Eleanor who was the former Marketing director of WTM, an expert who was brought to the company by the authorities. She was confident in challenging Dhiraagu who completed a feasibility report about marketing Wataniya in the
It was not less than a week; she started to point her fingers on almost all the staff working in WTM, for not performing up to her marketing standard. She was hospitalized in one of the most luxurious apartments which can be found in town. (AAGE) which is the Bank of Ceylon.
Are you concerned about the rent? Don’t be silly; the company pays for the rent, food, travel, phone and attractive remuneration. She was really prepared to apply whatever she had learned from her experience in different parts of the world. Yet she forgot to study about the Maldivian’s and the culture.
The company provided her the budget to spend on marketing. She was much too smarter than the company ever thought. Her first priority was to design cartoons for each service which WTM introduces. Therefore she managed to sign up an agreement with “THINK” (WTM most unreliable marketing partner) to draw cartoons. She was brave enough to spend 1million on that. But what did the company earned in return? Just compare it to the Dhiraagu adds.
Take a few minutes to examine an advertisement of WTM in Majeedhee Magu, A man with a laptop on a yacht. If I am not wrong this is an advertisement we saw earlier with the Dhiraagu Logo, the same concept. So it can never be challenging I guess.
Eleanor is an outgoing person who likes to explore the beauty of
Where is Eleanor now? Why did she resign? Do you want to believe that she quit just because she didn’t like her job? Or was she forced?
Why can’t she be brought to justice? Where is the money she spent on resorts instead of marketing? Where is the phone she took from the company? Did she sign the clearance form? Was it evaluated? Was she penalized for the short notice?
Was Eleanor responsible for not preparing the marketing team? What about her targets? Was she given a target?
Well my colleagues, its time you all should stand up. Raise your voice, but you got to work as a team
Whatever the charges brought to a company may not resume the man power it is the ethics, which people have to follow in reaching destinations.
Of course it is not forbidden to seek help from the experts, nor doesn’t it mean degrading. But the most important point is to enforce the best sources on the experts.
But as a former wataniyan , I would say its nothing but the opposite of all the good.
WTM has become one of the most popular issues flying over the company who has tons of internal problems over the company. The HR manager is a “puppet” who is controlled by “yasser” Do you ever know??? “Yasser” is now the Interim CEO, Head of Sales, Director of HRM as writer whispers”
“PROFESSIONALS DO NOT FIGHT FOR RIGHTS” IS WHAT YASSER & JOHN SAID…..
-Insidewataniya writer-
1 comment:
TELECOMMUNICATIONS AUTHORITY OF MALDIVES
MOBILE BID SUBMISSION DOCUMENT
WATANIYA TELECOM MALDIVES
14 October 2004
Volume I
1.0 Executive Summary 5
2.0 Information Regarding the Bidder 9
2.1 Corporate Information Regarding the Bidder 9
2.2 Authorised Representative 9
2.2.1 Representative Details 9
2.2.2 Power of Attorney or Supporting Bylaws 10
2.3 Shareholder Information 11
2.4 Qualification Details 12
2.4.1 Telecommunications Operating Experience 12
2.4.2 Audited Financial Statements 13
2.4.3 History of Financing Activity 13
2.4.4 Regulatory Compliance 14
2.5 Bidder’s Experience 15
2.5.1 Operating Experience 15
2.5.2 Marketing Experience 15
2.5.3 Technical Experience 15
2.6 Financing Strategy 16
2.6.1 Sources of financing 16
2.6.2 Bidders Share Plan 17
2.6.3 Public Share Offering 17
2.7 Bidder’s Financial Capability 18
2.7.1 Bank Account Information 18
2.7.2 Shareholder Finances 18
3.0 Marketing Plan 19
3.1 Market Research and Analysis 19
3.1.1 Criteria and objectives 19
3.1.2 Resources utilised 20
3.1.3 Research results 21
3.1.4 International benchmarks 32
3.2 Market Forecast 34
3.2.1 Methods and assumptions 34
3.2.2 Subscriber forecast 37
3.2.3 Traffic forecast 38
3.3 Marketing Strategy 39
3.3.1 Products and services 39
3.3.2 Tariff and pricing plan 41
3.3.3 Branding, Advertising and Promotion 43
3.3.4 Distribution plan 43
3.4 Risks 45
4.0 Technical Plan 46
4.1 Digital Technology Standard Selected 46
4.2 Spectrum Requirements 47
4.2.1 Spectrum selection 47
4.2.2 RF carriers 47
4.2.3 Duplex mode(s) 47
4.3 Network and System Architecture 47
4.3.1 Network architecture 48
4.3.2 Mobile equipment 65
4.3.3 Quality of service 66
4.3.4 Network dimensioning 67
4.4 Network and Service Implementation and Development 67
4.4.1 Network and service implementation table 67
4.4.2 Coverage maps by coverage target dates (Maps are provided) 68
4.4.3 Calendar of activities 69
4.5 Coverage Plan 70
4.6 Interconnection Strategy 78
4.7 National Roaming 81
4.7 Site and Infrastructure Sharing 81
4.9 Confidentiality, Security and Other Measures 82
4.9.1 Confidentiality 82
4.9.2 Emergency services 83
4.9.3 Call tapping 83
4.9.4 Roaming services 84
4.9.5 Mobile number portability (MNP) 85
4.9.6 Directory services 86
4.9.7 Environmental protection 88
4.9.8 Health and Safety 89
4.10 Network Operation and Maintenance Strategy 89
4.11 Numbering Plan 94
4.12 Risks 94
5.0 Customer Care and Billing Strategy 95
5.1 Customer service functions 97
5.2 Billing and collections 101
6.0 Management and Organisational Structure 109
6.1 Organisation Chart 109
6.2 Development of Local Staff 109
6.3 Employee Projections 110
7.0 Contributions to the Maldivian Telecommunications and Information Technology Sectors 111
8.0 Financial Plan 113
8.1 Assumptions 113
8.2 Projected Financial Statements, Ratios and Key Measures 127
8.2.1 Financial statements 127
8.2.2 Ratios 127
8.2.3 Key Measures 127
8.2.4 Risks 128
1.0 Executive Summary
Contact Information:
Physical Address:
National Mobile Telecommunications Company K.S.C. (Wataniya Telecom)
Wataniya Telecom Tower
Plot 1/A Ahmed Al-Jaber Street
Sharq, Kuwait City
Mailing Address:
P.O. Box 613
Safat, Kuwait 13007
www.wataniya.com
Bid Representative Details:
Primary Contact:
Mr. Ahmad Y. Haleem
Chief Executive Officer, Wataniya International FZ-LLC
E-mail: ahaleem@wataniya.com
Tel. No: +965-243-3917 Ext: 3500
Mobile: +965-636-5050
Fax No: +965-243-3972
Secondary Contact:
Mr. Darren Walker
Communications and Investor Relations Director, Wataniya International FZ-LLC
E-mail: dwalker@wataniya.com
Tel. No: +965-243-3917 Ext: 3456
Mobile: +965-638-8860
Fax No: +965-243-3972
National Mobile Telecommunications Company K.S.C. (Wataniya Telecom) has a demonstrated track record of rapid network deployment, and the vision and expertise to address the unique geographical requirements in the Maldives to provision a new GSM network, Wataniya Telecom Maldives (WTM), in an innovative and technologically feasible way.
Launched in December 1999, Wataniya Telecom is a leading GSM mobile operator in the Middle East and North Africa (MENA) region. The main business of Wataniya Telecom is the supply and provision of mobile telephony, and related value added services in the region under operating licenses issued from the relevant government authorities. The company has been listed on the Kuwait Stock Exchange since July 1999.
With a market capitalisation of US $2.8 Billion, Wataniya Telecom has rapidly expanded beyond Kuwait and currently serves over 2 million customers in Kuwait, Tunisia, Iraq and Algeria. Building on its experiences in marketplaces such as Iraq where it launched only 2 months after being granted the license to provide mobile telephony services in the northern region of the country, Wataniya has the expertise to develop the second mobile telephony network in the Republic of Maldives. Utilising a fully integrated network deployment strategy, the Company most recently celebrated its commercial launch in Algeria.
Wataniya International, a fully owned subsidiary of Wataniya Telecom, is charged with leading the pursuit of continued international expansion opportunities, as well as leveraging its extensive technical, financial and commercial synergies to provide support and strategic direction to the Wataniya Telecom group of mobile operators.
It is envisaged that Wataniya Telecom Maldives’ Human Resources department will focus on recruiting and developing the skill sets of Maldivian staff, ensuring that there is full compliance with Foreign Investment Guidelines regarding hiring and training to Maldivians with the ultimate aim of employing Maldivians at technical, skilled, and management levels.
Following is the organisational structure for WTM:
Figure 1
In the countries where it operates Wataniya takes a customer-centric approach by making its products and services as affordable and widely available as possible. Three tiers of potential customers have been identified: Malé residents, residents of the other inhabited islands, and tourists serviced by the extensive tourism industry in the Maldives. Wataniya Telecom Maldives intends to introduce an innovative direct delivery system to address the widespread geography of the island nation.
Traditional points of sale strategically located throughout the Maldives in close proximity to intra-national airports, will be complemented by a sea plane and a dhoni (water taxi) retrofitted to transform them into mobile points of sale with the same branding as our fixed locations. This will ensure that the customer experience is the same wherever they choose to access our service offerings. Both mobile points of sale will have the ability to provide direct delivery service to potential subscribers throughout the Maldives, particularly in remote areas, to facilitate ease of accessibility to Wataniya Telecom Maldives products and services.
Direct delivery will be enhanced by a rich Value Added Services (VAS) portfolio. Leading edge technology such as Push to Talk (PTT), WI-FI, and video streaming will be offered, in addition to supplementary services like SMS and MMS.
From a technical perspective Wataniya Telecom Maldives will utilise GSM frequencies in the 900 MHz band, and provide 95.7% nationwide population coverage. This will allow a maximum number of users access to the network at any given time. One hundred per cent network capability will be available 6 months after the license is signed, instead of the 42 months stipulated in the license requirements. EDGE and GPRS will be available at launch for customers with handsets that support these technologies. The proposed GSM system will conform to ETSI standards. National and regional regulations will also be respected. WTM intends to launch a commercial trial for 3G in Malé by month 18. The commercial trial will measure the commercial feasibility and accordingly, WTM will assess whether it is viable to rollout the services in the rest of the country.
Wataniya Telecom Maldives intends to deploy radio site designs that are sensitive to the environment. All public areas, including sports stadiums and other key buildings will be serviced using in-building and/or low profile equipment that conforms to international environmental norms. Through innovative design, it is envisaged that our network will offer:
• High capacity and expandability allowing straightforward and seamless expansion of network capacity and coverage. A minimum 6-month build ahead margin will be deployed from the inception of all main network entities based on the customer forecast.
• High quality of service by dimensioning all network elements ahead of the expected demand
• High availability by providing redundancy in terms of key network equipment and duplication of traffic routes wherever feasible
• High flexibility by offering full adoption of open standards and service delivery platforms to allow the rapid deployment of new services and features with full Telco-grade reliability
• Voice and data services to all customers including VAS, messaging and roaming will be available to everyone
Wataniya Telecom has built an impressive portfolio of diverse and successful operations by being innovative and identifying and investing in key markets that have growth potential. The Maldives represents such an opportunity to explore new territory and expand the company’s footprint outside the Middle East and North Africa where it continues to build its reputation as a mobile telephony operator of quality. Wataniya has the finances to invest in a dynamic growth market like the Maldives, and, in addition to license fees, intends to make a capital investment of USD 40 million in the first year.
As a responsible corporate citizen Wataniya strives to give back to the communities in which it conducts business, recognizing that corporate citizenship is directly linked to social accountability. To achieve this goal in the Maldives Wataniya expects to make a significant contribution to the Maldivian and corporate education sectors. 1% of annual revenue will be allocated for contributions to the Maldivian Telecommunications and IT sectors. This contribution translates into more than USD 11,000,000 over the license period. WTM envisages assisting the government of the Maldives to establish a Telecommunications and Information Polytechnic, which will feature a world-class learning environment, with computer labs, distance learning and Research and Development (R & D) facilities.
Additionally, WTM will endeavour to generate international funding from both public and private sector sources in order to assist the government to develop its most valuable resource, the people of the Maldives.
Wataniya Telecom Maldives welcomes the opportunity to offer Maldivians a range of choices by committing itself to providing affordable, technologically advanced mobile telephony solutions.
2.0 Information Regarding the Bidder
2.1 Corporate Information Regarding the Bidder
Launched in December 1999 in the State of Kuwait, National Mobile Telecommunications Company K.S.C. (Wataniya Telecom) is a leading GSM mobile operator in MENA (Middle East North Africa) region. Wataniya Telecom is a publicly listed Kuwait shareholding company with a commercial registration number of 73211. The main business of Wataniya Telecom is the supply and provision of mobile telephony, and related VAS services in the region under operating licenses issued from the relevant government authorities.
With a market capitalisation of US 2.8 Billion, the company has rapidly expanded beyond Kuwait and currently serves over 2 million customers in Kuwait, Tunisia, Iraq and Algeria.
Wataniya International is charged with leading the pursuit of continued international expansion opportunities, such as the Maldives, as well as leveraging technical, financial and commercial synergies with the Wataniya Telecom group of mobile operators.
Physical Address:
National Mobile Telecommunications Company K.S.C. (Wataniya Telecom)
Wataniya Telecom Tower
Plot 1/A Ahmed Al-Jaber Street
Sharq, Kuwait City
Mailing Address:
P.O. Box 613
Safat, Kuwait 13007
www.wataniya.com
2.2 Authorised Representative
Mr. Ahmad Y. Haleem
Chief Executive Officer, Wataniya International FZ-LLC
2.2.1 Representative Details
E-mail: ahaleem@wataniya.com
Tel. No: +965-243-3917 Ext: 3500
Mobile: +965-636-5050
Fax No: +965-243-3972
2.2.2 Power of Attorney or Supporting Bylaws
Mr. Ahmad Y. Haleem
Chief Executive Officer, Wataniya International FZ-LLC
E-mail: ahaleem@wataniya.com
Tel. No: +965-243-3917 Ext: 3500
Mobile: +965-636-5050
Fax No: +965-243-3972
[Please refer to the Power of Attorney on the next page]
2.3 Shareholder Information
Shareholders who own 5% of the shares or more as of August 31, 2004
National Mobile Telecommunications Co. K.S.C are listed in the following table:
Table 1
No. Shareholders Name Number of Shares Percentage
1. KIPCO 123,839,116 31%
2. Kuwait Investment Authority 96,084,320 24%
3. Publicly Held 219,923,436 45%
KIPCO
Kuwait Projects Company (Holding), popularly known as KIPCO, is one of the premier investment holding companies in the Middle East and North Africa (MENA) region. KIPCO has substantial ownership interests in a diversified portfolio of companies in Europe, the Middle East, and the USA. The group focuses on two core business sectors: Financial Services and Media & Telecom. In addition, it has interests in the Real Estate, Industrial, and Management & Advisory Services sectors. It also has substantial investments in dairy, food services, fisheries and industrial coating business. KIPCO is the largest non-government company in Kuwait, with more than $10 billion under management or control. Today the company employs 13,000 people.
KIPCO was incorporated in 1975. Since then, the company has grown substantially and made significant investments in a diversified portfolio of companies operating throughout the MENA region and in other countries of the world.
Kuwait Investment Authority (KIA) (State of Kuwait)
Kuwait Investment Authority (KIA) is an independent quasi-governmental legal entity established in 1982 to develop and manage the general reserves, assets and other funds of the State of Kuwait. KIA's direct investments and assets under management exceed USD 60 billion. KIA's Board of Directors is headed by the Minister of Finance. The Minister of Oil, as well as the Governor of the Central Bank are also Board Members.
In addition to the management of Kuwait investments on behalf of the Kuwaiti Government, KIA serves as the Government vehicle in enhancing Kuwait's national economic interests.
2.4 Qualification Details
2.4.1 Telecommunications Operating Experience
Table 2
Country / Region Date of Licence Award Licence Term
Yrs Scope Of Licence Licensed Pop’s
(M) Subscribers
as of 30,09,2004 Frequency Band
1. Kuwait 12 Oct 1997 Indefinite National GSM 2.4 824,640 891.8-897.6MHz
936.8-942.6MHz
913-914.8 MHz
958-959.8 MHz
1742.4-1754.6MHz
1837.4-1849.6MHz
2. Tunisia 21 May 2002 15 renewable National GSM 9.9 878,359 902.5-915MHz
947.5-960MHz
1779-1785MHz
1874-1800MHz
3. Iraq
22 Dec 2003 2 Regional/National GSM 22 301,067 903.3-914.9MHz
948.3-959.9MHz
4. Algeria
14 Jan 2004 15 renewable National GSM 32 61,266 [Launched on 25 August, 2004] 907-915MHz
952-960MHz
1768.2-1774MHz
1863-1869MHz
2.4.2 Audited Financial Statements
[Please refer to Volume II - B – Appendix 1.0]
2.4.3 History of Financing Activity
Table 3
Date Telecom Operating Company (Investee) Amount Financed in Local Currency Amount Financed in US $
Borrower
and Type
of Financing Lead and Co-lead Managers, Co-Managers,
Arrangers and Co-Arrangers
1. Sep 2004 OTT Orascom Telecom Tunisie – Tunisia 460,994,683
Tunisian Dinars $380
Million OTT Orascom Telecom Tunisie – Tunisia, Limited Recourse Bayerische Hypo-und Vereinsbank AG, Arab Banking Corporation, KfW and Standard Bank of London
2. Nov 2003 OTT Orascom Telecom Tunisie – Tunisia 74,978,413
Tunisian Dinars $61.8 Million OTT Orascom Telecom Tunisie – Tunisia, Project Financing Tunis International Bank
3. Nov 2003
OTT Orascom Telecom Tunisie – Tunisia 100 Million
Tunisian Dinars $82.4
Million OTT Orascom Telecom Tunisie – Tunisia, Project Financing Various Tunisian Banks
4. April 2002
NMTC – National Mobile telecommunications Co. K.S.C. 18 Million Kuwaiti Dinars $60
Million NMTC – Corporate Burgan Bank
5. June 2000 NMTC – National Mobile telecommunications Co. K.S.C. 20 Million Kuwaiti Dinars $68
Million NMTC – Islamic First Investment Company (Kuwait)
2.4.4 Regulatory Compliance
Table 4
Country /
Region Effective Date of Licence Scope Of Licence
Compliant with licence terms and conditions Certification from competent regulatory body or sworn statement Any sanctions for regulatory non compliance Any pending lawsuits for regulatory non compliance
Comments/
Explanations
1. Kuwait 12 Oct 1997 National
GSM Cellular Yes
Yes No No
2. Tunisia 21 May 2002 National
GSM Cellular Yes
Yes No No
3. Iraq
22 Dec 2003 Regional/National GSM Yes Yes No No
4. Algeria 14 Jan 2004 National
GSM Cellular Yes Yes No No
[Please refer to the Declaration of Regulatory Compliance on the next page]
2.5 Bidder’s Experience
2.5.1 Operating Experience
Launched in December 1999 in the State of Kuwait, Wataniya Telecom is a leading GSM mobile operator in MENA (Middle East North Africa) region. With a market capitalisation of US 2.8 Billion, the company has rapidly expanded beyond Kuwait and currently serves over 2 million customers in Kuwait, Tunisia and Iraq. A fourth GSM operation in Algeria was commercially launched at the end of August 2004.
