorsed as the fibre optic broadband infrastructure provider for the country.

Qnbn’s directive is in line with the Qatari government’s vision to become one of the most well-connected countries on Earth with respect to broadband; ambitions that are detailed in the Qatar ICT Strategy 2015 and the Qatar National Vision 2030. The aim for 2015 is to see Qatar benefitting from information and communications technology (ICT) solutions in key aspects of its society and economy. Articulated in 2010, Qatar’s five-year plan ending 2015 contains the following measurable goals:

· Double the ICT sector’s contribution to GDP (US$3 billion)

· Double the ICT workforce (40,000)

· Achieve ubiquitous high-speed broadband access for households and businesses (95 per cent)

· Achieve mass ICT and Internet adoption by all segments of society (90 per cent)

· Achieve wide accessibility and effectiveness of all key government services (160 online services)

Qatar Vision 2030’s four guiding principles for a sustainable economy and growth path for Qatar focus on human, social, economic and environment development. Providing the high-speed communications and increased fibre capacity Qatar requires to achieve its ambitions is central to Qnbn’s mission, which the company is diligently going about trying to achieve.

The passive fibre network that has so far been completed by Qnbn consists of 6,000 connections, with Al Mannai forecasting that licensed network operators (Qtel and Vodafone Qatar for the meantime) shall commence installing their equipment imminently with testing commencing and services set to go live in the short-term.

As part of the involvement with Qatar’s licensed operators, in April Qnbn announced it had signed an Infrastructure Access Agreement (IAA) with Qtel, building on the relationship and cooperation established between the two companies with a heads of agreement signed in July 2011. The agreement last year represented the first step to defining a framework through which both parties could work together to support the government’s goal of accelerating implementation of high-speed broadband services for households, businesses and government agencies.

Under the deal signed in April, Qtel will supply Qnbn with duct network access and access to other passive telecommunications infrastructure over the next 20 years. Such an arrangement is set to help reduce civil infrastructure costs on the part of Qnbn.

In May 2012 Qnbn went on to announce it had signed an interim wholesale agreement with Vodafone, the first such wholesale agreement to enable a licensed telecom operators to use Qnbn’s network to deliver telecom services to customers.

The signing represented a milestone in the relationship begun between Qnbn and Vodafone in 2011 with the signing of a heads of agreement similar to the one Qnbn inked with Qtel.

Under the interim wholesale agreement reached with Vodafone, the cellco will initially provide broadband services to residential and business customers in Barwa City and Barwa Commercial Avenue.

“By 2015 we should cover 95 per cent of the households in Qatar and 100 per cent of the business establishments in Doha,” Al Mannai said. “In numbers, this will account for approximately 260,000 connections by 2015,” he added.

The fibre network’s specifications have been tested to meet customers’ expectations as well as to ensure interoperability with legacy systems and Al Mannai is confident the wholesale model being instituted by Qnbn will prove compelling to the licensed service providers it sells connections to currently as well as in the future.

“Our role at Qnbn is to wholesale connections to the service providers, so to offer capacity or bandwidth,” Al Mannai explained. “The wholesale agreement we plan to put in place is under review, as is the costing calculation, though we are clear that we shall charge licensed operators per connection.”

Qnbn will thus be offering licensed operators open access to a backbone network without discrimination of any one party, and agreement terms will be uniform across the board.

Al Mannai went on to explain that while Qnbn has begun its life being owned by the government, over time this is likely to change as private investors become involved in the project.

“Passive infrastructure is not the part of networks that typical investors would be attracted to invest in because the return on investment is not that high,” Al Mannai acknowledged. “One of the government’s goals is to have affordable broadband services available in the country, and it is willing to bear the initial costs to achieve this. So while the government has and will contribute funds to the entity, existing telcos are likely to also become shareholders in due course.”

Al Mannai did not want to be drawn on the capex estimation for the first phase of the infrastructure investment to end-2015, though published reports in the media have suggested it may rise as high as US$500 million.

“The costs may vary quite widely,” Al Mannai said. “Depending on whether we are rolling out infrastructure to brownfield or greenfield areas, costs could vary by as much as 80 per cent. So we have an estimate, but it’s not an exact figure, though from the start we are looking to minimise costs as much as possible by using any existing infrastructure that exists in-country,” he added

The secretary general of Qatar’s Supreme Council of Information and Communication Technology (ictQatar), Hessa Al Jaber has been one of the driving forces behind the expansion and development of Qatar’s digital credentials, and she remains a staunch supporter of Qnbn as a conduit for the country to catalyse digital development.

Currently Qatar has among the highest broadband penetrations in the world, however, it lags significantly behind leading nations in terms of speed, with current maximum speeds of only 8 Mbit/s. And while the penetration rate is high with 70 per cent of homes having broadband at the end of 2011, Qatar’s population is expected to double over the next five years, meaning more lines of connection will be needed.

Current data from ictQatar estimates there are 186,000 broadband lines in the country, with nearly 400,000 expected to be necessary by 2020. Qnbn aims to have 439,000 broadband lines by 2025, covering households, government entities and enterprises.

“As a relatively small market, relying solely on attracting private investment to build an expensive fibre network infrastructure would limit progress, delay advancements in important sectors and likely stall some already planned, forward looking projects,” Al Jaber said. “This government-led national broadband network effort will ensure progress and keep our commitment to bringing connectivity to every corner of Qatar, including the most remote areas,” she added.

For his part, Al Mannai believes the overriding factor driving broadband demand and uptake in Qatar is the basic desire for connectivity, and Qnbn is determined to help drive the Small Office Home Office segment of the market in particular.

“To be frank, both the traditional business as well as the traditional home segment is driving broadband demand significantly in Qatar,” Al Mannai said. “A high percentage of copper based broadband coverage exists but customers are keen to have this migrated to fibre, and I believe much of the demand coming between now and 2015 shall be from this market segment,” he added.

As further evidence of Qatar’s focus on improving its ICT credentials, in May Ericsson and ictQatar announced the launch of a strategic partnership that aims to boost the adoption of ICT in Qatar. The partnership, which was formalised through a memorandum of understanding, seeks to support Qatar’s ICT Strategy 2015.

The MoU was signed by Hassan Al Sayed, ictQatar assistant secretary general, IT and ICT Government Sector and Ray Hassan, president Ericsson Gulf Countries.

As part of the partnership, Ericsson and ictQatar will collaborate in a number of areas including “Technology for Good” which covers initiatives such as sustainability through ICT solutions and also aims to use ICT to unlock the potential of the e-Economy such as e-Education and e-Government in Qatar and the region. Other areas of collaboration include revamping the ICT infrastructure, and enabling platforms to support consumer driven Arabic content development, and improving the quality and efficiency of ICT services.

In addition, Ericsson and ictQatar will focus on ICT maturity in order to create a knowledge-exchange based environment to increase the ICT usage in Qatar while leveraging Ericsson’s global and local competence in the ICT industry.

All said, Qatar is a bristling ICT and broadband market to witness, and the success of policies instituted in the coming 20 years are likely to be tied directly to the success of dedicated entities such as Qnbn.