INTERVIEW: Broadband building in Qatar
September 4, 2012
While most people are accustomed to seeing multiple operators deploy separate mobile networks, the same model of overlapping infrastructure does not stand up for country-wide fibre-optic networks, which are far more expensive and disruptive to deploy.
For this reason, a growing number of countries are assessing the merits of national broadband networks, with a number of operators sharing capacity on a single, separately-owned fibre optic network.
It’s a model that has been embraced in markets as diverse as Singapore and Australia, while in the Middle East, Qatar is so far the only country to start implementing a national broadband network. But for Mohamad Al-Mannai, CEO, of Qatar National Broadband Network, better known as Qnbn, the policy is really a no-brainer, particularly in a country the size of Qatar.
Indeed, Al-Mannai explains how Qnbn, which last month received a 25-year licence to provide Qatar with fibre optic broadband across the country, came into being as a result of a desire for a common-sense approach from various stake holders in the industry.
“A few years ago, the regulator, ictQatar was trying to set up a broadband strategy for the nation in order to go forward, and after seeing the different models around the world, they decided to go follow the national broadband network and explore the possibility of that.”
The regulator then formed a small committee that included its own representatives and the operators, namely Qtel and Vodafone Qatar, to see how the model might be best implemented.
“The conclusion of this working group was to establish a company to be funded by government and only be focused on the wholesale sector and only provide the infrastructure layer of the telecommunication. That means only passive elements, not active elements. Operators will provide all the electronics, customer premises equipment and so on,” Al-Mannai says.
Following this, Qnbn, which is currently 100% owned by the government, was established and developed a “road map” for the creation of the national broadband network.
“In order to make sure of the technical specification and the interoperability with the operator, we built a roadmap for ourselves. That started with building a detailed specification of what QNBN will be building, verifying it with operators,” Al-Mannai says.
Following this, Qnbn went into a “pilot phase” where it built a network in one of Qatar’s green field areas allowing it to verify the specifications and also to make the appropriate tests and procedures for the broader, country-wide network. “That has been completed in terms of network build for the pilot, and the operators are now setting up their equipment to connect to our network,” Al-Mannai says. “We expect it to be operational sometime in September.”
“Apart from that, for the network roll out we are finalising a group of contracts with vendors to take parts and start building the network. Our target is very aggressive so most probably more than one vendor will be supporting us in building the network.
“Additionally we have started work on the backbone to interconnect all of our sites in the future. This includes the backbone in the outer areas so that we can link the city easily, or the remote areas easily later on.”
But a significant amount of the necessary infrastructure is aleady in the ground, and is owned by Qatar’s incumbent operator, Qtel. To avoid duplication, Qnbn and Qtel in May signed a deal to develop high speed communications in Qatar. Under the agreement, Qtel will supply Qnbn with duct network access and access to other passive telecommunications infrastructure over the next 20 years.
“The plan is to utilise, as much as possible, existing structure so we can save time, rather than dig up the roads and doing all the civil work,” Al-Mannai says.
Qnbn will connect 30,000 homes by the end of 2012 and some 300,000 by 2015, and the network is due to be completed in 2015, according to Al- Mannai.
The CEO confirms that the network will eventually consist of 6000 km of routes, with fibre running to the office and home. “The consumer will be able to select single services from different operators or bundles from a single operator,” he says. In this respect, the business model is simple: Qnbn will provide four or five different services for the providers. “To enable the operators to come and interconnect with us we host their equipment within the office of QNBN,” Al-Mannai says.
“We will be charging them a monthly rental disconnection for the households and also there will be different products, for example, for enterprise. Moreover, we will offer point-to-point products, and we also will also have backbone products to interconnect network elements if they need it, such as mobile sites, switches, and international connectivity.”
In terms of the potential savings that the operators stand to make by adopting the national broadband network as oppose to building and running their own networks, it is easy to see why Al-Mannai refers to the project as a “no brainer”.
“If you look at the economics of a wireline, the part that we are building will see a passive infrastructure that consumes the cost of at least 60-80% of the service cost, so we will be taking away from the operators that amount of capex and helping them to keep that capex in more innovative services. But overall if you imagine that each operator built his own network, I would say we can minimise it to less than 50% of the investment.
While Qnbn is currently 100%-owned by the government, the operators will have the chance to buy equity in the company. A structure is still being decided on, according to Al-Mannai.
In the coming months, Al-Mannai says that one of the main challenges will be managing the stakeholders and making them aware of what Qnbn is doing. “The nature of the business we are doing is new to the region. People are used to the normal telecom operator incumbent or telco company, so to make them understand what we do exactly, specifically in our technical terms, becomes very difficult,” he says. “All the development needs to be coordinated and get approvals.”
Other countries, other models
The various countries that have adopted national broadband networks have each taken slightly different approaches in terms of the structure and business model. For example Al-Mannai points out that in Singapore, the broadband network consists of two companies; one that is similar to Qnbn and looks after the passive infrastructure and another company that looks after the active network elements. The operators look after the services aspect.
Meanwhile, in Australia, the government has established one company that will provide the infrastructure and the network.
“In Sweden, they have left it to the municipal areas with each municipality building its own fibre network,” Al Mannai says.
Qatar’s network has also garnered interest in the region and delegates from Oman have already expressed an interest in the network, according to Al-Mannai.