The following table gives brief information about Wataniya’s four operations and the ownership structure:
Table 5
Operator & Country Launch Year No. of Subscribers as of September 30, 2004 WT share Partner
Wataniya Telecom Kuwait 1999 824,640 100% KIPCO, Kuwait Investment Authority
Tunisiana
Tunisia 2002 878,359 50% Orascom Telecom
Asiacell
Iraq 2003 301,067 49% Asiacell, United Gulf Bank (UGB)
Wataniya Telecom Algeria 2004 61,266
[Launched on 25 August, 2004] 71% Gulf Investment Corporation
(GIC), UGB
2.5.2 Marketing Experience
Wataniya takes a customer-centric approach by making its products and services as affordable and as accessible as possible in the countries where it operates. The company always endeavours to offer a competitive value proposition to potential customers by providing comprehensive marketing messages which aid the consumer in making decision about products and services.
2.5.3 Technical Experience
Wataniya Telecom, which has successfully launched networks in Kuwait, Tunisia, Iraq and most recently Algeria, has a demonstrated track record of rapid network deployment utilising state of the art technology and international best business practices.
2.6 Financing Strategy
2.6.1 Sources of financing
National Mobile Telecommunications Company K.S.C. (Wataniya Telecom) will immediately upon award of license, establish a Company in the Maldives in conformity with Bid submission rules. According to the projected cash flow statement, the Peak Funding Requirement of the Project-Company is USD 40 million in year 2 of operations (i.e. 2006). In line with our investment philosophy and approach, funding the project’s cash requirements will be done on a debt to equity ratio of 60:40. Accordingly, we will capitalize the Company at USD 16 million and will arrange for USD 24 million of debt.
During the last 5 years, Wataniya Telecom has availed itself of over USD 600 million of debt financing in various forms (i.e. Corporate Loans, Islamic Financing, Limited Recourse Financing, Export Credit). In addition, and during the course of our operations, Wataniya Telecom has transacted over USD 1 billion of non-cash facilities in the form of letters of credit and letters of guarantee. These facilities have been arranged by local Kuwaiti banks, such as Burgan Bank, regional banks such as Arab Banking Corporation, Arab Bank, the Housing Bank for Trade and Finance, and International Banks such as Citibank, Bayerische Hypo-und Vereinsbank AG, KfW, Standard Bank of London and BNP-Paribas.
In addition to banking institutions, Wataniya Telecom has excellent relationships with major international mobile telecommunications equipment suppliers and, consequently, has access to a variety of vendor financing schemes. In fact, on other occasions, the company has transacted vendor financing of over USD 100 million for up to 4 years in tenor. In line with past practices, the debt financing strategy will be based on a combination of vendor financing and limited recourse financing (and if need be through full corporate support).
Wataniya Telecom Maldives (WTM) will supplement vendor financing with bank financing, preferably from local banks in the Maldives and in Maldivian Rufiyaa, which will indirectly benefit the Maldivian economy.
Cash flow for the operations indicates the need for USD 24 million debt financing for a seven-year tenor. In view of past experience, such financing is easily obtainable.
WTM will also have immediate access to KIPCO group of companies’ subsidiary banks namely:
Burgan Bank of Kuwait with assets of USD 7.1 Billion
United Gulf Bank, Bahrain with assets of USD 1.2 Billion
Jordan Kuwait Bank in Jordan with assets of USD 1.1 Billion.
Tunis International Bank in Tunisia with assets of USD 320 Million
2.6.2 Bidders Share Plan
Prior to the public share offering the company will be 99.9% owned by Wataniya Telecom, with the remaining 0.1% owned by a Wataniya nominee. As stated earlier, Wataniya Telecom had revenues exceeding USD 500 million and a net profit exceeding USD 100 million in 2003. Wataniya Telecom maintains substantial cash reserves at all times in support of opportunities such as this mobile license. The balance sheet of the Company shows a cash and cash equivalent balance as at December 31, 2003 of over USD 160 million.
2.6.3 Public Share Offering
Wataniya Telecom's major shareholder, KIPCO Holdings, is one of the premier investment companies in Kuwait and the MENA region. It has managed a plethora of initial public offerings as well as other types of equity placements.
Wataniya Telecom's intention is to offer up to 40% of the Company's shares to the Maldivian public through an initial public offering (IPO), on the second profitable year of the Company, forecasted to be 2009 (year 5 of operation). As is the case with this type of transaction, the IPO shall be publicized through a variety of means that include newspapers, radio, TV and short messages to mobile subscribers. The shares will be offered in cooperation with the local banking community in order to ensure wide distribution. In case of oversubscription, the shares will be allotted on a pro-rata basis to the shares applied for, with preference given to small investors. For example, investors who have purchased 100 shares or less will get 100% while investors who have applied for more will get shares on a pro-rata basis.
Wataniya Telecom does not plan for the Company to have more than one class of shares and accordingly all the Company shares will have the same rights and obligations attached to them, including but not limited to voting rights, dividend and other economic rights, pre-emption rights within the boundaries of the laws and regulations.
2.7 Bidder’s Financial Capability
2.7.1 Bank Account Information
(Please refer to audited financial statements in Appendix 3.0, Volume 2)
2.7.2 Shareholder Finances
(Not applicable)
3.0 Marketing Plan
3.1 Market Research and Analysis
3.1.1 Criteria and objectives
The key objectives for the market research were:
• To provide qualitative information in order for Wataniya to develop its proposition to address the specific needs of the Maldivian market
• To provide inputs for the forecast of the development of the mobile market for the business plan and Wataniya’s success in the market
Research was conducted to determine the current state of the market and to capture data in order to analyse the future development of the market.
In terms of the present state of the market, information was gathered on current subscriber behaviour as well as public data available on Dhiraagu from TAM’s market assessment and other sources.
The assessment of the future development of the market was based on current un-met demand, and also growth in demand over the forecast period. There is clearly a high level of latent demand for mobile services that has not been met by Dhiraagu due to high prices, limited coverage and lack of service innovation. Growth in demand can come from a range of sources including the introduction of innovative services, better distribution, and demand due to increase in income and decreases in prices respectively.
The criteria used to design the market research program were accuracy, precision, and efficiency. Accuracy was ensured by designing the market research programme to cross-reference the information provided by each source to ensure as little bias as possible.
The need for precision was met by using a broad range of sources to ensure each estimate was independently validated. Where several variables were available from a single source, consistency checks were carried out to ensure, for example, that the relationship between volumes, prices and revenues were plausible.
3.1.2 Resources utilised
The research was carried out by Martin Duckworth, a Director of Coleago Consulting Ltd.
He is a statistician with 15 years of experience in data gathering and market analysis and 9 years of experience in the telecommunications industry. Martin was responsible for market information and analysis in OFTEL, the (then) UK telecommunications regulator, and for the last six years has worked as a telecommunications consultant. Martin has recent regional experience, having advised the TRC in Sri Lanka prior to the move from a RPP to CPP regime for calls to mobile.
Coleago Consulting Ltd (www.coleago.com) is a consultancy firm specialising in the telecommunications industry. Coleago’s consultants have wide experience of market research and market analysis, and have supported more than 25 bids for mobile licences throughout the world. Coleago is currently supporting Wataniya during the launch of the third mobile operator in Algeria.
In order to provide the most precise forecasts, three data sources were used:
1. Qualitative and quantitative information on the current mobile market in the Maldives, collected through a series of structured interviews with stakeholders in the telecommunications industry in the Maldives;
2. Statistical information on the Maldives, taken from Maldivian statistical sources;
3. International benchmarks drawn from a range of sources including the ITU telecommunications indicators, company annual reports, and Coleago’s own database of market information.
Structured interviews with industry stakeholders were carried out face to face in the Maldives. Interviews were arranged with all sectors of the industry except Dhiraagu. The majority of the interviews were carried out with the distribution sector because a successful distribution strategy is essential for launch, and distributors have first hand experience of customers’ buying behaviour. The interviews were wide ranging covering all aspects of the current market and likely future demand.
Interviews were not carried out with end users since experience has shown that market research of end users adds little value in estimating total market demand because demand for mobile services is similar between countries and customers have difficulty estimating their future purchasing behaviour. Thus, benchmarking against other countries provides a more accurate estimate of total demand growth.
A range of information was collected on the economic and social characteristics of the Maldives and the development of the telecommunications market in the Maldives. The sources of this information included the publications of the Ministry of Planning and National Development, press releases on the website of Dhiraagu, and information from the ITU World Telecommunications Indicators.
3.1.3 Research results
Current Status of the Mobile Market: Development of the Network
The first cellular network based on the AMPS network was launched by Dhiraagu in 1997. Demand exceeded expectations and by May 1998 the decision was taken to stop accepting new subscriptions to the analogue network and to instead build a GSM network. The GSM network was launched in October 1999 to existing mobile subscribers with the full commercial launch in November 1999. The initial GSM network was limited in coverage, capacity and service capability, only offering basic voice telephony services in Malé and the surrounding islands.
Since service launch, there have been a number of upgrades of service capability as outlined in Table 6.
Table 6
Date Service introduced
October 1999 Service launch
April 2000 Circuit switched data and fax
May 2000 International Roaming enabled
July 2000 Caller ID
April 2001 Voice mail
May 2001 SMS for post paid customers
September 2001 Pre-paid service
January 2002 SMS for pre paid customers
March 2002 Caller ID for pre paid
July 2002 Fax mail box
March 2003 Directory Enquiries via SMS
April 2003 Bill enquiries via SMS
May 2003 International SMS introduced
September 2003 Missed call alert for pre-paid
November 2003 Picture Messaging
September 2004 Missed call alert and call forwarding for Pre paid
End 2004? GPRS
End 2004? MMS
Introduction of service capabilities by Dhiraagu have lagged compared to other networks by a number of years. This results in user frustration since subscribers are aware that the services are available in other countries. In many cases, customers in the Maldives have up to date services which support enhanced functionality such as GPRS and MMS, but are unable to use this functionality due to network limitations.
The GSM network initially had limited coverage. In the early years of the network, despite the clear commercial and financial success of the network, Dhiraagu was slow to increase coverage, with coverage only increasing from 35% of the population to 40% of the population in the first two years. However, since 2001, Dhiraagu has increased coverage rapidly and has announced that coverage will reach 78% of the population by the beginning of 2005.
While coverage is very good in the Malé area, with few dropped calls and good signal strength, on the atolls, even in those areas where Dhiraagu nominally provides service, the coverage is not optimised. In many cases customers do not have sufficient signal strength to set up calls except in open areas or on the beach, due to vegetation blocking the signal.
Therefore, while mobile services have been a clear success in the Maldives, the development of the network did not keep pace with consumer demands both in terms of services and availability. The prospect of a second mobile operator has encouraged Dhiraagu to improve coverage and bring its network up to date in terms of service capability, but a substantial proportion of the population is still not covered by the mobile network.
Pricing Development
Since the launch of the service there have been a number of price reductions. These reductions have been the result of changes to the nominal price, and also changes to the charging basis with reductions brought about by a change to per second pricing as dictated by the Telecommunications policy. The move from per minute pricing to per second prices was conducted in three stages with intermediate stages of six second billing increments, starting with a one minute minimum charge and then followed by simple six second billing increments. The following chart summarises the changes in call pricing for post-paid and pre-paid customers, taking into account changes in the nominal prices, and in charging basis (the chart does not show prices for the new post-paid packages).
Figure 2
Figure 2 clearly illustrates the rapid decrease in price per minute since service launch with price reductions being concentrated in the early years for post-paid services, and price cutting in more recent years being concentrated on pre-paid subscribers.
There have been fewer price changes to fixed costs. The basic pre-paid subscription was 300 Rf/month at launch but was halved to 150 Rf/month one year later in November 2000. The rental then remained fixed until August 2004 when it was reduced to 100 Rf/month. The cost of a pre-paid voucher which allows services for one month has remained fixed at 100 RF since pre-paid services were introduced.
The connection charge for post-paid services was 1000 RF at launch but was halved to 500 Rf in November 2001. The price of a basic pre-paid connection kit, which includes 100 Rf of airtime, has remained the same since launch.
In summary since launch, call prices have fallen rapidly. However, for the majority of customers the minimum fixed costs of mobile services, the cost of a pre-paid connection kit, and the cost of a pre-paid voucher which allows one month of services, have remained fixed. This clearly forms an affordability barrier to take up of the service.
Trends in Demand
The most important trend has been a rapid increase in subscribers. While rapid take up has occurred in almost all jurisdictions, this trend was particularly marked in the Maldives due to the late rollout of a mobile network and the capacity constraints imposed until the GSM network was introduced. Thus, there was significant latent demand when the GSM network was launched, which resulted in rapid growth after launch. Further subscriber growth was driven by the introduction of services and the increased roll out of the network.
The latest available subscriber numbers are from a Dhiraagu press release in June this year where they noted that there were over 84,000 DhiMobile customers (including 68,000 pre-paid users). By extrapolating growth from the end of 2003 to this latest estimate, it would appear that there will be at least 100,000 Dhiraagu mobile subscribers by the end of 2004. Figure 3 illustrates this growth.
Figure 3
Growth has been relatively steady since the introduction of pre-paid services, and can be attributed to a number of factors including: increased coverage, price reductions and the increase in disposable income among a small segment of the population of Malé.
Over the period that mobile penetration has increased rapidly, fixed penetration has also increased, reflecting the low penetration and relatively low cost of a fixed line. This contrasts with many countries where the lower minimum costs of a mobile solution means that fixed line growth has slowed, or in some cases reversed the growth in fixed lines as mobile telephony has substituted fixed telephony. With the entry of a second operator we can expect fixed to mobile substitution to increase.
Prior to the launch of the GSM network, calling rates were constrained by lack of capacity on the network. Since the launch of the GSM network, there have been few capacity constraints as Dhiraagu has pro-actively increased capacity. However, growth in mobile traffic has been far slower than growth in subscriptions. Looking at the trend in calling rate per user, we see the clear impact resulting from the lifting of capacity restrictions at the end of 1999, followed by reduction in the call rate as the impact of high calling early adopters was diluted by mass market adoption of mobile telephony. Figure 4 illustrates this trend.
Figure 4
While this trend is clear in almost all markets in view of the fact that “early adopters” are those who are likely to make the most use of new services, the difference in the Maldives is especially marked suggesting that later additions are constrained by affordability to making a low number of calls. With call prices falling rapidly we can expect demand elasticity to result in constant call volumes by those already on the network.
Fixed telephony traffic apparently suffered a rapid decline in 2002. However, closer examination shows this is partly a statistic caused by the changeover to per second billing for local calls. Correcting for this implies that call volumes have declined, but at a much slower pace. This suggests that while there is some substitution of fixed calls by mobile calls, the impact is limited.
During the marketing assessment attempts were made to measure the need/feasibility for 3G services in the Maldives. However, preliminary research indicated that commercial viability of 3G services was not conclusive.
Revenue and ARPU
Dhiraagu reported mobile service revenues of 445 million Rufiyaa in 2003. The exact definition of this figure is unclear, for example, whether international calls to and from mobiles or revenues for calls terminating on the mobile network are covered.
Attempting to produce a “bottom up” estimate of mobile service revenues based on Dhiraagu prices and the data on the number of subscribers and outgoing calls suggests that connection, post-paid connection, and outgoing national call charges, account for approximately two-thirds of revenues. The remainder of the revenues are presumably largely due to roaming.
The proportion of revenues coming from inbound roamers is clearly significantly larger than in most countries. This is particularly beneficial to customers in the Maldives because the extra revenue allows the operators to offer a better service to the Maldivian population at a cheaper price. The roaming revenues also bring a range of indirect benefits as they represent a significant contribution to the balance of payments.
The large proportion of roaming revenues means that a straight analysis of ARPU, dividing total mobile revenues by the number of our network subscribers, is not a good indicator. Instead we built a bottom up estimate of revenues generated by Dhimobile subscribers based on the usage information and prices quoted. Figure 5 shows this trend.
Figure 5
The clear trend is for ARPU to rapidly fall both because prices have been decreasing but also because usage has fallen. This decrease in ARPU generated by Maldivian customers has been offset by increased revenues from inbound roamers as the mobile network has been rolled out to cover an increasing number of resorts.
Distribution
Mobile phone shops are concentrated in Malé, with customers on the islands either visiting Malé themselves or asking their relatives to buy handsets. Competition is intense with handsets sourced from Singapore. In general there is no direct link between the sale of mobile service and mobile handsets, due to the fact that handsets are sold separately with no subsidisation. The only exceptions are some Dhiraagu Teleshop promotions, where pre-paid packages are sold with a subsidised phone. While a number of shops in Malé are able to sell the pre-paid starter kits on an agency basis, only Dhiraagu is able to connect post-paid customers.
Pre-paid recharge vouchers are widely available both in Malé and on the Atolls.
Dhiraagu is perceived as a competitor to other dealers, through its Teleshop, rather than as a partner. Margins on distribution of pre-paid packages and recharge vouchers are low, with shops offering them as a service to their customers rather than as a source of profits.
SWOT Analysis of Dhiraagu
Table 7
Strengths
100% of the current market
High quality mobile network in Malé
High quality customer care.
Access to up to date technology and processes through Cable and Wireless
Weaknesses
High prices
Limited coverage outside Malé
Lack of commercial creativity due to current monopoly position.
Slow to introduce innovative products
Poor relationship with distribution channels (seen as a competitor rather than a partner)
Opportunities
Network roll out to the majority of the population.
Potential to capture the majority of the addressable market before entry of a second player Threats
Entry of a second mobile operator.
Price sensitive customers with limited loyalty
Cannibalisation of fixed services by low cost mobile services
Opportunities for a second mobile operator
Addressable Market
The addressable market consists of the resident population and incoming visitors - principally tourists.
The current population is estimated to be 289,000. However, due to the high birth rates in the recent past, a large proportion of the population is under the age of 15 and, therefore is unlikely to have sufficient purchasing power to afford a mobile for a few years.
190,000 of the population are over the age of 15. However, not all of the population is covered by the current mobile network, with Dhiraagu estimating that they will cover 78% of the population by early next year. This means that approximately 150,000 of the population will be covered. Based on current trends in mobile subscriber growth, there will be around 100,000 subscribers by this point or two-thirds of the adult population with mobile coverage.
Figure 6 below illustrates these relationships:
This shows the three main potential sources of subscriber growth:
1. Increases in the adult population as the current large number of children reach adult age
2. Increased coverage of mobile networks as WTM roll out to those areas not currently served
3. Increases in the penetration of mobile services in areas of coverage as mobile services become more affordable due to price reductions introduced by WTM and increases in wealth
As well as the increase in the resident population, we can expect a continued increase in the number of visitors.
The number of tourists visiting the Maldives was 565,000 in 2003. This number has increased continuously since tourism was first introduced. Since 1998, the average increase in the number of tourists was 42%, while the average stay is just over a week.
Almost 80% of tourists come from Europe, where GSM is the main mobile system used. Many of the remaining countries have one or more networks using GSM. Notable exceptions are Japan and Korea. However, many Japanese and Korean tourists obtain GSM phones when travelling to allow them to roam. Given that tourists to the Maldives typically have high incomes, it is likely that the vast majority of these visitors will have GSM handsets and will have roaming enabled.
Our market research suggests that only a few resorts discourage the use of mobile phones in public areas. In addition, the resorts make extensive use of mobile telephone services themselves.
Affordability
The most common complaint about Dhiraagu’s mobile services is the level of prices. While the recent price reductions by Dhiraagu have reduced the marginal costs of calls, the fixed monthly cost for the majority of customers who use the pre-paid service has remained at 100 Rf since launch of the pre-paid service.
While there are a significant proportion of customers for whom the current prices are affordable, and a small minority who have sufficient disposable income to purchase new handsets on a regular basis, a large number of potential users do not have sufficient income to afford the service.
Even those customers who can afford the fixed costs of mobile services have adopted behaviour to minimise their expenditure, such as limiting the duration of calls or hanging up before the call is answered in order for the called party to call them back.
Opportunity for a Second Mobile Licensee
The first clear opportunity for a second mobile licensee is that Dhiraagu has suppressed demand for services by setting prices at monopoly levels. Therefore, on entry a new mobile operator can gain market share rapidly by setting prices at a level that better reflect costs. This will encourage users onto the network who previously could not afford a mobile phone. It will also stimulate existing subscribers to churn due to the prospect of reducing their overall bill, and being afforded the opportunity to make more calls. This creates a virtuous circle as increases in traffic also drives down unit costs due to economies of scale allowing yet further reductions in prices.
The second opportunity afforded a new entrant operator is the ability to build a more efficient network than Dhiraagu’s. This efficiency will come from using the most current technology when building the network, and by dimensioning the network to take account of demand in the medium term. Dhiraagu appears to have consistently underestimated the demand for mobile services. This will result in inefficiencies in both the core network and the radio network, as it is less efficient to add capacity to an under-dimensioned network than to build a correctly dimensioned one. Proper network design will reduce Wataniya’s unit costs allowing it to price competitively, and still generate a reasonable return on investment.
The third opportunity comes from capturing a share of the traffic that is currently carried on the fixed network. Currently, the structure of both fixed and mobile prices means that such substitution is unlikely as both the fixed price of a mobile handset, the minimum subscription or the cost of a monthly pre-paid voucher, and the marginal costs, the cost of a call, are significantly above that of a fixed line. However, as prices for mobile services fall, and potentially fixed line prices become more aligned with costs, a time will come when the fixed costs of mobile service fall below that of fixed service.
The fourth opportunity is to offer a range of innovative services that will appeal to consumers. Introducing innovative services has a number of advantages. First the services themselves will generate revenues. However, perhaps more importantly, innovative services are an important tool to attract and retain “early adopters”. Capturing these early adopters is vital as they tend to generate high revenues and also influence other purchasers.
Lastly, there is scope for service and pricing innovation. These include closed user group services offered to larger enterprises and the government, providing cheaper calls within the user group. Other service innovations may include a range of pre-paid plans reflecting customers differing usage patterns, for example offering cheaper off-peak calls.
3.1.4 International benchmarks
International benchmarks can shed light on likely broad trends in the market. However, as each country is unique, with the Maldives in particular having many rare characteristics, our forecasts are largely based on data specific to the Maldives with international benchmarks mainly acting as a credibility check.
To understand the likely short and medium term evolution we need to look at countries with similar characteristics, while longer term trends can be seen from the behaviour of higher income countries.
The South Asian countries were not considered to be a good benchmark for the Maldives given their much lower level of wealth as measured by GDP per capita. Suitable benchmarks can be found from “Middle Income” countries, such as the Maldives. These countries are a mixture of liberalised and monopoly markets although there has been a strong trend to liberalise these markets recently.
The chart below compares mobile penetration across the middle income countries (which include the Maldives) and those of higher income countries with penetration in the Maldives.
Figure 7
The key characteristic is that the rates of growth and evolution of penetration are similar between the three groups of countries, with the key difference being the timing of growth,
with penetration in the “middle income” countries lagging behind the “upper middle income” countries by two years and the “upper income” countries by about five years.
Based upon the experience of the most developed countries, we can expect penetration to be nearly universal among adults in the long run. While penetration in the Maldives was below the average for the “lower middle income” countries until 2002, presumably largely due to the limited coverage of the network, the Maldives had caught up by 2002.
A number of middle income countries have liberalised their markets recently. The table below shows the change in penetration from 31st December for the year prior to liberalisation to 31st December the year after liberalisation for a selection of the countries that have liberalised.
Table 8
Country Date of Competitive entry Penetration at the end of the year prior to entry Penetration at the end of the year after entry
Albania August 2001 1.0 27.6
Algeria February 2002 0.3 4.6
Belarus Jun 2002 1.4 11.3
Bulgaria September 2001 9.1 33.3
Jamaica April 2001 14.2 53.3
Jordan September 2000 2.4 16.7
Morocco March 2000 1.3 16.4
Tunisia December 2002 4.0 19.2
This table indicates that liberalisation has a dramatic impact on penetration in all countries that have been liberalised, with a clear discontinuity in the rate of growth. This discontinuity can be explained by the price competition and service innovation the competition introduces. We can expect growth in the Maldives to also be above trend following market entry in 2005.
3.2 Market Forecast
3.2.1 Methods and assumptions
Segmentation
For the market forecast the population of the Maldives was broadly segmented into residents of Malé and residents of the Atolls. This segmentation reflects difference in both the demand side and supply side as set out in the table below.
Table 9
Malé
Other atolls
Coverage of mobile services Extremely good coverage, including in-building Many islands not covered at all with some islands having limited coverage due to vegetation blocking signals
Penetration of mobile services Close to saturation by 2004 Low but growing penetration
Penetration of fixed services High penetration of fixed lines Access to payphones but very few fixed lines due to the prohibitive cost
Employment Wide range of service industries and government Concentrated on fishing and tourism
Income Relatively high income Relatively low income
Use of innovative services Large number of early adopters with up to date mobile handsets who would use innovative services if they were available Currently buy low end handsets and use simple voice services
Price sensitivity Higher disposable income means usage is not limited by income Extremely price sensitive and will restrict usage due to income constraints
Distribution Wide range of mobile phone shops in Malé Mobile phones purchased during visits to Malé or by relations or friends who live in Malé
There is substantial internal migration, particularly towards Malé with almost half of the population of Malé being registered elsewhere. The population of Malé grew by 18% between the censuses of 1995 and 2000, while the population of the Atolls only grew by 7.5%.
The population of Malé can be divided into a number of sub-segments such as early adopters, young adults living with parents, upper management, etc. The population outside Malé is more homogeneous with fewer clearly defined sub-segments. While these customer sub-segments will be important for designing service propositions, for the purposes of market forecasting the two segments provided sufficient accuracy.
Penetration for the two segments was forecast by fitting a logistic curve to the historical data (a logistic curve is an S-shaped curve typically used to model product take up). The key input variable for fitting a logistic curve is the upper asymptote, the level at which the market becomes saturated. Based on the experience of countries whose markets are more developed this saturation point was set at 85%.
The split between pre-paid and post-paid subscribers was based on the results of our market research with respect to customer preference to post-paid and pre-paid. This approach was used rather than defining pre-paid and post-paid as segments give that subscribers will move between pre-paid and post-paid methods of payments. In addition, the service propositions offered by Dhiraagu and WTM can alter the payment mechanism chosen by subscribers.
Total market gross additions come from two sources: new subscribers to the networks and customers who have left one of the existing networks. Gross additions can be calculated as net additions plus disconnections, with disconnections calculated by applying a churn rate to the subscriber base.
WTM’s share of subscribers was estimated by applying assumptions about market share of new subscribers, and also in the early year’s assumptions about the proportion of Dhiraagu’s existing customer base that will be attracted to WTM’s proposition. This migration from Dhiraagu to Wataniya will result in an increased churn rate for Dhiraagu.
Average minutes of use for the total subscriber base were estimated, and the following conclusions drawn:
• The relationship between the usage of those subscribers on the network and new joiners. As demonstrated above, usage for the later arrivals on the mobile network tends to be lower than the existing subscriber base because early adopters tend to be heavier users of mobile services
• Demand elasticity, i.e. the relationship between price and individual customers. The reductions in price proposed by WTM are expected to result in greater usage by low income customers who are currently constrained by limited disposable income. Therefore, we would expect some users, especially pre-paid users, to continue to spend a similar proportion of income on calls, but take advantage of lower prices.
• Income elasticity. As wealth increases over time (measured by GDP per capita) usage will also tend to increase.
Average minutes of usage for WTM’s customers were estimated by applying assumptions about the relative usages of its customers compared to the customer base as a whole. In the early years we would expect customers migrating from Dhiraagu’s customer base to include a significant proportion of high usage customers. The number of market SMS is forecast on a similar basis to call minutes. The forecast penetration and usage of MMS is based on industry sources.
Base year roaming revenues were estimated by subtracting estimates of non-roaming revenues from a total mobile service revenues report by Dhiraagu. This was then converted into an estimate of the number of roaming minutes. This estimate of the number of remaining minutes was then projected forward based on a set of assumptions about growth in the number of visitors, the proportion of visitors with roaming enabled, and the usage per roamer. Since the network that an inbound roamer uses is primarily a function of the network signal strength, the market share of roamers is forecast based on relative coverage of the networks.
3.2.2 Subscriber forecast
(Please refer to the next page)
3.2.3 Traffic forecast
(Please refer to the next page)
3.2.4 Roaming Forecast
(Please refer to the next page)
3.3 Marketing Strategy
3.3.1 Products and services
Wataniya Telecom Maldives will take a customer-centric approach by ensuring that its products and services are affordable, readily available countrywide, and add value to all Maldivians’ in their daily activities. The company will deliver a technologically advanced and financially viable GSM network which offers GPRS, EDGE and Roaming from day one of network launch. In addition, WTM will launch 3G services in Malé on a commercial trial basis. Further rollout of 3G will be dependent on market feedback. To further enhance its product and service offerings, leading-edge technology such as Push to Talk (PTT) over cellular, WI-FI in hot spots and video streaming will be offered, in addition to fundamental cellular services.
WTM plans to offer a wide variety of advanced messaging services. This will include the following:
Short Message Service (SMS)
Customers will be able to send text messages to others and "talk" to their friends using messages typed out using any handset. SMS's can be forwarded and stored. To increase the reach ability, WTM will offer Interoperability for SMS messages with networks using Code Division Multiple Access (CDMA), Time Division Multiple Access (TDMA), and Global System for Mobile (GSM) communications, and General Packet Radio Service (GPRS) networks.
Multi Media Messaging (MMS)
MMS will enable customers to send a combination of text, sounds, music, images, and video, in a single message for display on virtually any MMS compliant handset. MMS offers many new applications such as information services, games, entertainment, and location-based services. WTM customers will be also able to send MMS messages via a WEB interface to any e-mail address. Also important to note is that customers will have the ability to send MMS to non-MMS capable mobile phones. The other customer will be notified through an SSM that an MMS message has been received. The user will receive a unique id to access the message via a Web interface).
Photo Album
WTM customers will be able to store their photographs from their handset to a permanent storage using a short code. Users can easily manage their album via a Web based interface, and can view, delete, upload, and edit images.
Content Development
WTM will offer the Value Added Service Providers (VASP) easy and standardised connectivity to the SMSC, and MMSC. This presents growth opportunity for the development of Maldivian application and content providers to enrich the lives of Maldivians with applications and services that will help the development of this unique society.
E-Mail Service
E-Mail service is no longer just available via the PC. WTM’s customers will be able to get connected to access their mail through their mobile phones. With SMS capable handsets, WTM customers will be able to sign in using their ID and start receiving, and sending mail messages to friends, family and co-workers using SMS’s. Additionally, with GPRS/EDGE capable handsets WTM customers will be also able to access their e-mails anytime, anywhere through their mobile phones using Web, or WAP (according to the phone’s capabilities).
Instant Messaging and Chatting Services
WTM will also be offering Instant Messaging and Chatting services. WTM customers will be able to get connected through their Wataniya line, using SMS, GPRS, or EGDE capable handsets. They will be able to communicate in real time with friends, family and co-workers.
Wataniya Telecom already has agreements with the world’s favourite e-mail and chat providers: Yahoo, and MSN. Existing agreements will be expanded to include WTM.
Push To Talk
Instant Personal Talk (a two-way walkie-talkie service) also known as one-to-one barge calls or private calls dialled from the directory. With push to talk customers can have group conversations or one on one chats with friends. This innovation in mobile telephony will be beneficial in the tourism sector on resorts where traditional walkie-talkies are used. This service will run over GPRS/EDGE handsets and does not require separate frequencies.
WI-FI
Customers will be able to access the Internet wherever they are in the country, as long as they are at a wireless ‘hot spot, and their computer is equipped with the proper wireless local area network (WLAN) hardware and software. When outside the hotspot, customers can still access the internet using EDGE and GPRS.
In Malé, customers will be able to access the internet at 3G speeds in month 18.
3.3.2 Tariff and pricing plan
WTM will provide its customers with two broad product offerings: (1) Pre-paid packages which enable users to purchase airtime up front and, (2) post-paid packages where users are billed monthly in arrears for calls made.
WTM will offer a competitive value proposition to prospective customers.
The tariff structure and proposed packages ensures that the high usage subscribers (post-paid) benefit from lower tariffs than medium or light usage subscribers (pre-paid). Dhiraagu’s existing prices and the market research has led us to assume the following prices in our business plan.
The prices listed below represent a 30% discount of the last published prices of Dhiraagu:
Table 10
(US Dollars)
Peak
Off-Peak
Post-Paid
Monthly subscription fee 4
Price per minute - voice 7.42 cents 4.38 cents
Price per SMS-local 4.375 cents 4.375 cents
International SMS 8.75 cents 8.75 cents
Prepaid
Price per minute –voice 8.5 cents 7.85
Price per SMS -local 4.375 cents 4.375cents
International SMS 8.75 cents 8.75 cents
Pre-paid
Pre-paid customers typically generate lower usage than post-paid customers and are often reluctant to make a fixed financial commitment (paying monthly fees) or do not have the credit profile to elect for a post-paid plan. Compared to the post-paid plan, pre-paid plans involve:
• Higher average per minute airtime charges
• Lower customer acquisition costs
• No billing expenses, credit or payment risk
WTM will charge all new customers a one-time activation fee of $USD 25 for service activation which includes 100 Rf ($8 USD) of preloaded minutes.
Recharge cards will be available in denominations of 100 Rf ($USD 8), 200 Rf ($16 USD) and 500 Rf ($39 USD) respectively. Each face value will have a different validity period for incoming and outgoing minutes.
Post-paid
WTM’s comprehensive post-paid plan will enable customers to communicate at competitive prices. This service will be particularly attractive to business people.
Roaming
Independent research shows that the proportion of revenue coming from inbound roamers is significantly larger in the Maldives than in many other countries. As the Maldives becomes an even more popular tourist destination this will prove to be a benefit to customers in the Maldives because the extra revenue will allow WTM to offer better service to the population at a lower price. EDGE/GRPS Roaming and SMS/MMS interconnect will also be available.
3.3.3 Branding, Advertising and Promotion
WTM believes that a powerful brand is the strongest and most sustainable long-term competitive advantage of a mobile operator. Clear, concise brand positioning is essential for rapid brand awareness building in order to ensure brand affinity over time. For this reason, WTM will be investing considerable effort into defining its branding strategy.
Three main market segments have been identified in WTM’s independent market assessment. These are: Malé residents, residents of the other inhabited islands, and tourists serviced by the extensive tourism industry in the Maldives.
The entire marketing mix of Above the Line (ATL) and Below the Line (BTL) activities will ensure that all Maldivians have an in-depth perspective on WTM’s products and service offerings. TV, radio and print will be utilised on a selective basis and ongoing brand building programmes will be implemented in anticipation of WTM’s technical and commercial launch. Branded mobile points of sale will be used as inventive marketing tools, particularly in remote regions of the country, where people might not otherwise have access to WTM’s messaging.
3.3.4 Distribution plan
An inventive direct delivery system will be implemented to address the widespread geography of the Maldives. Traditional points of sale strategically located throughout the island nation will be complemented by a sea plane and a dhoni (water taxi) retrofitted to transform them into mobile points of sale.
These mobile POS’ will be equipped with state of the art computer equipment and software. The mobile version of the POS will be branded in an identical manner to its fixed version, ensuring that the customer experience is the same. Connectivity will be based on our GSM network, SMS, and GPRS and EDGE features.
Each mobile POS installation will be connected directly to the main data centre via GSM modules providing an EDGE/SMS bearer to the mini-network installed over the marine or air borne platforms.
A typical mobile installation will feature terminals connected together in a ‘mini-LAN setup,’ with power provided by UPS and generators, or the plane’s main power supply. When the plane or boat is in reach of our network coverage, the GSM modules will automatically detect it and will signal that the POS system is functional.
Once in reach of the network, all transactions, whether activation, feature addition and any other provisioning will be relayed directly in real-time (GPRS/EDGE) or near real-time (SMS) to the main data centre where it will be automatically processed and executed by the billing system, prepaid platform, inventory management or by a customer care representative.
Such a mobile setup will provide a system that is identical in functionality to a ‘brick and mortar shop,’ while maintaining extreme mobility and reach throughout the Maldives, with the only prerequisite being availability of our network.
Figure 8 depicts the functionality of mobile POS’
WTM will also have its ‘flagship’ fixed POS in Malé. Four domestic airports exist in the Maldives: Hanimaadhoo, Kaadedhdhoo, Kadhdhoo, and Gan, in the Seenu Atoll which acts as a “secondary hub” to Malé International airport. These will form an important component of WTM’s distribution strategy. At present they are limited to receiving intra-national flights only. Their function is an important one, however, because these additional airports have flights to and from the capital acting as critical gateways and making accessibility from these points more realistic by both boat and air to the islands of the four most Southern atolls. WTM will place four fixed POS’ in close proximity to these airports to facilitate distribution of its products and services to potential customers throughout the Maldives.
Independent market research indicates that there is no official dealer network in the Maldives at present. This gap creates an opportunity for WTM to potentially establish its own additional channels. Service centres might, for example, act as dealers selling mobile phones, accessories, post-paid and pre-paid starter kits and prepaid vouchers. WTM will endeavour to establish relationships with dealers pending further investigation.
3.4 Risks
In order to formulate a marketing plan, WTM has had to make certain assumptions about the potential market for a second operator to provision a mobile telephony network in the Maldives. Independent market research conducted by Coleago Consulting has confirmed many of these assumptions. Even with a sound marketing plan there are inherent risks. One particular risk is that neither the market size, nor the speed of the subscriber’s uptake of mobile service occurs as planned. WTM is committed to providing affordable mobile products and services, and making them accessible to everyone in the Maldives. The company is confident that its value proposition and a solid management team has the necessary experience and operational strategic flexibility to manage an adverse change in the marketplace.
4.0 Technical Plan
4.1 Digital Technology Standard Selected
The selected digital technology will be Global System for Mobile (GSM) in the Maldives. A variety of data services will be offered and will enable customers to send and receive data at high speeds by using GPRS (General Packet Radio System) or EDGE (Enhanced Data Rate for GSM Evolution). Both of these functionalities will be available at launch.
The system will conform in all aspects to European Telecommunications Standards Institute (ETSI) GSM standards and the 3rd Generation Partnership Project recommendations (3GPP). 3GPP’ goal is to produce globally applicable technical specifications and reports for 3rd generation mobile systems based on evolved GSM core networks and the radio access technologies that they support.
The use of GSM will make it possible to provide superior mobile coverage throughout the country and to facilitate the use of value added services such as SMS, MMS and high speed mobile data services. Worldwide, GSM subscribers have exceeded the one billion mark covering more than 208 countries. Using GSM opens the door for both visitors to the Maldives and Maldivians alike to use their phones for voice and data as they travel. Since its inception GSM considered roaming as a cornerstone service and has created all the necessary standards that allow consumers to use their phones transparently wherever they go. Today with CAMEL 2 and CAMEL 3 standards being deployed, prepaid roaming and data services roaming have become available, and roaming has become a necessity as it allows people to be connected to their home and business wherever they are.
3G services will be launched as a commercial trial in Malé. UMTS technology will be utilised.
4.2 Spectrum Requirements
4.2.1 Spectrum selection
WTM envisages operating its GSM network in the 900 MHz band. This band will attain better coverage with fewer sites. The exact Frequencies required are:
Uplink 903 -915 MHz
Down Link 948-960 MHz
WTM would also like to request access to 2x15 MHz in the 2100 MHz band for 3G services. WTM prefers to get the lower frequencies of the 2100 band.
Uplink 1920-1935 MHz
Down Link 2110-2125 MHz
4.2.2 RF carriers
GSM divides the frequency band into channels spaced 200 KHz apart using FDMA techniques. Each of these carrier frequencies will be further sub-divided into time-slots using TDMA. Therefore, 12 MHz results in 60 channels.
UMTS uses 5 MHz wide channels, thus the number of carriers for UMTS will be 3.
4.2.3 Duplex mode(s)
In GSM, different frequency bands are used in the downlink than those used in uplink. This technique is called Frequency Division Duplex (FDD). UMTS also utilises FDD duplex mode.
4.3 Network and System Architecture
The following critical factors were considered in determining the design logic for the network: The Maldives’ flat terrain, its low density population, its scattered geography, and the distances separating the islands. All of these elements coupled with our independent market assessment make the use of non-conventional solutions feasible. Wataniya also underwent an extensive technology solution exercise suitable for the Maldives with suppliers and consultants to come up with the network design submitted in this bid where quality, availability, and innovation were kept in mind throughout the entire process.
4.3.1 Network architecture
Wataniya will deploy a network that is fully compliant with the most recent GSM standards and working groups. At the heart of the network is a mobile softswitch, an HLR, IN, and VAS subsystem. The mobile softswitch deployed can evolve into a 3G switch in month 18 to support UMTS with only a software upgrade. The radio access network will be deployed across all the inhabitant islands to secure the right quality of service, while the radio access network will be connected to four BSCs/PCUs distributed all over the country (North, Central, South and the far South). Transcoders will be co-located with the MSC to reduce the bandwidth required to carry the traffic back to Malé. Repeaters will be utilised in some of the locations to boost signal strength, therefore offering better coverage with less transmission requirements. To make available higher speed data rates than the limited speeds in standard circuit switched GSM, Wataniya will rollout GPRS/EDGE from day one. Subscribers will be able to connect to the internet through their handsets, PCMCIA cards or modems at speeds reaching 120 Kbps with the right handsets, under the right conditions.
Node B stations will be distributed in different locations in Malé to secure UMTS coverage for the city. All node B stations will be connected to the RNC which in return will be connected to the softswitch in Malé.
Figure 9 shows a high level network architecture diagram:
The radio network plan makes extensive use of advanced computer based planning software. The Primary planning suite of software in Planet®EV is manufactured by Marconi Limited of the United Kingdom. Planet®, which is UNIX based, is the industry leader in this type of software with deployments world-wide. Planet® and Planet®EV are best-of-class network planning software solutions which leverage the proven RF engineering functionality of Marconi’s extensive development team and deciBel Planner®. It provides advanced RF network modelling and produces robust BSS designs based on critical performance targets. Wataniya has purchased high definition electronic maps and vector/clutter databases of the Maldives islands, and have completed a comprehensive series of radio designs.
Figure 10 illustrates the radio access network
Radio Capacity Calculation
Using the outgoing and incoming minutes assumed in the market study the Erlang per Subscriber was calculated.
All capacity calculations have been made based on Full-rate coding. Half-rate coding has not been taken into consideration. As a result the Erlang per subscriber is 22 mlErlng in the first year, declining to 21 mlErlng in the second year and then stabilizes at 20 mlErlng in the following years.
The assumed minutes take into consideration the effect of the traffic generated by roamers, normalizes them and re-allocates them to the subscriber minutes of use (minutes per roamer multiplied by the number of roamers per month /number of subscribers). The following table explains how the calculations were made.
Year one Traffic Model Calculations:
Table 11
Outgoing and incoming Minutes of Use 196 min
Minutes generated by Roamers 43 min
FOC Minutes (Emergency Recharge) 2 min
Total minutes/Month/Subscriber 241 min
Busy Hour Call Attempt 1
Daily MOU/Subscriber 8.03 min
Busy Hour traffic is assumed to be 15% in Seconds 72.2 sec
Mean Holding time= Talk time + Ringing time assumed 5 seconds 77.27 sec
Erlang = MHT*BHCA/3600 22 mlErlng *
* Exclusive of Data traffic. To include Data traffic an extra 10% was added.
Radio Subsystem
A total of 122 cell sites with 30 repeaters will be required to cover the whole area (resulting in 95.7% population coverage), and address the capacity needs in urban and residential areas. The driver of the number of BTSs is coverage rather than capacity. The BTSs will be connected to 4 BSCs/PCUs which in turn will be connected to Transcoders co-located with the MSC and the packet core network.
Current candidate cities for the four BSCs are
• Kulhuhuffushi
• Malé
• Fonadhoo
• Hithadhoo
Four Node B stations will be connected to an RNC in Malé which in return will be connected to the packet core network. Since 3G will be launched on a commercial trial basis no capacity calculations were taken into consideration.
Design Assumptions
The network designed will operate in the 900MHz GSM band. The following traffic model parameters were considered:
• Erlangs per subscriber: 22 mErl/sub in the first year going to 21 in the second year and to 20 mlErlangs onwards
• BHCA: 1.0
• A-interface GoS: 2%
• GPRS/EDGE: 20% penetration of subscribers
• GSM 900MHz 60 channels
• UMTS will be available only in Malé
The following are the assumptions made:
• Antenna height @ 40-50m
• For remote villages with subscriber capacity of less than 500, coverage would be provided using repeaters.
• All sites of high configuration such as 4/4/4, 5/5/5 and 6/6/6 are assumed to be in major cities.
• All BTS configurations offered are EDGE enabled.
WTM plans to deploy BTSs and BSCs that are expandable when the traffic increases by adding extra TRXs or processor cards, the same network element will be able to carry more traffic, thus reducing the lead time for any capacity expansions.
Modulation Techniques
In addition to traditional voice services, WTM will roll out high speed data services for all subscribers using EDGE. While GSM standard depends on GSMK (Gaussian minimum shift keying) modulation for voice, EDGE uses 8PSK (8 phase shift key) modulation. If a subscriber uses his/her handset to make a voice call GSMK will be used. Once attached to use EDGE the modulation technique will be 8PSK. A critical factor in determining the type of modulation in case of data transfer will be the type of handset used.
UMTS uses Quadrature Phase Shift Keying (QPSK) Modulation.
Channel Access Protocols
GSM uses the following Channel access protocols:
• Random Access Channel (RACH): Used by the mobile to request access to the Network
• Paging Channel (PCH): Used to alert the mobile station of an incoming call
• Access Grant Channel (AGCH): Used to allocate an SDCCH to a mobile for signalling (in order to obtain a dedicated channel) following a request on the RACH
• Broadcast Control Channel (BCCH): This channel continually broadcasts on the downlink information, including base station identity, frequency allocation, and frequency hopping sequence
• Frequency Correction Channel (FCCH): Used to synchronize the mobile to the mobile to the time slot structure of a cell by defining the boundaries of burst periods, and the time slots numbering
Bit Rates and Data Speeds
WTM plans to deploy GPRS/EDGE both on the RF and the core from day one.
Data speeds are dependent on many factors including:
1. Handset Types (coding schemes)
2. Number of timeslots supported for uplink and downlink in the handset
3. The quality of the signal received by the subscriber at the point of connection
Based on the subscriber demand, which will be monitored through deployed network performance tools, the numbers of dedicated time slots on the RF carriers will be upgraded to guarantee proper user experience while using wireless data application.
In real live data transfer, speeds will decrease by 15-20% at the boundaries of a cell site. In certain cases the drop in these rates can reach up to 50% if the coverage is very weak. As a rule of thumb: the higher the coding scheme the more sensitive it is to signal strength. Mobility affects GPRS/EDGE data speed when the handover occurs. 3GPP standards R97 allows for the following outage durations when a subscriber goes through one of the following Handovers:
• Intra PCU Handovers 0.7 seconds: This is the most common handover (85% of the handovers happen within the service area of a PCU)
• Inter PCU 5-7seconds: This kind of handover does not exceed 13% of the total HOs.
• Inter SGSN : This kind of handover can last for up to 15 seconds, but does not exceed 2% of the handovers
In the Maldives the Inter PCU and Inter SGSN handovers will not actually occur since only 1 SGSN will be deployed, where handovers between PCUs is not possible due to the geographical restriction when people move from one PCU area to the other.
Theoretical data speeds for the different connections are listed in the table below / time slot:
Table 12
Tech/Coding scheme Theoretical data
speeds in Kbps Expected Practical speeds in Kbps
GPRS CS1 8.0 7
GPRS CS2 12.0 10
GPRS CS3 14.4 12.2
GPRS CS4 20.0 17
EDGE MCS1 8.4 7
EDGE MCS2 11.2 9.5
EDGE MCS3 14.8 12.5
EDGE MCS4 17.6 15
EDGE MCS5 22.4 19
EDGE MCS6 29.6 25
EDGE MCS7 44.8 38
EDGE MCS8 54.4 46
EDGE MCS9 59.2 51
For UMTS the expected speed per time slot is 384 Kbps in good coverage spots. As the signal strength drops around the boundaries of the UMTS cells (Node B) data transfer speed could drop to 64 Kbps.
Speech Coding Technology Used
GSM allows for a number of fixed-rate-CODECs that are switch able at the BTS depending on the customer handset type and capability. Three CODECs are currently on general release: Full-rate (FR), Enhanced Full-rate (EFR) and Half-rate (HR). The two variations of full-rate CODECs allow for a maximum of eight traffic channels (Tchan) per RF carrier, whereas the half-rate CODEC doubles this to a theoretical 16 Tchans. However, not all carriers or timeslots can be allocated for HR operation, and this additional capacity is not required all the time. There is a slight degradation of perceived voice quality using HR CODECs compared to EFR. Thus the capacity plan allows for the dynamic allocation of Tchan to either EFR or HR depending on the traffic conditions of each cell. When an individual cell reaches 50% Tchan allocation it will immediately allocate all new Tchan allocations to HR CODECs. When traffic reduces, then new allocations will return to FR. In this way the system dynamically allocates the correct CODEC type based on the handset and the instantaneous traffic being experienced by the cell. All handsets manufactured since the year 2000 are capable of EFR, FR and HR operation by dynamic control of the BTS. If an older FR or EFR only handset attempts access the network these are allocated a full rate CODEC unconditionally.
Spectral Efficiency
The frequency plan allows for the use of the entire sub-band of 12 MHz duplex which will be arranged across the cell plan in two further sub-divisions. The primary non-hopping layer will form the BCCH and base SDCCH access layer to provide the greatest protection from intra-system interference for this critical layer.
A hopping layer frequency plan sub-band will be superimposed to provide traffic capacity by enhanced re use of GSM channel frequencies. The re use characteristic of the non-hopping layer will be according to the general seven cell repeat pattern, while the hopping layer will conform to a modified three cell repeat pattern using non-orthogonal frequency hopping algorithms. The BTS system supporting the hopping algorithms will be synchronised using duplicated GPS receivers at each BTS site as a sync-source. In this way the finite national resource of RF spectrum can be used and re-used with great efficiency. The current traffic forecast and user traffic estimates show that this frequency plan and re-use strategy will not require any further spectrum allocation for the number of subscribers projected in the marketing plan.
Core Network Topology
Given that Dhiraagu has limited interconnect to exchanges in Malé, traffic forecasts show that 90% of the traffic will have to be routed back to Malé. Thus a central MSC with trans-coders next to it will be installed at WTM’s Malé central office. A distributed switching approach can be adopted in the event that Dhiraagu is willing to interconnect in different regions.
WTM plans to deploy a soft mobile switch in the Maldives. Utilising a softswitch will enable the following:
• The MSC will be 3G ready with software upgrade
• Softswitches inherently support distributed switching in the event that Dhiraagu interconnects with WTM outside Malé for either fixed or mobile WTM will be able to collocate a media gateway next to Dhiraagu’s exchanges, thus reducing the amount of traffic that travels back to Malé
• The softswitch can evolve to become the IMS server without additional capex, WTM’s network will be IMS ready
• All Legacy circuit switched services are self supported
• Supports all traditional protocols besides the IP interfaces
• A well proven technology, the system has been deployed in GSM and CDMA networks with operators having 5 million plus subscribers
Figure 11 illustrates a high level architecture of the softswitch:
Interface Protocols between the core network elements:
Table 13
MSC-PSTN C7 or R2
MSC-IN CAMEL phase 2 & 3
MSC-HLR MAP
MSC-SMSC MAP
MSC-BSC Standard A-Interface
SMSC with Content Providers SMPP
SGSN with HLR Gr
GGSN with HLR Gc
RNC with MSC (UMTS) lu-CS
RNC with SGSN lu-PS
IN features and capabilities
The IN forms an integral part of the core Network. A feature rich IN will enable WTM to offer the right services and packages for the different market segments. WTM plans to offer a wide portfolio of services to the Maldivian people independent of their payment method (post-paid or prepaid) with different charging principles (Volume, duration, event, content etc). Such offerings will only be possible by deploying with the right real time rating engine.
Following is a list of some of the key features that will be available at launch:
o Standard Voice charging for local and roaming subscribers through CAMEL phase 2, including prepaid roaming
o Volume charging for Data access for local subscribers through CAMEL phase 2
o Event charging for SMS content, SMS MT etcetera will also be supported
o The deployed IN system will be able to charge subscribers by any duration increments down to 1 second increments
o Customer balances will be maintained in units of money, minutes or units mapped to events
o Charging will have the following flexibilities:
Depending on the destination (dialled digits)
Time of the days
Day of the week
Public holidays (programmed in the system)
Subscriber package
o The following calling features:
Call waiting/hold
Parallel calls
Call forwarding
Toll Free numbers
FOC Emergency numbers
o The IN will interface to a voucher management system that will allow the subscribers to refill their balances through printed vouchers that they can buy from the market with different face values and different validity periods, or by electronic charging.
By the end of 2005, Wataniya will upgrade to the next release that will support the charging of all IMS planned services and CAMEL phase 3 which will allow the charging of GPRS/EDGE services for roamers.
Core Network Expandability
At launch Wataniya plans to commission a core network that supports over 110,000 subscribers on all core network elements. All network elements will be expandable either by SW or HW upgrade. HW upgrade will be conducted by the addition of new boxes and expanded links rather than a strip out of old HW. The core network will be designed to handle 110,000 subscribers based on the following assumptions:
Table 14
Total Subs 110,000 SUBS
Mean Holding Time 77.27
Erlang / Sub in BH 22 Erlang
Grade Of Service (GOS) 1%
C7 signaling load (Erl) 0.2
IMSI attach per sub, per hour 0.5
IMSI detach per sub, per hour 0.5
Inter-MSC handover per sub, per hour 0.02
MSC Capacity in Erlang 3500 Erlang
The following figure shows the building blocks of the core network:
Figure 12
Value Added Services (VAS) subsystem
An integral part of Wataniya’s marketing differentiation strategy is to offer a diversified set of data applications to Maldivian customers.
Figure 13 depicts the planned architecture for the VAS subsystem:
General information on the VAS Platforms:
The VAS network architecture and the used platforms are designed in a way that:
• Offers VAS to the entire customer base prepaid and post-paid
• Provides enhanced billing capabilities for the offered VAS
• Enables In and Out bound roamers to use VAS through GPRS, EDGE, and MMS roaming
• Easily activates and configures VAS on the user equipment process through the Over the Air Platform (OTA), and automatic device configuration that will allow fast and easy access to the VAS services
• Offers Single Sign On mechanism to allow customers to switch between services without the need to re-enter user name and password
• Offers third party standard (SMPP, MM7, and XML) interfaces that allow application developers, content providers to add to the value chain.
• Uses optimization techniques in the core packet network to increase the efficiency of the offered bandwidth
• Offers new innovations like Media Streaming, Push To Talk, and Wireless LAN
The VAS platforms used have the following characteristics as Network Grade elements:
• Highly reliable and available system architecture The servers used are intrinsically fault-tolerant and use industry-proven architecture that provides high system reliability and availability.
• Fault tolerant platforms Any single failure is handled transparently by the platforms. To fulfil this level of reliability, the systems include many levels of redundancy, especially in front end servers that are handing the call processing, and SS7 links. If a hardware component fails, the system is engineered to enable the takeover component to handle its own traffic as well as the traffic it incurs as a result of the failover even during peak busy hours.
• Mirrored Disks Seamless data mirroring. If one disk should fail on one of the servers, the operating system automatically fails over to a specified mirrored disk.
• Scalability The software and hardware architectures are extremely scalable.
• Interoperability Wataniya understands that interoperability is critical to the success of any Value added services. All the VAS platforms will be from leading vendors where interoperability for all the platforms has been verified. Platforms used should be compliant with the relevant standardization including 3GPP, OMA, and 3GPP2.
The Packet Core Network
In the packet core network an Enhanced-GGSN will be used to support:
• Single Access Point Name (APN): Customers will be able to access all GPRS/Services using a single APN i.e. without the need to make different configurations on their handsets for different services.
Flexible bearer charging:
• Using the Enhanced GGSN, different charging models will be offered based on the type of services. This makes it easier to the users to understand how they will get charged on each service.
Examples of the enhanced billing capabilities are:
• Time, event, flat fee, and/or volume based billing
• Content based charging
• Common Pre-Paid and Post-Paid deployment
• Real-time prepaid charging
• Support roaming services with roaming awareness (no double charging for volume and event based for roamers)
• IP Service & IP Flow Charging ( Applications, Protocols and Ports)
The Optimizer Server
The optimizer server reduces the size of downloaded data hence it maximizes the performance and provides the best user experience on the used bandwidth either on GPRS, or EDGE. The packet core network will enable corporate and SME connectivity for wireless office applications.
For corporate users and business applications different methods of connectivity will be possible like IPSec VPN, L2TP, and Leased line.
The Packet network will also support different security and authentication mechanisms:
• Enhanced RADIUS/DIAMETER support
• Support access control
• Support access restriction
• Support flexible authentication and authorisation methods (user/corporate in case of corporate connections)
The Messaging Platforms:
Messaging platforms include the Short Messaging Service Centre (SMSC), the Multi Media Messaging Service (MMSC), The Instant Messaging Server (Chatting), and the Mail server.
SMSC:
• The Short Message Service Centre (SMSC) provides SMS functionality to the subscribers. While this facilitates ease of use in a non-voice mode, it supports privacy and ease of operation.
• The SMSC offers short messaging, and voice mail/fax notification to the same handset that subscribers use every day for making calls. These services are the foundation for a number of applications that will be provided to WTM customers through Wataniya, as well as through third parties.
• Message input is supplied via a number of methods including Operator Assist, PC based (WWW, E-mail), Local Message Terminal, mobile-originated, or forwarded by a 3rd party application.
MMSC:
MMS enables the user to send a combination of text, sounds, music, images, and video, in a single message for display on virtually any MMS compliant handset. MMS enables many new applications such as information services, games, entertainment, and location-based services.
• The MMSC supports composition of MMS messages via a WEB interface, and it provides legacy support (notifying a non-MMS capable mobile through SMS that an MMS message has been received. The user will receive a unique id to access the message via a Web interface.)
• The MMSC solution will include a Transcoding Node as an external server which supports conversion of MM content into common image formats. The Transcoding Node provides conversion for Internet users to mail pictures to MMS users.
• The MMSC supports an off-board permanent storage album (Photo Album). Photo album supports viewing, deleting, uploading, and editing of images. The user can upload images from a handset to the permanent storage space using a short code technique. Users can easily manage their album via a Web based interface.
Messaging Gateway (GW):
• The messaging GW provides interoperability between value added service providers (VASP) and the SMSC, and MMSC.
• The messaging gateway will support SMPP, MM7, and http interfaces
• Interoperability for SMS messages between Code Division Multiple Access (CDMA), Time Division Multiple Access (TDMA), and Global System for Mobile (GSM) communications, and General Packet Radio Service (GPRS) networks will be provided.
• A SMTP Gateway will be used that will enable services like MMS to e-mails.
• Both the Mail server and Chatting server will have interconnection with MSN, and Yahoo where users will be able to stay online while away from their computer.
The Content and Portal Platforms:
• WTM will be offering multimedia content from day one. A Content Download Platform (CDP) will be used for storing and distributing content offerings. The content includes: images, sounds, ring tones, Java games, pictures, and video streaming
• Different types of formats for the different types of content will be supported
• The content will be managed through the Content Management System
• To manage the Menu and ‘look and feel’ of the Mobile Portal a rendering engine, assembly engine, and menu manager servers will be used
Streaming Server:
• Video streaming will be offered to Maldivians as one of the EDGE applications. With the bandwidth offered by EDGE technology and the coding used by the streaming server, live as well as on demand streaming content, will be attractive to customers
Over the Air Platform, and Automatic Devise Configuration:
• An OTA server will be used to manage the device configuration over the air. An automatic device configuration mechanism will be used so that the user’s GPRS/EDGE capable handset will be configured automatically enabling use of the offered services immediately
Voice Value added Services:
• Wataniya will offer the following services through its Softswitch: Call Hold, Call Waiting, Call Forwarding, Conference Call, Calling Line Identification/ Restriction /Ignore Rest (CLIP/R/I)
• Unified Messaging Services will be offered through a UM server that will give voice mail functionality, and missed call alerts
Push To Talk
• The VAS proposal includes Push-to-Talk service. A Push-to-Talk over Cellular (PoC) solution is provided to support this service through a flexible IP-based VoIP server platform
• The provided platform supports GPRS/UMTS and W-LAN access
• It is built in a modular fashion with a disaggregated architecture that de-couples call control functions from bearer traffic functions
• The PPT server platform supports existing IETF, OMA, 3GPP and 3GPP2 standards and aligns with future 3G-network/IMS evolution paths
The planned solution supports the following types of calls:
• Instant Personal Talk also known as one-to-one barge calls or private calls dialled from the directory. A barge call is one where the originating callers voice is immediately provided to the terminating mobile(s) handsets and played out through the mobile phone earpiece or speaker
• Ad-Hoc Instant Personal talk, similar to the above but dialled from the keypad,
• Instant Group Talk also known as one-to-many barge calls or group calls dialled from the directory
• Ad-Hoc Group Talk, where buddies and groups are selected to create a group list for the call
• Instant Personal Alerts also known as Alert Calls. An Alert Call is when the originator wants to inform the target that communications is desired but wants to ensure that the target is willing to participate in the communications
• Display the presence state (registered, not registered, user selected) for each of the buddies and groups in the subscribers buddy list. A group is marked as present if any of the members of the group are present
The PTT solution is a Packet Switched based solution that is overlaid on top of the GPRS/EDGE IP network, using the same Radio Access Network (RAN), Core Network (CN), and GPRS Serving Network (GSN)
The platform includes:
• Control Switch – The Control Switch (CS) is the main PoC call processing element. It performs the SIP call processing, talker arbitration (floor control) and media duplication for all PoC calls. The Control Switch connects to the GGSN (GPRS).
• Active Directory – The Active Directory (AD) stores the subscriber provisioning information, buddy lists, group lists and settings for all subscribers in the system. The Control Switch queries the Active Directory for subscriber information during the registration process and, when necessary, during the call setup process of subscribers registering for PoC service for faster call setup times between locally registered users
4.3.2 Mobile equipment
Handsets with the following power levels will be supported in the network:
Table 15
Class
Power Level
Class 1 1 watt
Class 2 8 watts
Class 3 5 watts
Class 4 2 watts
Class 5 0.8 watts
For data transmission, the following handsets/PCMCIA card classes will be supported:
Table 16
Class A Supported but treated as Class B
Class B Supported
Class C Supported
All GPRS coding schemes from CS1 to CS4 and EDGE coding schemes from MCS1 to MCS9 will be supported so handsets, PCMCIA cards/modems from any class using any coding schemes will be able to attach and use the network. During the UMTS commercial trial in Malé WTM’s technical team will conduct a comprehensive UMTS survey, test, and publish the results to customers.
4.3.3 Quality of service
System Performance Metrics
The network will meet or exceed the best-in-class performance targets for coverage, service delivery, and capacity worldwide. The following table shows the headline performance targets used in the network design:
Table 17
Service area (urban) 95% in-building
Service area (suburban) 95% in-street
Voice GoS 2% Erlang B
Call success rate 98%
Call failure rate (drop) 1.0%
Handover success rate 98%
Post-dial-delay < 10 seconds*
SMS success rate 98%
Signalling path GoS 0.1% Erlang B
Network availability 99.997%
*Provided that there is no international leg in the call, in that case it would be dependent on factors outside Wataniya's control
Network Availability
The table below shows the design availability performance of the main network entities and links in comparison with industry norms:
Table 18
Availability %
Industry Norm %
Signalling links 99.998 99.997
Traffic links 99.995 99.996
MSC 99.997 99.996
HLR 99.998 99.998
IN 99.997 99.996
BSC 99.95 99.9
BTS 99.6 99.6
* Critical Paths between the media gateway/BSC locations will be backed up with Satellite links that have availability of 99.99%
Error Rates
High network availability was kept in mind while WTM was designing the transmission links. As a result all critical Microwave links which, due to climate and distance, do not perform up to standards of the ITU’s acceptable SESR rates were backed up in the following ways:
1. Space Diversity (1+1) links were deployed
2. Satellite earth stations back up the most critical links
Before redundancy occurs the weakest link in the network will have a 1.3x10-5 SERS.
4.3.4 Network dimensioning
(Maps followed by network dimensioning spreadsheet contained in Annex 7.9)
Based on the BSS design a transmission network design was completed to address the following parts of the network:
1. Intra BSC area transmission: for all links that exceed 15 Kilometres 1+ 1 redundancy was built in using space diversity. In certain cases where the links were shorter than 15 kilometres but the links carried higher number of sites a 1+ 1 redundancy was built in using space diversity.
2. Transmission between the BSCs and the MSC: All BSCs with the exceptions of BSC4 (due to long distances in the water) used microwave and satellite links as backup. The following redundancy criteria was built in:
a. Links that exceed 15 Kilometres 1+ 1 redundancy was built in using space diversity.
b. Wherever the links were shorter than 15 kilometres but the links carried a higher number of sites a 1+ 1 redundancy was built in using space diversity.
c. Satellite backup links with enough capacity to carry all the BSC traffic back to the MSC in case the microwave links were down
When constructing the frequency plan for the BSS system(s), full account was taken to minimise co-channel and adjacent-channel interference within the re-use plan. The plan makes full use of non-orthogonal frequency hopping, uplink power control (system based), down link power control (MS requested) and discontinuous transmission (DTX).
4.4 Network and Service Implementation and Development
4.4.1 Network and service implementation table
WTM’s network design and roll-out will deliver a feature rich GSM system operating in the 900MHz frequency. From network launch, the full range of GSM defined circuit based voice, packet data services (GPRS, EDGE) and supplementary services and features will be provided throughout the service area. GSM service will be available for all subscribers in the whole country fulfilling the 42 months license requirements in 6 months.
Table 19
Start of Operation GSM Service Area
6 Months Malé, Airport, All Inhabited Islands & Resorts in Kaafu Atoll, Alifu Alifu Atoll & Alifu Dhaalu Atoll.
All Inhabited Islands & Resorts in Vaavu Atoll, Meemu Atoll, Faafu Atoll, Dhaalu Atoll, Thaa Atoll, Laamu Atoll.
All Inhabited Islands & Resorts in Lhaviyani Atoll, Baa Atoll & Raa Atoll.
All Inhabited Islands & Resorts in Noonu Atoll, Shaviyani Atoll, Haa Dhaalu Atoll & Haa Alifu Atoll.
All Inhabited Islands & Resorts in Gaafu Alifu Atoll, Gaafu Dhaalu Atoll, Gnaviyani Atoll & Seenu Atoll.
Month 18 UMTS Commercial Trial Service Area
Malé and the Airport
4.4.2 Coverage maps by coverage target dates (Maps are provided)
WTM has extensive experience and a proven track record in rapid network deployment in Tunisia, Iraq, and Algeria. This is an achievement, especially considering the difficult situation in Iraq. As a result and after a careful review of the required time to rollout the service, WTM strongly believes that a high quality service network can be installed and commissioned in six months. The following steps will be taken to ensure quality and a timely rollout:
• Finalizing the network design and plan prior to license issuance
• Selecting network suppliers ahead of license issuance
• Setting up agreements with multiple Civil Works Contractors to ensure parallel build up
• Starting rollout as soon as the license is signed by TAM
• Trying to reach a satisfactory agreement with Dhiraagu on site sharing to minimize rollout time
• Utilising experienced rollout project mangers in the four different regions to make sure that the rollout is according to plan
4.4.3 Calendar of activities
Table 20
Area @ Month 6 BTSs BSCs MSC/HLR IN VSAT Capacity in subscribers Total Erlang
Noonu Atoll, Shaviyani Atoll, Haa Dhaalu Atoll & Haa Alifu Atoll, Lhaviyani Atoll, Baa Atoll & Raa Atoll. 45 1
(BSC1) 0 0 1 13,582* 398
Malé, Airport, Kaafu Atoll, Alifu Alifu Atoll, Alifu Dhaalu Atoll. 31 1 (BSC2) 1/1 1 1 15,800* 457
Vaavu Atoll, Meemu Atoll, Faafu Atoll, Dhaalu Atoll, Thaa Atoll, Laamu Atoll. 28 1
(BSC3) 0 0 1 6,995 205
Gaafu Alifu Atoll, Gaafu Dhaalu Atoll, Gnaviyani Atoll & Seenu Atoll.
18 1
(BSC4) 0 0 1 8,002* 235
Total 122 4 1 1 4 44,500* 1296
*To reduce risks and increase the quality of the radio network, capacity has been calculated with 25% mobility factor, thus provisioning for any sudden move of the subscriber from area to another
Commercial trial of UMTS will commence in month 18 after launch. The following network elements will be commissioned in Malé for the trial.
Table 21
Area @ Month 18 Node B RNC MSC/HLR IN
Malé, Airport 4 1 Upgrade to UMTS version Upgrade to UMTS version
Total 4 1 1 1
4.5 Coverage Plan
By innovative design Wataniya’s network will ensure:
• High capacity and expandability that will allow straightforward and seamless expansion of network capacity and coverage. A minimum six month build-ahead margin (headroom) will be deployed from the inception for all main network entities based on the customer forecast.
• High quality of service, by deploying network resources to meet the defined QoS requirements of the bid and ETSI whichever is higher
• High availability, by providing redundancy in terms of key network equipment and duplication of traffic routes (where possible). The table below shows the basic theoretical link model used for calculating the cell performance of the urban area. The same process was used to produce cell performance figures for the remaining three terrain types.
Figure 14
The initial design done provides for indoor and deep indoor coverage in the dense urban and residential areas. Wherever coverage is not appropriate after rollout the following measures will be taken:
• Micro cells will be installed to enhance both the coverage and the capacity
• Band Selective Repeaters will be installed in areas where the coverage is weak but the capacity is sufficient
• Optimization teams will continuously tune the network parameters, adjust the antennas tilting, and ensure that additional measures necessary to deliver the right grade of service are taken
Different types of the antenna configuration will be used for urban, suburban and rural areas of the Maldives. Initially, for Malé (urban, suburban) areas, the antenna configuration listed below will be used. As a network is dynamic it will continue to evolve.
Urban Areas Antenna
Table 22
Band Electrical Down-tilt Gain Horizontal Beam-width Vertical Beam-width
900MHz 0 15.5 dBi 65 15
900MHz 6 15 dBi 65 15
Rural areas & Highways Antenna
Table 23
Band Electrical Down-tilt Gain Horizontal Beam-width Vertical Beam-width
900MHz 0 17 dBi 90 6.5
Indoor Sites Antenna
Table 24
Antenna Type Band Gain Horizontal Beam-width Vertical Beam-width
Omni Antenna Dual Band 2 dBi - -
Panel Antenna Dual Band 7 dBi 90 65
Bidirectional Antenna 900MHz 5 dBi 65 -
All base station radio transmitters will be fully compliant with GSM standards and recommendations in terms of frequency stability and spurious emissions. In all cases the following transmitter performance specifications will be adhered to strictly:
Table 25
Specification Performance Limit
Maximum Transmitter power (taken at the Ae output flange) 42dBm (max)
Frequency Stability 0.05 ppm
Spurious Emissions (Taken at the Ae output flange) Less than -98dBm
Adjacent Channel power (Taken at the Ae output flange) Less than -60dBm
To ensure the fastest roll-out possible, maximum use has been made of computer based planning tools coupled with the expert knowledge of engineers who have extensive experience in GSM cellular design. The Service Area QoS plan has been optimised to meet or exceed the requirements of the people of the Maldives. As the final access path is a radio link, it is not physically possible to guarantee 100% link availability due to propagation conditions. However, the following performance models have been developed and the corresponding radio link budgets calibrated.
Table 26
Cell Type QoS Performance Average cell radii range
Urban Cell 95% QoS * to a class 4 handset in building. 1.2Km to 1.5 Km
Suburban cell 95% QoS * to a class 4 handset in street 5.2Km to 7.5Km
Rural Cell 95% QoS * to a class 4 handset in open areas. 12 Km
Road Cell 95% QoS *** to a class 4 handset in car using an in car adaptor (external antenna). 10.2 to 12 Km
*QoS is defined as the ability of a customer to originate, hold and correctly terminate a call due to signal conditions within the defined environmental type.
WTM will launch with 95.7% nationwide population coverage and intends to maintain this throughout the License term. The number of BTSs in the first year will be very high compared to the number of subscribers, since 90% of the sites will be coverage sites. These sites in general will not have all the TRXs slots populated and further capacity expansion will be conducted by adding TRXs to the BTSs if and when required.
The following table shows the coverage plan with the number of BTS’ for the first 10 years:
Table 27
Yr.1 Yr.2 Yr.3 Yr.4 Yr.5 Yr.6 Yr.7 Yr.8 Yr.9
Yr.10
No. of BTS* 122 124 126 128 130 131 132 133 134
135
No. of TRX 450 516 603 633 690 705 711 723 741
765
*This number does not include UMTS node B stations planned in Malé month 18 or any future UMTS network elements
Extra sites beyond year 1 are forecasted only for indoor coverage.
During the Planning phase potential site locations were identified. These locations were input into the Transmission planning tool which in turn generated the following output:
• Links Capacities
• Link Distances
• Frequencies
• Dish Size
• Antenna Heights
• Availability
Figure 15 depicts a high level transmission network:
This information is submitted as part of the dimensioning Excel sheet. The following six maps show the links paths from the BTSs to the BSCs and between BSCs and the MSC:
Figure 16
Figure 17
Figure 18
Figure 19
Figure 20
Figure 21
Figure 22 illustrates the connection of the BSC with the MSC:
4.6 Interconnection Strategy
Based on the Document distributed by TAM, interconnection with Dhiraagu will be possible only in Malé with the Fixed and the Mobile Switches. Accordingly, Wataniya will carry all the traffic on its backbone and then deliver it to Dhiraagu fixed and mobile switches in Malé
The signalling arrangements between the two networks will be on a trunk-level peer-to-peer basis with dedicated signalling paths between all inter-working exchanges and signalling points. The preferred signalling scheme is ISUP. Where ISUP is not available then other signalling arrangements can be considered (for example R2). Wataniya has significant experience in the rapid deployment of a large number of signalling schema including multi variations of ISUP and R2.
Based on the 10 year subscriber / traffic forecast the following table shows the number of E1s required for interconnect with each destination:
Table 28
Destination
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
PSTN + Int. traffic in Erlang 399.9
590.1
668.0
731.2
553.2
540.3
518.8
495.1
463.6
427.4
Other Operators in Erlangs 227.5
339.6
425.5
490.6
553.0
599.1
643.8
695.3
744.5
795.2
Wataniya in Erlangs 32.5
120.2
206.4
278.0
341.3
395.6
449.5
507.4
565.3
625.7
Wataniya International GW in Erlangs 0.0
0.0
0.00
0.0
212.3
244.9
267.7
282.0
306.3
331.6
Total Erlang 660
1050
1300
1500
1660
1780
1880
1980
2080
2180
No of E1 Required to/From
PSTN & International @ 001 GoS 20
30
33
37
28
27
26
25
23
22
No of E1 Required to/From
other Mobile operators @ 001 GoS 12
17
21
25
28
30
32
35
37
40
No of E1 Required to/From
Wataniya International GW @ 001 GoS 0
0
0
0
11
13
14
14
16
17
Traffic will be carefully monitored by both parties to make sure that the GoS does not degrade as traffic grows.
For interconnect reconciliation reports a comma separated ASCII file is to be used to exchange data with other interconnect partners, the following data should be in the record to be able to reconcile on a call level:
• A Party Number
• B Party Number
• Transaction Date
• Transaction Time
• Duration
• Point of Interconnect (POI)
• Truck In Name
• Truck Out Name
• Call Type (MOC, MTC, CF … etc)
• Service Type (Voice, Fax, Data, SMS, etc.)
• Data Volume
• Difference from UTC (for reconciling with partners on different or multiple time zones)
• Transit MSC
WTM will have its own office in Malé where the core and VAS network elements will be installed. Wataniya will work with Dhiraagu to establish the proper transmission links for interconnection. Although currently the interconnection points are only available in Malé, whenever it becomes possible to interconnect with Dhiraagu in different cities, WTM would like to share sites with Dhiraagu subject to them offering the right commercial conditions and flexible site access procedures.
Wherever site sharing is possible Wataniya requires:
• Equipment Space
• Sufficient Air-conditioning
• Power
• Ability to install a generator
• Sufficient Security and 24x7 access to employees
Wataniya will also commission it is own Air-conditioning system if Dhiraagu cannot offer sufficient ACs.
Interconnection of Value Added Services
Beside the basic voice service Interconnection WTM aims to have interconnection with Dhiraagu for all VASs whenever this is applicable. From the technical perspective all the systems used are according to the standards defined by ETSI, 3GPP, and OMA. All the services are deployed in a way that supports exchanging of charging information for the Inter-operator exchanged traffic. Whenever a new service is deployed commercial and technical agreements with Dhiraagu will take place to ensure the interoperability of the new services. Processes of interconnection charges and reconciliation will be developed and implemented accordingly.
From the list of value added services mentioned in section 4.3.3., the following services will be available for interconnection with Dhiraagu:
1- SMS.
2- MMS
SMS: SMS interconnection will be based on MAP signalling on top of C7. Seamless interoperability is anticipated.
MMS: As WTM uses standard based solution for MMS, seamless interoperability with other networks is achievable on the standard MM4 or MM3 interfaces over SMTP. The MMSC is compliant with the following releases for MMS as defined in 3GPP and OMA
• 3GPP TS 22.140 version 5.1.0
• 3GPP TS 23.140 version 5.3.0
• OMA MMS Enablers version 1.1
• 3GPP2
WTM could support both “message-based approach” MM4 Interface, or an “e-mail based approach” MM3 interface for MMS interconnects.
Push To Talk
Since the Push To Talk standard does not yet include the interoperability specification, interoperability will not be feasible in this phase. WTM envisages the implementation of an interoperable PTT solution when it is ready.
4.7 National Roaming
Since WTM plans to rollout the network nation wide at launch, with 95.7% population coverage, it does not envisage that it will need any national roaming to cover any gaps. Wataniya subscribers will be able to enjoy all services starting day one in all the required areas and the areas that are covered by Dhiraagu.
4.7 Site and Infrastructure Sharing
Wherever possible WTM will consider sharing infrastructure and facilities with Dhiraagu in order to:
• Reduce Rollout time
• Decrease CAPEX investment
• Protect the Maldives’ natural resources and preserve the environment
Based on the cost and sites access procedures agreed on with Dhiraagu Wataniya will consider sharing the following:
• Equipment Shelters
• Power lines extended to the sites
• Towers
• Leased lines
WTM would work on concluding a frame agreement with Dhiraagu that would form a guideline for case by case site sharing. It is believed that there will be direct financial and environmental benefit for the Maldives, and both companies, if proper site sharing agreements are concluded. In the event that such agreement is not reached Wataniya will rollout its own sites utilizing the agreements and experience gained from other operations. Such investments have been provisioned for in the business plan.
4.9 Confidentiality, Security and Other Measures
4.9.1 Confidentiality
Confidentiality, integrity and availability of a data strategy revolve around three key components in enterprise systems:
1) Privilege Management Interface system (PMI)
2) Public Key Infrastructure system (PKI)
3) Secure ID time based algorithm system
These systems will integrate with individual authentication and file system management schemes available in the LAN, Billing systems, Data Warehousing, Customer Care systems and all systems housing subscriber personal profiles and data as well as WTM proprietary information. The PMI system integrates with authentication platform and assigns access and view privileges. The combination of PKI, Secure ID and individual authentication systems provide for an advanced two factor authentication level and a non repudiation measure, as well as symmetric key encryption measures for user enforced confidentiality. The combination of all systems will apply a spectrum of access privileges, authentication levels and encryption measures to the following data repositories:
• Billing System data base
• Customer Service interface
• Data Warehouse subject areas
• Bill images repository
• SMS file repository
• Document archiving repository
Figure 23 illustrates WTM’s confidentiality measures:
4.9.2 Emergency services
WTM will offer free access to emergency services. This will include calls to police, ambulance, civil defence services, and any other emergency service organisations. Wataniya will work with the government to agree on the appropriate plans to assist in times of emergencies at the local, atoll or national level.
4.9.3 Call tapping
GSM as a standard has been designed with security/fraud control and privacy issues in mind. There are 3 different algorithms used in GSM for authentication and ciphering. All three algorithms will be implemented in Wataniya’s network in the Maldives. The following table explains briefly the algorithms and the level of security they provide:
Table 29
A3/A8 Used in the ciphering of the authentication keys exchanged between the SIM card and the authentication centre.
A5/x Used for the Ciphering of Voice between the Mobile Subscriber and the BSS part, X stands for the different variations that can be used depending on the export licenses that can arranged in the Maldives.
GSM also allocates a temporary identity associated with the IMSI (called TIMSI) to prevent a possible intruder from identifying the user by IMSI. Since this feature is part of the GSM standard it will be supported in the network.
4.9.4 Roaming services
Roaming will be one of the highest revenue generating services. Wataniya is committed to offering the largest number of roaming partners in the shortest possible time. This goal is achievable because WTM already has agreements with more than 250 operators in over 109 countries. This represents a good portfolio to choose from. Existing agreements will be extended to include ”Wataniya Maldives” as a new subsidiary within the Wataniya Group of operations. An amendment to the existing agreements will be required. Wataniya also has the technical setup in its subsidiaries to be used as “SS7 Roaming Broker”. With this large portfolio of partners, and these technical capabilities, Wataniya Maldives will be able to have the maximum number of roaming partners in the minimum amount of time, without the need to establish new roaming agreements, and without the need of providing dedicated end-to-end signalling links with each roaming partner. From experience in our operations, fast track end-to-end testing will take five days to complete. Table 30 shows launch phases for roaming.
Table 30
Phase Timeline Number of Operators Number of Countries Comment
Phase 1 2 months from network launch 25 6 75 % of tourists
Phase 2 6 months from network launch 85 27 96 % of tourists
Phase 3 12 months from network launch 185 Other Countries will be added depending on traffic -
Phase 4 18 months from network launch 250 Other Countries will be added depending on traffic -
WTM envisages that it will establish roaming agreements with the following countries: Italy, the UK, Germany, Japan, France and Switzerland in phase 1. According to WTM’s independent market research these countries represent 75% of inbound roamers, the highest number of tourists to the Maldives.
In phase 2 WTM will, based upon traffic, potentially establish agreements with countries including: Austria, Australia, Belgium, Canada, India, Korea, Malaysia, Portugal, Singapore, Thailand, the UK and the U.S.A
Countries and operators for phases 3 and 4 will depend on traffic, and agreements status.
4.9.5 Mobile number portability (MNP)
Wataniya will implement the onward routing call forwarding solution as a fast and cost effective method to initiate MNP. MNP capabilities will be ready with network launch.
This method will serve voice calls only.
Wataniya is also willing to explore, in conjunction with TAM and Dhiraagu, the development of MNP to include other non voice services, in a later phase (within 6 months of launch), using Intelligent Network, or Signal Relay Function.
With the first phase of MNP (Onward Call Forwarding) the CLI information associated with calls to ported subscribers will include both the CLI of the originating caller as well as the ported number called.
Wataniya is willing to work with TAM and Dhiraagu to find a workaround solution for inbound international calls to overcome the problems with the call accounting process.
All Operational Support Systems (OSS) will include a port indicator and other MNP functionality. WTM will develop the internal process for administrative records, procedures for final billings, collections, bad debt, interconnection contracts, and other information that may be required for MNP implementations. Wataniya is endorsing TAM’s suggestion to establish a small working group to:
• Agree upon actions required to implement the onward routing call forwarding solution as a first phase of Mobile Number Portability.
• Look at the Technical, Commercial, Legal, and Public Relations aspects of implementation
• Examine the future development of MNP to include non Voice services like (SMS, and MMS)
4.9.6 Directory services
Wataniya Maldives will offer directory services through:
• Operator Assistance
• Web Interface
• WAP Interface
The directory database for Wataniya Telecom Maldives customers will be established and maintained through the Operation Support Systems. As a part of the contractual process, information concerning the subscriber’s address, e-mail, and category (personnel, business, services, government, utility and so on) will be entered, and linked to the MSISDN.
In some countries the users have the option to keep their directory information confidential. Wataniya systems will support this option, but offering of this feature will depend on the telecommunication rules and regulations defined by TAM in this regard. To maintain this database the OSS will support online data modifications either from the call centre, or through WEB, and WAP interface for self administration. Security and authentication measures will be taken to ensure that only the MSISDN owner will be able to modify his information through the self administration tools.
For Maldivians to have the highest benefits of the directory services across the whole country, an interface should be established for directory enquirers between the existing operators (fixed, as well as mobile operators). This will enable Dhiraagu customers to make enquires about customers in WTM’s network and vice versa (both fixed and mobile). WTM is proposing to establish this database link with Dhiraagu. A mutual agreement should be developed to include the Technical, and Commercial aspects of such setup. In case the above option is not feasible, WTM will depend on local and international content providers to supply directory information for the different categories including fixed and mobile customers.
Database availability parameters: The available parameters will depend on the type of directory request. For personal directory assistance the following parameters will be available: MSISDN, Name, Address, and Profession. For business directory assistance the following parameters will be available MSISDN, Corporate Name, Service (hotel, banking, government).
Speed of Response: For Operators assistance calls at least 80% of the Calls will be answered in less than 20 seconds (i.e. Minimum Service Level will be 80%). Other means like Web and WAP the response will be instantaneous. To assure the quality of services the following measures will be taken:
1. Monitoring of call response time, and queuing to assure the service level.
2. Keep the information up-to-date (getting information from different national and international content providers)
3. Offer operators assistance in different languages for the roaming customers.
For the operator assistance enquiry the user will get the required information through the operator, an IVR, or SMS depending on the type of the information and the user preference.
Printed Directories:
Wataniya does not advise offering printed directories due to the following reasons:
• Mobile numbers are more personal and people might not like to have their numbers printed
• People might often want to change the confidentiality status of their number from secret to public and vice versa
• In case of printed directories, changing the status from public to secret, will force number changes which may be inconsistent with the customer’s needs
• Printed directories are also not common for mobile users.
• The frequency of changing mobile numbers is high. People change their line for a new offering, different tariff plan, churn, among other reasons.
However, if TAM perceives a special need for Printed directories or there are special applications in the Maldives, Wataniya will be ready to produce printed directories.
4.9.7 Environmental protection
WTM will be adhering to The Environmental Protection and Preservation Act of the Maldives (act 4/93), clause 5, which stipulates that an Environmental Impact Assessment (EIA) is mandatory for any new projects. WTM will work closely with the Ministry of Planning, Human Resources and Environment to determine the format, framework and guidelines of the EIA and intends to comply with any of its findings.
WTM is committed to the rules governing environmental related modus operandi for a mobile operator as detailed in the ISO 14001 Environment Management Standard. WTM realizes the importance of adhering to this standard as a corner-stone in its overall strategy to achieve maximum environmental protection for the Maldives. Given the valuable nature of the Maldives environment and the ISO standard already adhered to by the existing operator, WTM plans the following actions:
• Partnering with local authorities in order to identify the best solutions for blending aerials into the landscape by using fake chimneys, lighthouses, forestry lookout towers, pine or palm trees, etc
• Taking account of the ecosystem also means respecting local residents and their living environment during construction work
• Using non-vibrated concrete in order to reduce any potential noise pollution caused by its sites to dampen the noise produced by traditional concrete vibrating operations
• Utilising the passive air-conditioning system found in base stations which cools the apparatus without the use of conventional refrigerated air-conditioning systems. With this cooling technology, there are no moving parts to replace and no energy costs. There is also no power dependency or exchange of air for cooling
• Implementing ongoing environmental awareness programs, targeting employees, in areas such as waste reduction and material handling as part of WTM’s strategic plan
4.9.8 Health and Safety
The radio-communications equipment used in the technical plan is fully compliant with the guidelines defined by the listed internationally health and safety standards body. Also, WTM will install, manage and operate the radio-communication equipment in its network based on the technical radiation limits as identified by any of the below listed health and safety standards bodies if requested by TAM.
National Radiological Protection Board of the United Kingdom DOCS.NRPB, 4, No. 5 (1993)
Department of Health and Welfare Canada, Safety Code 6
Directives of the European Community, Directorate General V in Matters of Radio Frequency Electromagnetic Energy
Institute of Electrical and Electronic Engineers, IEEE C95.1-1999
National Council on Radiation Protection and Measurements (NCRP) Report 86
Verband Deutscher Elektrolngenieure of Germany (VDE) DIN-0848
WTM will use the Directives of the European Community, Directorate General V in Matters of Radio Frequency Electromagnetic Energy. However, if TAM has any specific preference for the successful bidder to comply with any other guidelines from the above listed bodies WTM will fully comply.
4.10 Network Operation and Maintenance Strategy
Wataniya will deploy both local and regional network management and control centres. The local centres will control and administer all network elements directly connected to their local MSC. The regional Network Operations Centre (NoC) will have the same control and monitoring rights as the local centres but will also be able to monitor and control interconnecting entities and common/regional network elements. The NoC will also have the ability to monitor the alarm and status condition of the network as a whole, and re direct resources and manpower in the event a local system is unable to recover from any unforeseen event.
Network operations centre
Wataniya Operations Centre (NOC) will continually monitor, maintain and optimise all network and system elements. The NOC will share the same premises as the CRM system and Customer Contact Centre to ensure that any network events that affect customers are communicated quickly. The NOC will be fully automated based on open standards platforms inter-working on industry recognised interfaces and protocols. Full digital mapping has already been obtained by Wataniya and network topology will be overlaid on this key data. This allows the NoC monitoring and control staff to have a single view of all the network elements and allow any remedial action to be deployed in the most effective and expedient fashion. Network performance charting will be maintained such that as far as possible network self-healing processes can be implemented within the first year of operation.
Network alarm monitoring and control
The NOC will monitor and display all network entities, traffic routes and performance data in real-time. Specialist algorithms will be deployed to manage performance and alarm information into groups for first-pass automated analysis. Multiple alarms will be quickly analysed into most likely root cause solutions. Monitoring and alarm panels will be further grouped into various alert levels to ensure that only information useful to the operator is in their direct field of vision and more detailed information is available on demand. In this way information overload will be avoided for this automated centre. Maintenance and repair teams will be called-out in response to automated processes or manual intervention.
The system will record and track alarms, network events, performance information and remedial action for later analysis and NOC optimisation. High level network information will be available to the CRM centre to ensure that timely network information can be given to customers. Network alarm extension is provided in the form of SMS alerts to senior personnel, web-based alerts to senior users within the company and LAN and escalated voice call-out to senior managers.
Network optimisation and reconfiguration
• The NOC will have read and write access to all network elements which are capable of control by electronic means. Network optimization and reconfiguration will be possible in near real-time based on performance analysis, fault mitigation and network expansion/evolution.
• Routine network optimization and planned reconfiguration will become an automated process. The NOC will have the ability to carry out certain levels of self-healing by linking the alarm and reconfiguration processes. For example, should a particular BTS fail the surrounding radio sites can be immediately re-configured to extend their service area as much as possible, directed re-try links removed and cells lists amended. This will ensure that customers experience the least amount of disruption to their service. When the failed BTS is recovered, the network will automatically be returned to its normal pre-failure state.
Network performance monitoring
• The NOC will continually monitor all performance parameters of the network and produce automated daily, weekly and monthly reports. These monitoring points will generally take the form of network counters and performance flags. This data will be input into a centralized network performance database to store all inputs in their raw form. Wataniya has developed core analysis routines and processes to convert this raw network performance data into succinct management reports and advanced operations reports. Further development of these analysis routines and processes will be ongoing by Wataniya in a process of ‘constant evolution’ to ensure that the network is being continually optimized based on the most recent performance information.
Maintenance Organisation
The maintenance organisation will comprise of two groups:
• NOC operators and Central Data Analysts
• Local Control Centre (LCC) administrators and maintenance/repair teams
• The NOC operators and analysts will be a central resource and will be located at the NOC centre. The NOC will be staffed continually using a shift and watch system.
• The LCC administrators, maintainers and installers will be located at all centres where an MSC/media gateway has been deployed. The MSC/media gateway site shall be staffed and local monitoring will be maintained on a 24-hour, seven day week shift system directly linked to the NoC. Maintenance will be carried out during an extended working day shift system (6 a.m. until 10 p.m.), with urgent repairs carried out on a call-out basis outside of these times. Maintenance centres and spare-part logistics will be strategically located so that any urgent fault on a BTS or
BSC will have an engineer attending within 45 minutes. The MSC site being permanently staffed will have a reaction time of less than 5 minutes.
• A key part of MSC/HLR and IN maintenance is the ability to connect the key platforms on line to the suppliers’ software support centre. In this way, immediately following any software malfunction or error, the suppliers’ expert staff can analyse the particular network element involved and action any necessary repair or patch. In the early months of the licence this will require a high quality international data connection between the MSC site and the supplier’s centre.
Network Overload Control
Wataniya has a standard build ahead procedure for all network elements based on marketing forecasts, measured traffic and collected statistics. Build ahead for the different network subsystems is as the following:
• Months for BTSs and short distance transmission links
• Months for BSCs & trans-coders
• 12 Months for all core network elements
• 12 months for back hall transmission elements
All network elements will be dimensioned with safety factors on top of the build ahead. Safety factors for the different network subsystems are as follows:
• Half rate is not taken into consideration while calculating the BTS capacity
• Mobility factor has also been added to the overall network capacity on all elements
• All core network elements have been dimensioned based on 75% of the total capacity
In the unlikely event of an overload the MSC invokes Call Admission Control (CAC) to maximise system throughput. The objectives of CAC are:
• To throttle incoming traffic when system resource utilisation is high so that the queuing delays are bounded
• To ensure call setup delays meet QoS requirements
Network Redundancy features
• All critical core Network elements (MSC, HLR IN, and SMSC) have built in resilience so that if one part of these elements fails the other parts will pick up the traffic carried by the part that failed without affecting the grade of service. BSCs also have built in resilience so that if one part of these elements fail the other part will pick up the traffic carried by the part that failed without affecting the grade of service
• Nodal Transmission links will be implemented as 1+1 redundant links, allowing for enough time to correct any issues without affecting the grade of service
• Since the terrain in the Maldives (all links are on water path) is quite severe, space diversity configuration is adopted for all links that are more than 15Km long
• Four Satellite links earth stations will back up all the BSC-MSC links to increase the availability of these critical links
Power redundancy
• All BTSs will be implemented with backup Batteries that can keep the BTS going for 4 hours in case of power loss
• BSC will be implemented with backup batteries that can keep all elements running for 8 hours, a backup generator with an automatic switching unit (ASU) will also be implemented at all BSC sites
• MSC and central office will be implemented with 12 hours backup batteries with a large capacity generator that has an automatic switching unit
Spare parts:
A detailed stock of spare parts will be available for all network elements. The spare parts will be stocked based on the Mean time between failure (MTBF) and in coordination with the suppliers, spare parts will be warehoused closely to the commissioned unit all over the country to reduce travel time and cut down outage times.
4.11 Numbering Plan
Wataniya confirms that the number plan utilised in the Technical Plans is in accordance with the National Numbering Plan of the Maldives as approved and regulated by TAM in the Mobile Number Portability document.
4.12 Risks
Technical:
• Interconnect with Dhiraagu and availability of ports for interconnect on time in the required locations: TAM as regulator should ensure that Dhiraagu does not act in an anti-competitive way. Wataniya will use the RIO document to negotiate with Dhiraagu, in order to guarantee the proper grade of service
• The positioning of Dhiraagu as a supplier for international minutes and as a competitor: TAM as regulator should ensure that Dhiraagu does not act in an anti-competitive manner. Wataniya will use the RIO document to address with Dhiraagu and guarantee the proper grade of service
• Lack of cooperation from Dhiraagu in terms of upgrading and expanding the links: WTM will generate monthly performance reports and monitor the links closely, with proper build ahead margins. Wataniya will always have time to escalate such acts to TAM
• Site Acquisition becoming a difficulty resulting potentially in increased costs: Maldivian employees will act as site acquisition agents. WTM will ensure that the radio design is flexible enough to change the location of the sites when required. Highest rent values were built into the business plan.
5.0 Customer Care and Billing Strategy
Customer satisfaction is a key element in the success of Wataniya in the four countries in which it has operations. Wataniya has developed and implemented world standard customer service centres that will also be implemented in the Maldives. Customer service will create job opportunities for Maldivian youth, through either direct face-to-face or over the phone customer service. Wataniya will make use of world class, advanced technologies to implement its service centres:
• IPCC: Based on CISCO’s VoIP world leading call centre infrastructure WTM will implement a multi-channel (Voice, Web, email) multi-skill inbound and outbound call centre
• CRM: A fully integrated CRM system automating all customer interaction points (Point of Sale, inbound, outbound calls, web, email etc.)
• Full fledged customer care experience will be available in mobile sea and air points of sales which will service potential customers in outlying regions of the Maldives
• Wataniya will utilize its backbone and the internet to connect its service points, and shops all over the country in order to offer consistent service to all customers independent of where they are
• A fully back-front end integrated/automated systems that supports prompt and accurate problem resolution
• Through the deployment of automatic detection, configuration and provisioning of the different devices with the different data services planned to be offered
Figure 24 depicts the IS architecture:
5.1 Customer service functions
• Wataniya has developed world standard service delivery processes and procedures that will be ready for implementation
• WTM will adapt business processes to fit the cultural and economic setup in the Maldives
• Customer Service Trainers that have long experience in Services will be hired to train Maldivian service representatives to guarantee consistent and above standard service delivery
• WTM plans to implement a convergent rating engine that will enable it to offer the same set of services to all customer whether the payment method is prepaid or post-paid
Existing processes include but are not limited to:
• Service Activation
• Service Modification
• Billing
• Payments
• Credit and Collection for Post-paid
• Handling of lost and stolen lines,
• Suspension/Reactivation of service
• Service Termination
• Product development and launch processes
WTM’s standard of excellence in customer care focuses on four key values:
Quality
WTM places a great emphasis on the customers’ experience when interacting with WTM staff. WTM will achieve target quality of service by conducting continuous training sessions involving the customer care staff. Additionally, a continuous random and targeted monitoring of our customer facing staff will be conducted to assure a uniform standard and guide the elevation of quality.
Credibility
WTM’s system design emphasizes the consistency and integrity of the data exchanged with the customer. The objective here is to present the customer with the same look and feel, the same features and the same quality of service, independent from the media used to interact with our customer care systems and personnel, whether through IVR, internet/WAP, voice, automated or manual.
Availability
The continuous availability and speed of delivery of customer care instruments are paramount when it comes to our customer care minimum baseline. WTM will achieve this with KPIs such as inquiry service level of 80% at 20 seconds and many others.
Efficiency
Well-tuned interleaving processes and well-defined business functions across teams, enables WTM to achieve more customer servicing throughput with compact resources and system settings. Intelligent customer care, billing, network health and problem tracking IS design and integration, is a key factor in delivering the efficiency targeted.
The following is our core customer care strategy matrix, of which, customer’s experience will be derived:
Table 31
Call Centre/Directory Inquiry Service level 80% at 20 seconds
Face to Customer Service Centre 7 Centres
Available Customer Contact Media Voice, Web, WAP SMS, Face to Face, OTA
No of Call centres (inbound/outbound) 1
Data Services Configuration Automatic Detection and configuration
Payment and Collections Methods Cash, Direct debit (Credit Card, Banks) Vouchers
Average no of CSR’s per Customer 1 per 3500
Service provisioning time Instantaneous
Contact Centre
WTM’s main contact centre in Malé will feature the following:
• Rule/Skill based routing
• Interactive IVR that interfaces to the existing systems
• Interface with proposed CRM/WFM/Quality Monitoring system
• Multi Channel calls routing (Voice, email, web collaboration etc.)
• Support of IP based telephony
• Real Time & Historical reporting about the ACD
• Wall Board interface & Supply
• Call blending inbound/outbound calls
Contact centre KPIs will be central to WTM’s efforts to provide a state of the art customer service experience. The following counters will be constantly produced and monitored by the contact centre installation and will be fine-tuned to reach optimum working conditions:
Table 32
Entity
Counts
Q. Delays
Agents Counts
ACD Calls in progress Calls Queued Handle Time
Calls routed Calls abandoned in queue Average Handle
Calls incoming Average delay in queue Short Calls time
Calls offered Average delay in queue for abandoned calls Talk Time
Calls handled ASA Average Talk time
Calls in queue Service Level Agents Talking
Calls abandoned in queue Total delay in Q
Calls out Abandon wait time
Return in Ring/Busy
Trunks Trunks in Service All trunks busy Trunks Idle
Calls Abandoned Call in Calls out
In Service Time In use outbound time In use inbound time
IVR IVR Ports in service All ports busy Ports Idle
Calls Abandoned Calls in Calls out
In Service time In use outbound time In use inbound time
Agent Logged on or out Available time Calls queued
Ready/not ready Reserved Time Calls abandoned
Available/not active Busy other time Calls handled
Active Active time Out external calls
Talking in/out Talk time Out internal calls
Work ready/not ready Talking in/out time Direct incoming calls
Busy other Hold time Transfer in/out calls
Reserved Work ready/not ready time Abandoned ring calls
Hold Not ready time Abandoned hold calls
Date and time of login Handle time Supervision assisted calls
Call direction Logged on time Intercepted calls
Call destination (outbound) Date & time of login in/out Conferenced calls
ASA Emergency Calls
Average Handle time Longest queued call
Average talk time
Customer access to the contact-centre systems and personnel will be enabled through Web/WAP, IVR, personal assistance, and e-mail. The contact centre setup will feature a three dimensional view of all customer related data enabling a full view of current and historical events. This view is equally accessible with the same integrity and totality by either the CSR or the customer through the automated interface.
Figure 25 illustrates the Internet Protocol Contact Centre:
Bad Debt Management
• Credit limits will be set based on customer profile
• Credit limits will increase/decrease based on the customer’s behaviour and payment history during subscription period
• To minimize bad debt, customers electing to go for post-paid packages might have to pay an upfront deposit that will depend on the customer profile, documents presented at subscription point, payment method (cash, direct debit on bad account or credit card) and the profile of requested service e.g. local calls, international, roaming, data service etcetera.
• Wataniya will make a welcome call for post-paid customers after subscription in which the customer identity, information and billing address will be verified
• Credit limits and service suspension upon reaching that limit will be handled automatically by the system
• Post-paid subscribers will have various methods of payments beside cash or direct debit, such as scratch cards that will be available thus saving the customers the effort and time of traditional cash payments
• A precise dunning process will follow the bill life cycle very closely with determined periods triggered from the day the bill was issued. With the expiry of every period the customer will be advised by automated SMS or IVR with the amount due and the action towards their account in the event of non payment. The following is a typical dunning process:
o Due date N weeks from date bill was issued: dunning, grace period, out-going call barring follows.
o M weeks of call barring: dunning, grace period, incoming call barring follows.
o X weeks of outgoing and incoming call barring, dunning, grace period, account deactivation follows.
o Y weeks of deactivation, letter of notification, account recycled, bad debt team receives file for direct follow up.
5.2 Billing and collections
Billing Functions
Wataniya has extensive experience in deploying billing and mediation platforms in a fast paced and demanding start-up environment. In the past year the company has deployed 2 post-paid and pre-paid platforms in Iraq and Algeria. WTM is committed to providing a real-time dynamic convergent billing platform that offers the same packages and services to all customers, both pre-paid and post-paid. WTM’s convergent billing platform supports all commonly used EDRs/UDRS/CDRs and will be able to equally support home/roaming pre-paid/post-paid events for all WTM’s service offerings. This will be achieved through the compliance of WTM’s switching and billing systems with CAMEL phase 3, TAP2 and TAP3. Per second billing is also a commitment from WTM assuring the continuity of the same type of billing granularity prevalent in the Maldives’ wireless market. The following being the main billing functionality featuring in the convergent billing platform:
• Registering subscribers
• Provisioning of subscribers and associated services
• Counting use of telecom services
• Calculating price of services provided to a subscriber
• Printing bills and other output deliveries
• Informing subscribers
• Providing services to subscribers
• Providing payments for services provided to subscribers
• Accounting arrival and transfer of subscriber equipment at the company warehouses
• Deliverable documents
• Financial monitoring
• Submitting initial data to the enterprise accounting department
• Performing settlements with other telecom operators
• Collecting and analysis of statistics
• Planning and forecasting
• Rating of services considering internal and external tariffs
• Creating and transmitting statistical and other data necessary for settlements with other company’s subdivisions
• Counting and monitoring settlements with partners
• Roaming support
• Managing and tracking command interaction with network elements
• Credit control, management and scoring
• Dunning and credit alerting
Figure 26 illustrates the billing platform’s architecture:
Rating and Metering Integrity
Wataniya Telecom has mastered several approaches in revenue assurance/rating integrity mechanisms collected through the experiences of four different operations with different billing profiles. As far as rating integrity assurance, WTM recognizes the significance of the end-to-end inclusion of all steps starting from the service rendering event, all the way through to issuing the bill for that event.
WTM continuous audit and control processes consist of the following steps:
• Periodical HLR-to-Billing system comparative audit and synchronization
• Periodical CDR-to-bill integrity audit
• Continuous CDR sequencing and file integrity audit
• Interconnect checks and balances
• Random Call tracking
HLR Audit
The objective is to assure that subscribers are fully awarded the features and services charged for, in addition, to averting leakage of revenue due to services rendered yet not billed for:
• An automated weekly inventory of all subscribers and services active on the HLR is compared with the corresponding subscribers and services on the billing system with automated alignment of both systems
• Manual auditing of alerted cases to determine cause of misalignment
Figure 27 shows the HLR audit process:
CDR /Call Audit
The objective is to assure end-to-end raw CDR to billed call integrity and accuracy
• Monthly bulk call per sampled duration comparative audit, conducted between post text converted CDR total duration and total rated calls residing in billing system call detail tables. Audit to be conducted also in case of any network configuration change that might affect CDR integrity
• Continuous sequence monitoring of CDR file generated by the MSCs and real-time flagging of missing files and gauging level of error and corrupt files, incomplete CDRs
• Monthly random sampling of actual calls and tracing starting from access network all the way into call tables in billing system. Audit to be conducted as well in case of network configuration changes that might affect CDR integrity
Figure 28 shows the CDR/Call Audit process:
Rating Efficiency
WTM emphasizes the criticality of rating efficiency in the subsequent bill accuracy and completeness. The continuous efficiency of the systems housing the billing platform is the cornerstone in assuring the totality of the outcome. Wataniya has developed a set of Billing
Infrastructure Key Performance Indicators that it tracks throughout all operations assuring the synergy between the ideal operating parameters of the billing platform, and rendering the billing process as optimized as possible, coupled with efficient utilization of the investment in the billing platform. WTM CPU/Disk Space/IOps (input output per second) strategy, whereas the hardware sizing is continuously proportional to volume of CDRs and number of subscribers with an objective of achieving KPI is as follows:
CPU Utilization 60%
SAN queue depth: 2
Disk Utilization on RAID 1+0/0+1: 60%
Call rating latency KPI: t-5 min.
Other billing KPIs will also be tracked and used to fine tune the billing process in order to achieve the most efficient throughput:
• CDR rejection ratio
• Average rating delay
• Average billing cost per subscriber
• Average bill cycle time per subscriber
• Average bill cycle delay
• Average interconnect reconciliation delta
• Average last call to bill cycle cut-off latency
• Average number of subs per billing cycle
• Percentage of unrated CDRs
• Average delay between last call and sending of Tap out files
• Average delay between last call and receipt of Tap in files
• Percentage of billing platform licensing utilisation
• Percentage of mediation device licensing utilisation
• Mean time between successful backups
• Mean time between successful restore tests
• Percentage of billing platform availability
Collection, Bill Payment and Refills
WTM’s system of collection will be based on a dynamic deployment design and it will take into consideration the dispersed nature of the population and the geography the Maldives.
The system relies on the availability of WTM’s network coverage and uses its reach to provide real time bill payment, prepaid account refill and collection facilities to WTM subscribers. Therefore, wherever there is a WTM signal, there is potentially a payment and collection facility.
The system will be centralised around a wireless/wire line payment gateway. The wireless aspect will be achieved through the deployment of mobile, passive terminals around the islands and owned by 3rd parties such as distributors, shop owners etc. These terminals require no connectivity and are activated and transformed into the connected mode using the subscribers’ handset through a toll free encrypted voice call back to the gateway where the payment transaction is relayed over, the subscriber’s account is credited in real-time and a receipt is issued on the spot to the customer. The subscriber need not divulge any private data; a handset with active service is all that’s required.
The Point of Sale system provides connected mode payment back to the payment gateway through its comprehensive interface functionality. The POS system will be available in fixed and mobile shops throughout the Maldives and relies on WTM’s network for availability of connection medium back to central systems in real-time.
In addition to payment by vouchers, all WTM POS will be accepting credit card payments, in addition a SIM based Credit Card payment application, will be available on every WTM SIM and will enable the subscriber to authorize WTM to charge their preconfigured credit card info using an explicit request for approval over a WAP push. This facility will only be activated for subscribers who wish to do so. However, the mechanism itself will be available for everybody. The subscriber will be able to top up their pre-paid account or add payment to their post-paid account at their convenience, and will have the transaction showing on their next credit card statement. This functionality will be subject to financial regulatory approval in the Maldives.
Figure 29 demonstrates payment methods:
Interconnect Requirements
For interconnect reconciliation report: a comma separated ASCII file is to be used to exchange data with other interconnect partners, the following data should be in the record to be able to reconcile on a call level:
• A Party Number
• B Party Number
• Transaction Date
• Transaction Time
• Duration
• Point of Interconnect (POI)
• Truck In Name
• Truck Out Name
• Call Type (MOC, MTC, CF … etc)
• Service Type (Voice, Fax, Data, SMS, etc)
• Data Volume
• Difference from UTC (for reconciling with partners on different or multiple time zones)
• Transit MSC
6.0 Management and Organisational Structure
6.1 Organisation Chart
Figure 30 outlines the management structure for Wataniya Telecom Maldives (WTM)
The following table identifies WTM’s management team:
Table 33
Name Title Nationality
Mr. Ziad Shatara Chief Executive Officer Jordanian
Mr. Mark Hanna Chief Financial Officer Irish
Mr. Emad Malek Chief Technical Officer Canadian
Mr. Darren Walker Chief Commercial Officer Canadian
Mr. Zeyad Abdullah Al-Omar Human Resources Canadian
Mr. Robert Swade Regulatory Affairs British
6.2 Development of Local Staff
In countries where it operates WTM actively recruits from the local population, recognizing that the success of a business is dependent on its employees. It is envisaged that Wataniya Telecom Maldives’ Human Resources department will focus on hiring and developing the skill sets of Maldivian staff, ensuring that there is full compliance with Foreign Investment Guidelines regarding hiring and training, with the ultimate aim of employing Maldivians at technical, skilled, and management levels.
6.3 Employee Projections
WTM foresees the need to hire 103 employees in its first year of operation. The majority of these employees will be Maldivian. Over subsequent years of operation these numbers will continue to increase to mirror subscriber growth. On average, WTM will add 124 employees annually. However, with the establishment of any new company there are always additional resource requirements. Wherever it is feasible WTM will endeavour to hire Maldivian service providers. For specific details refer to Table 10, “Manpower,” in the financial plan which specifically address employee numbers.
7.0 Contributions to the Maldivian Telecommunications and Information Technology Sectors
WTM’s vision is to make a positive contribution to Maldivian society by working with the government of the Maldives to develop a national Telecommunications and Information Polytechnic. WTM is committed to providing the Maldives with an overall standard of excellence by funding training facilities and internship programs in these sectors. WTM envisages assisting the government by making a financial contribution of 1% of annual revenue, which over a period of 15 years would be in excess of USD 11,000,000.
The Institute will benefit top students from throughout the Maldives by introducing them to an industry-specific academic program that includes internship periods and practical work experience in a real world environment. The following actions will be undertaken: provisioning remote computer labs with Internet connectivity in main islands; connecting remote labs to the Telecommunications and Information Polytechnic and local LAN in Malé; the development of local labs to be used for distance learning which will allow for live and stored lectures in addition to real time Q & A periods for students with instructors; access to R & D and VAS’ facilities for senior projects. Students trained at the Telecommunications and Information Polytechnic will have the opportunity to assume progressive, entry level positions within WTM upon the completion of study at the Institute.
The certificate granting program will be designed to benefit the Maldives by producing highly trained individuals. WTM would also potentially benefit from the careful training, monitoring and mentoring of students.
Wataniya envisages that the Polytechnic will feature world-class classrooms, computer labs, online lecturing, R&D facilities and a true learning atmosphere. Typically, the first two semesters will consist of academic training in the respective areas followed by alternating co-op and academic semesters on WTM facilities for the duration of the programs.
Outstanding Maldivian students that gain experience and excel in their roles will be provided with sponsorship opportunities to work overseas within the Wataniya group subsidiaries, and potentially have a key role in shaping the future of the Wataniya group.
The timetable for establishing the Polytechnic is dependent on creating close synergies with governmental agencies, particularly the Ministry of Communication, Science and Technology. The government of the Maldives will provide facilities for the establishment of the Polytechnic, and WTM envisages that it will provide the finances, and assist from a technical perspective in setting up the required computer labs.
8.0 Financial Plan
The economic viability of the financial plan has been assessed using a comprehensive, proprietary financial model incorporating information, data and assumptions from a variety of sources as follows:
• Telecommunications Authority of the Maldives
• Maldives Monetary Authority
• Bidders Conference
• Maldivian Mobile Market Assessment Document
• Coleago Consulting, a mobile telecommunications market consultancy firm, which has conducted an independent market assessment
• Dhiraagu’s public information
• CIA fact Book
• Wataniya International’s management past experience and expertise
Subsequent to development of the base case, a number of scenario analyses have been conducted in order to test the resilience of the plan to one or more adverse changes in the assumptions, and to test the conformity with the key value drivers of the Wataniya Telecom Maldives business case with Wataniya International’s experience in other markets against international benchmarks.
All amounts in the financial model are shown in US Dollars, as per the bid submission rules document. Moreover, they are shown in real terms with no effect of inflation.
8.1 Assumptions
8.1.1 Key economic assumptions
1. Physical background: The Republic of the Maldives consists of 1,190 islands spread over 100,000 square kilometres (820 kilometres from north to south) and 26 atolls, in the north central ocean. The north most atoll is located some 600 kilometres southwest of India; and Malé, the capital, is at similar distance southwest of Sri Lanka. Only 199 islands are inhabited, most of the islands are small and almost 99% of the country’s surface is ocean.
2. Population: The population of the Maldives has been estimated at 289,000 as of mid- 2004 as per the Ministry of Planning and National Development of the Maldives. The most populous island where almost 30% of Maldivians live on 1.77 square kilometres is Malé, the capital. The next most populated island has 9,500 inhabitants, but most have less than 2,000 inhabitants. According to the national definition of urban, population residing outside of Malé considered rural (76.2%). English is spoken widely and the official religion of the State is Islam. The population has been growing at an average of 2% per annum, even though lately they have surpassed such growth levels. It is forecasted in the long term to continue growing at 2% p.a.
3. Gross Domestic Product: Despite few natural resources and limited arable land, the country’s economy has seen rapid growth, especially since the 1980’s, raising the Maldives to the level of middle income countries with gross national product per capita of USD 2,300 in 2003. The two main engines of the economy are tourism and fishing, accounting for almost two-fifths of gross domestic product. GDP has been growing at and average rate of over 5% recently and real GDP has been assumed to grow at a real growth rate of 2.3% p.a. over the next 15 years.
4. Inflation, money and prices: As per the Maldives Monetary Authority (MMA) site, monetary policy in Maldives has been aimed at achieving and maintaining price stability, by using an exchange rate peg with the US dollar as the intermediate target, in a manner conducive to balanced and sustainable growth of the national economy. The main policy instruments currently in use are the Minimum Reserve Requirement (MRR), MMA Certificates of Deposits (CDs), and a ceiling on rufiyaa interest rates. Thanks to the efforts of the MMA, inflation has been kept in check in the last five years. After witnessing a growth of 3% in 1999, inflation hardly grew in subsequent years and in fact witnessed a deflation of 4% in 2003. We expect the MMA to continue with its current policies in the intermediate future and inflation has been estimated to grow at a modest 1% p.a. in the future.
5. Exchange rate: The Maldivian Rufiyaa is pegged to the US Dollars at an USD/RF exchange rate of 12.85. We have interpolated future exchange rates using a variety of methods including least square method and linear interpolation, in order to come up with realistic assumptions concerning future exchange rates. In conformity with economic theory, we have finally assumed that future exchange rate of the Maldivian Rufiyaa to the US Dollars is determined in the long term by the differential in inflation rates between the Republic of the Maldives and the United States of America. At this stage we have found these to be negligible. We expect the situation to remain so in the future and accordingly, we have maintained the same exchange rate (i.e., USD/RF of 12.85) in our forecast.
6. Interest rates: As per the Maldives Monetary Authority site, interest rates of loans denominated in local currency to the private sector ranges between 9 and 14% p.a. In view of our plan to transact local currency loans in the Maldives, and thus indirectly further benefit the local economy, and mitigate any risks in currency exchange, interest rates has been assumed by us at 12%. In case this is found to be unreasonable, then we would be able to revert to transacting loans in foreign currencies at much more reduced rates.
7. Number of tourists/visitors per year: Figures have been taken from Maldives Mobile Market Assessment provided as part of the bid documents. They have been assumed at 603,480 visitors in year 2004. Growth rate of visitors has been assumed at 7% until year 2008, then to gradually decrease in 2009 to 6%, 2010 to 5%, 2011 to 4%, and 2012 and beyond to 3%. Roamers have been assumed to constitute merely 60% of visitors, in conformity with independent market research.
8. Number of Residents (travelling abroad) who are roamers: Figures have been assumed at 20% of average customers per year. In view of the increased standard of living of in the Maldives, and past trends, we believe that this is a realistic assumption.
8.1.2 Key market assumptions and revenue
1. Penetration rate: Total penetration rate in the market has been assumed to reach 34.6% or 100,000 subscribers by end of 2004. This is based on current market penetration as well as market trends. The addressable market consists of both the resident population and the incoming visitors, principally tourists. Almost 190,000 of the population are over the age of 15. However, not all the population is covered by the current mobile network, with Dhiraagu estimating that they will cover 78% of the population by early next year (i.e., 2005). This means that approximately 150,000 of the adult population will be covered. In fact, 100,000 subscribers represent two-thirds of the adult population with mobile coverage. The aforementioned show three main potential sources of subscriber growth as follows:
1. Increases in the adult population as the current a large number of children reach adult age
2. Increased coverage of mobile networks as WTM roll out to those areas not currently served.
3. Increases in the penetration rate of mobile services in areas of existing coverage as mobile services become more affordable due to the high price reductions introduced by Wataniya Telecom Maldives and increases in wealth.
The number of tourists the Maldives continues to increase since tourism was first introduced. The average stay of a tourist is just over a week.
With the entry of WTM, market penetration is expected to increase quickly to 47.5%, 55.2%, 60.6% 77% and 82.8/5 in the years 2005, 2006, 2007, 2013, and 2019 respectively (more about this in market share below). See table below showing forecasted annual market penetration in the Maldives.
Table 34
Particulars
2005
2006
2007
2008
2009
2010
2011
2012
Market Forecast
Maldives Population ( 000s) 295 301 307 313 319 325 332 339
Percent increase in population 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Total Mobile Market Penetration 47.5% 55.2% 60.6% 64.3% 66.8% 69.7% 72.3% 74.7%
Total Mobile Subscribers in Market 140,000 166,000 186,000 201,000 213,000 227,000 240,000 253,000
Total annual increase in mobile subscribers 40,000
26,000
20,000
15,000
12,000
14,000
13,000
13,000
Table 35
Particulars
2013
2014
2015
2016
2017
2018
2019
The Market
Maldives Population (000s) 345 352 359 367 374 381 389
Percent increase in population 2.00% 2.00% 2.00% 2.00% 2.00% 2.00% 2.00%
Total Mobile Market Penetration 77.0% 79.2% 81.3% 81.7% 82.1% 82.5% 82.8%
Total Mobile Subscribers in Market 266,000 279,000 292,000 299,500 307,000 314,500 322,000
Total annual increase in mobile subscribers 13,000
13,000
13,000
7,500
7,500
7,500
7,500
2. Market share. As per commitments made in the bid submission rules documents, WTM will launch its network within six months of license award of license and shall quickly move to capture 21.4% of market share by end of 2005. The quick uptake of customers is based on a three folded strategy as follows:
a. Coverage that targets 95.7% of the population from day 1 of launch and it includes all urban areas and resorts.
b. A reduction of price equivalent to 30% of the prices charged by the incumbent operator.
c. A better customer relationship through special attention to customer care and a larger capacity network and stronger indoor coverage.
Because of the perceived competitive advantage, net additions of WTM are expected to be in the 75% range in the first three years of operation, decreasing to almost two- thirds by 2008 before decreasing further to almost 40% with the entry of a third entry operator in the year 2010. Churn is expected to jump quickly from zero in 2005 to almost 10% in year 2007 and even further reaching 20% levels in future years. Based upon the above, WTM’s market share is expected to reach 30.1 %, 34.9%, and 39% by end of 2006, 2007, and 2009 respectively. It is expected to hover around the 39% mark for the duration of the license with the introduction of the third operator, expected to be in year 2010. End subscribers are expected to reach 30,000 in 2005 and 124,000 in year 2019. Full details of the same are provide in the attached tables 3 and 4 in section 8.1.5 below.
3. Segmentation: Wataniya Telecom Maldives will be offering two broad product offerings (i) post paid packages where users are billed monthly in arrears for calls made; and (ii) pre-paid packages where users purchase airtime upfront. The post paid packages usually targets the high level income segment within both the private and corporate segment market, while pre-paid packages are aimed at the remainder of the market. As is common for GSM operations of this nature, pre-paid users are expected to make up the bulk of the subscriber base (i.e. 95%) while post-paid subscribers as a percentage of total subscribers are expected to represent 5% of Wataniya Telecom Maldives subscribers.
4. Usage: The levels of usage assumptions and the tariffs are the key drivers differentiating the two product packages. As the post-paid offering is targeted at those subscribers generating high level of traffic, usage assumptions are higher than those of the pre-paid package. In the case of WTM, Minutes of Use per subscriber per month is expected to be 410 minutes for the post-paid subscriber and 185 minutes per subscriber for the pre-paid subscriber. This is based on market research, price elasticity of demand, and Dhiraagu’s published blended Minutes of Use information. As the market expands the minutes if use is expected naturally to decrease, and in the case of WTM, the post-paid MOU is expected to decrease from 410 in 2005 to 363 in 2019, while the prepaid MOU is expected to decrease from 185 minutes in 2005 to 164 in 2019. Full details of the same are provided in table 4 attached in section 8.1.5 below.
5. Tariffs: The tariff structure and proposed packages ensures that the high usage subscribers (post-paid) benefit from lower tariffs than medium or light usage subscribers (pre-paid). Dhiraagu existing prices and the independent market research has led us to assume the following prices in our business plan.
Table 36
(US Dollars)
Peak
Off-Peak
Post-Paid
Monthly subscription fee 4
Price per minute – voice 7.42 cents 4.38 cents
Price per SMS-local 4.375 cents 4.375 cents
International SMS 8.75 cents 8.75 cents
Prepaid
Price per minute –voice 8.5 cents 7.85
Price per SMS -local 4.375 cents 4.375cents
International SMS 8.75 cents 8.75 cents
6. Traffic: Assumptions regarding traffic are assumed from Wataniya Telecom’s past experience, as well as publicly available information in the Maldives and the market research. These have been assumed as follows:
Table 37
Post-Paid Peak (70%) Off-Peak (30/%)
Outbound 50% 50%
Inbound 50% 50%
Prepaid Peak (60%) Off-peak (40%)
Outbound 50% 50%
Inbound 50% 50%
7. International traffic and pricing: The international price per minute is based on weighted average of tariffs to the top six countries as quoted by Dhiraagu.
Table 38
(US Dollars) Peak Off-Peak
International minute 1.87 1.38
8. Roaming and roaming tariffs: As explained above, the number of tourists expected to visit the Maldives will continue to increase from current levels of almost 603,000 in 2004 to reach quickly almost 800,000 in 2008 and to grow thereafter at a decreasing level from 7% to 3% eventually. Because of the high level of income that visitors to the Maldives have been proven to have, the business plan assumes that 60% of those visitors will roam, each roamer for an average of 40 minutes per month. As far as tariffs charged to the roamers, the business plan assumes the weighted average price of Dhiraagu for their top six destinations grown by a margin of 30%. The cost of minute charge to us by Dhiraagu has been assumed at the same price discounted by 20%, as per the indication provided in the bid submission document.
9. Revenues: As shown in the projected financial statements attached below, the total revenue derived from the above-described assumptions is projected for the first year to USD 21.5 millions for 6 months of activity, USD 68.7 millions in year five and 82.5 millions in year ten. This translates in an annualized growth rate of 21% and 16% respectively for the first 5 years period and the following decade. Roaming revenue represent an average 76% of the total revenue. Apart from the first year where the activation revenue represents 31% of the total revenue excluding roaming, the main revenue stream is expected to be the airtime and the VAS usage accounting for an average proportion of 89% over time. Interconnect revenue and initial activation charges representing respectively 7 and 3% of total revenue before roaming, telephone and equipment sales being negligible.
It is noteworthy to state that no revenue from 3G has been assumed in the revenues model, even though CAPEX expenditures take into consideration that the necessary equipment to add 3G capabilities in the manner described earlier has been accounted for.
10. ARPU: Resulting ARPU’s for the voice as well as data are shown in section 8.2.3 Key Measures.
8.1.3 Key operational assumptions
1. Cost of sales: Cost of sales is made up of the following items:
a. Revenue sharing. This is presumed to be 5% of Gross Revenues (before any deduction) as per bid submission rules document. Table 2 attached in section 8.1.5 below details the revenue sharing amounts in both Maldivian Rufiyaa, nominal and real as well as US Dollars, for the duration of the license period.
b. Sales Commissions. Dealers are expected to be given a commission of USD 15 per line activated. Dealers also earn 5% commission of the face value of the scratch card. Table 9 in section 8.1.5 provides expected dealer commissions fro the duration of the license period.
c. SIM cards costs. In line with Wataniya International’s experience elsewhere, the cost per prepaid activation package is presumed to be USD 3.5.
d. Handset costs. Wataniya Telecom Maldives shall procure a limited number of handset sales for distribution via its seven outlets as most handset sales and procurement shall be performed via Wataniya Telecom Maldives’s distribution partners. The average cost per handset is presumed at USD 50. The business plan presumes that Wataniya Telecom Maldives shall subsidize 50% of the cost of a handset of all post-paid sales as part of its promotional campaign.
e. Scratch card costs. In line with Wataniya International’s experience elsewhere, these have been presumed to be 5 cents per card.
f. Interconnection rates with the fixed line operator and leased lines. Interconnection has been estimated at 2 cents per minute. Leased lines are estimated to cost USD 250,000 per line, per annum, for a total of USD 750,000. The business plan assumed three leased lines.
g. Bad debt. A provision for doubtful account has been estimated at 3 % of post-paid revenue.
2. Operating expenditures: OPEX is made up of the following items:
a. Technical operating expense. These include all costs relating to the operation of the network. Major items in this expense category are the site costs, the MSC costs, the GSM channel frequency fees and the microwave frequency fees as well as the leased line and satellite links costs, and network maintenance costs. A detail of these costs can be found in the P&L section of the financial statements in section 8.2.1 underneath.
b. Commercial operating expenses. These mainly relate to promotion and advertising costs. Except for the first year of operation, where marketing expense is forecasted to be USD 3 million plus 6% of revenues (i.e. USD 4, 353,913), marketing expenses has been taken as a percentage of revenues.
c. Wages and salaries. The wage and salary expenses are based on the forecast employee figures by function and forecast average salaries per employee. The table 10 in section 8.1.5 shows total headcount and average salaries per employee.
d. Overhead expenses. Overhead costs include all other indirect costs.
e. Rental of properties for sites and offices. These have been estimated at USD 1,000,000 per year, based on price of MVR 30 per sq ft.
f. Management fees. Management fees for operations support are estimated at 3% of gross revenues. In addition to theses charges, external consulting has been estimated at USD 3,6 millions for the first 3 years, 2/3 being incurred in the first year.
3. CAPEX expenditures. Network Equipment Capex incorporates all investments in network related assets, as well as required investment for 3G applications. These include:
a. NSS and VAS Capex, which relates to all component that are used in providing the switching and value added services capability for the network, is calculated based on the number of units of each components required given the subscriber forecast and an average cost per unit.
b. BSS Capex. All radio-related functions are performed in the BSS, which consists of Base Station Controllers (BSC’s) and the base transceiver stations (BTS’s). The BSC provides control functions and physical links between the MSC and BTS. It is a high capacity switch that provides functions such as handover, cell configuration data, and control of radio frequency (RF) power levels in base transceiver stations. The BSC’s are served by a Mobile Services Switching Centre (MSC). The MSC performs the telephony switching of the system. The BTS handles the radio interface to the mobile subscriber. The BTS is the radio equipment (transceivers and antennas) needed to service each cell in the net work. A group of BTS’s are controlled by a BSC. The cost calculation is based on the number of units required given the subscriber forecast and an average cost per unit.
c. Transmission Capex, which measures the cost of providing the necessary infrastructure to effectively connect the network together
d. Civil Works Capex, which is the work required to prepare the sites for installation of the network components described above.
e. Network management and operation systems.
f. Tools of software Capex.
g. Hard & software Capex, which incorporates upgrades to the equipment infrastructure described above.
h. NSS and VAS Capex, BSS Capex and Transmission Capex include contingency factors allowing for spare parts and headroom, an additional 2 to 5% of the forecast is budgeted within each category respectively.
i. The remainder of the Capex investments is made up of:
i. Billing and customer care systems Capex
ii. IT and Software Capex
iii. Infrastructure Capex (i.e., furniture and fixtures)
j. Depreciation of investments. All investments have been linearly depreciated in accordance with the bid submission rules document. The depreciation rates have been provided in table 1 in section 8.1.5 below.
The Balance Sheer in section 8.2.1 shows the major expenditures on network equipments, civil works, IT investments and Billing and customer care systems.
4. Intangible assets: The only presumed intangible assets are the license fee of USD 1 million fixed fee. This is presumed to be amortized over the 15 years license period on a straight line depreciation basis at a rate of USD 66,667.
5. Corporate taxes and import duties: Taxes are presumed at zero as per information provided in bid submission document. It has been also assumed that Wataniya Telecom Maldives would benefit from the duties exemption granted to foreign investors.
6. Contribution to the Maldivian Telecommunications and Information Technology sectors: This is based on 1% of Gross Revenues (prior to any deductions). Contribution to the Maldivian Telecommunications and IT sectors are provided in table below:
Table 39
Contribution to the Maldivian Telecommunications and IT sectors, per year in USD, real terms
Year 1 264,925 Year 9 849,842
Year 2 559,501 Year 10 875,319
Year 3 629,998 Year 11 899,529
Year 4 686,990 Year 12 919,801
Year 5 735,866 Year 13 938,648
Year 6 774,080 Year 14 957,934
Year 7 802,939 Year 15 977,746
Year 8 826,438
Yearly average 779,970
Total 11,699,555
8.1.4 Key technical assumptions
1. Nationwide coverage targeting 95.7% of population at launch: As determined by the market research and subsequently the marketing strategy and the business plan, Wataniya Telecom believes that launching with a nationwide coverage covering a wider territory than the incumbent operator is the one of the corner stones of success and accordingly the technical plan has been drawn with this assumption in-mind which means larger amount of cash outlays upfront and higher funding of peak requirements. Launch is planned to be within 6 months of license award (i.e. 1st July 2005).
2. Indoor coverage in all dense urban residential areas and all resorts: The market research has indicated that the incumbent operator is at its strongest in Malé, a dense urban residential area, as well as the majority of the resorts, even though it is not. Because roaming constitutes such a large part of revenues, and that it is imperative for Wataniya Telecom Maldives to be perceived as offering a better quality service for a less expensive tariff structure, all capacity configurations of Wataniya Telecom Maldives takes into account and WTM is planning to launch with strong indoor coverage of all dense urban residential areas.
3. As the market research indicated, Wataniya Telecom Maldives should be offering wide range of VAS, including EDGE, high speed wireless internet (Push-to-Talk over cellular). Network has been designed in a such a manner and will have a competitive advantage over the incumbent operator network, which is actually adding on VAS capabilities to their network which has been designed for basic voice services only. Offering such services is expected to increase ARPU.
4. Capture of 60% of inbound roaming traffic. The network has been designed keeping in mind such an objective. Accordingly, the network will be GPRS/EDGE enabled offered to both post prepaid roamers.
5. International gateway in year 6. The possibility of Wataniya Telecom Maldives having its own international gateway has been assumed:
8.1.5 Assumptions Summary and Tables
1 The plan is for 15 years which includes both pre-paid and post-paid subscribers reaching 124,000 at the end of year 15.
2 Post-paid subscriber constitutes 5%, the balance being prepaid.
3 For pre-paid 185 Avg MOU for new subscribers is considered for first year and subsequently decreases to 164 by year 15.
4 For post-paid 410 Avg MOU for new subscribers is considered for first year and subsequently decreases to 363 by year 15.
5 Monthly subscription fee is USD 4 subsequently reducing to USD 3 by year 15.
6 Post-paid local charge per minute (Peak) = 7.42 cents subsequently reducing to 5.82 cents.
7 Post-paid local charge per minute Off Peak) = 4.38 cents subsequently reducing to 3.43 cents.
8 Prepaid local charge per minute (Peak) = 8.5 cents subsequently reducing to 6.67 cents.
9 Pre-paid local charge per minute (Off Peak) = 7.85 cents subsequently reducing to 6.16 cents.
10 Advertisement expenses taken at 6% of total revenue (plus an initial spend of USD 3 millions the first year) reducing to 2% over the years.
11 License fee is considered at USD 1 Million.
12 Revenue Sharing is amounting to 5% of the total revenue. Total revenue = Gross revenue before any deductions
13 Management fee is 3% of the total revenue, constant over the years.
14 Corporate taxes and import duties on assets are assumed at 0%.
15 Total Capex Per Subscriber is assumed at USD 1292 and is USD 503 by year 15.
16 The total debt raised over Equity contribution is in the ratio 60% - 40%
17 Equity contribution is amounting to USD 16 million, in cash
18 0% of investment gross value as salvage value assumed and the assets completely gets depreciated over 15 years.
19 Contribution to the Maldivian Telecommunications and IT sectors are based on a fixed contribution of USD 50,000 plus 1% of revenue.
20 Interest rate on loans was estimated at a 12% annual
21 Inflation rate estimated at 1% per annum, all figures presented are in real terms except otherwise specified.
22 Exchange rates USD/MVR have been projected at 12.850
23 Interconnection charges = 2 cents per minute
Table 40
Table 1 - Linear depreciation rates of fixed assets
% Years
Network Equipment 12.5 8
(incl. BST/ NODE-B, TRX, BSC/ RNC, MSC, Ntw management and transmission systems)
Land & Buildings
Civil works related to the Network 6.7 15
Furn. & Fixt. 20.0 5
IT Systems 33.3 3
(incl. Billing and Customer care systems)
Others 20.0 5
.
8.2 Projected Financial Statements, Ratios and Key Measures
(Please refer to the following pages)
8.2.1 Financial statements
(Please refer to the following pages)
8.2.2 Ratios
(Please refer to the following pages)
8.2.3 Key Measures
(Please refer to the following pages)
8.2.4 Risks
Market Risk
Wataniya Telecom has made certain assumptions about the market size of the potential market for mobile telephony in the Republic of the Maldives. In addition, certain assumptions were made about the speed of subscriber uptake of the various mobile services that the Company will be offering. Although Wataniya Telecom is reassured that such market assumptions are supported by independent market research, there is a risk that neither the market size nor the speed of the subscriber's uptake of mobile services occurs as planned. Accordingly, the ability of the Company to achieve the profitability figures of the business plan will be at risk. Wataniya Telecom is confident that its management team has the necessary expertise and operational strategic flexibility to manage an adverse change in the market place. Even more so, Wataniya Telecom has the financial strength to support the operations.
Competition Risk
Competition from Dhiraagu is expected to be strong and robust. Dhiraagu has already achieved good penetration levels and is expected to compete aggressively to protect its dominant position.
Wataniya Telecom has made certain assumptions about the behaviour of the incumbent operator in a duopoly situation. Except for the case of Iraq, Wataniya Telecom has always been the second or the third GSM operator that comes in to the market. Yet, Wataniya Telecom has always been successful in formulating and implementing strategies for achieving success in each of its market against strong competition from the incumbent operator.
However, competition might resort to non-market forces in order to prevent Wataniya Telecom from achieving its goals. Wataniya Telecom is confident that in the presence of a fair and equitable regulator, and its management team, profitability will be reached.
Rollout Risk
Wataniya Telecom envisages a commercial launch within 6 months from award of license, with target coverage of 95.7% of the population. In view of the unique geography of the Maldives this might not be easily achievable. However, Wataniya Telecom is committed to this aggressive rollout of the network and launch of service.
Macro Economic and Political Risks
Certain assumptions were taken about the growth rate of the Maldivian economy, population and the number of tourists that will visit the Maldives each year. These are based on past performance of the Maldivian economy and the perception of tourists that the Maldives is a stable and safe country and, accordingly a tourist destination. Like every other country, however, the Maldives remains susceptible to shocks or chaotic events that might hamper its economic development or reputation as a safe tourist destination.
Having said that, the business plan assumptions are sound and Wataniya Telecom believes they are achievable.
Liquidity Risk
Liquidity risk is the risk that an enterprise will encounter difficulty in raising funds to meet its commitments. Wataniya Telecom manages liquidity risks by maintaining a portion of its investments in highly liquid investments, and by monitoring on a regular basis its maturing commitments. The Company will pursue the same conservative approach in the Maldives with the assistance of Wataniya Telecom. This will ensure that WTM will always have enough funds on hand in order to meet its obligations.
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