Interview: Didier Charvet, Nizar Bouguila
What is the development scheme for the 4G network, and how will it impact the market?
DIDIER CHARVET: The 4G network is interesting for operators because it offers new opportunities to grow their platforms. For the market as a whole, it will allow more regions to have access to high-speed internet. The Tunisian market is interesting in that people are still learning the 3G network even as 4G is about to be launched. Of course, there is significant demand for high-speed internet, but the real question is about the profitability of the 4G network. One of the other challenges will be to convince Tunisians to pay for the 4G network. Indeed, today less than 5% of the population own a 4G device, but we see great potential in the 4G USB sticks segment.
NIZAR BOUGUILA: The 4G network deployment is in line with the National Strategic Plan Digital Tunisia 2020. The government has moved forward with its implementation, with a focus on expanding connectivity to underserved inland regions enabling young people and small businesses to seize the opportunities of the digital economy, and boosting socio-economic growth and employment. This requires an increase in capacity and deployment of mobile broadband networks, and therefore leaves room for operators, as major players of the digital ecosystem, to develop innovative solutions in different sectors, such as education, transport, health care and e-government. It also gives them the opportunity to unlock new revenue from high-speed mobile broadband services. The main factor that will drive 4G network expansion and development will be the penetration rate of 4G devices, which was approximately 5% as of the end of 2015 and which is expected to double within a year.
How do you see the post-paid market evolving?
CHARVET: Post-paid or pre-paid plans are not fundamental factors for customer loyalty in Tunisia. For the client, customer satisfaction comes mainly from the price and the quality of service offered. For each payment method, the client would change operator if he is not satisfied. Providers not only differentiate themselves by the price and quality of their services, but also on the reliability of their networks. For instance, many people are disappointed when their roaming does not work. It is crucial to have an equal quality of the service anywhere in the world. The customer relationship is also a fundamental factor during the experience with the operator; from the first stop in the retail store to the after-sales service.
BOUGUILA: In our region, post-paid service is not very popular with residential customers. They prefer to use the pre-paid service for its ease and flexibility, even though some customers could save on their bills if they moved to post-paid service. To spur the migration of subscribers to this model, we are working to provide innovative services supported by robust networks, improved quality of service and more accurate segmentation to offer enhanced customer experience. We strongly believe that data and local, content-rich applications such as video streaming, m-payment and m-health are the driving forces of growth, and this growth will be possible with the deployment of LTE and greater smartphone penetration. We are working to provide improved 4G services throughout the country. The value of 4G is not only in charging more for faster browsing, but also being able to differentiate on service.
What can the government do to encourage more and better infrastructure sharing?
BOUGUILA: Cooperation between operators started in 2010 and now takes three different forms. First of all, there is the sharing of passive infrastructure such as pylons. The current trend is toward the co-location of equipment on the same tower. Second, with regards to the development of fibre optics, Tunisie Télécom, which is the owner of the infrastructure, has been sharing it since 2011 with the two other operators under an “indefeasible right of use” agreement for a 15-year period. Today, between 2000 km and 3000 km of fibre optics has been sold to Ooredoo, and 1000 km to Orange. Lastly, there is rent sharing, which is the sharing of active radio equipment.
CHARVET: Infrastructure sharing is fundamental for the development of 4G mobile networks, particularly given how towers and fibre-optic cables need to be deployed across the country. To encourage this, there are multiple options. We could see, for instance, a mandatory requirement to share infrastructure in certain cases like we see in other countries. Another potential means of accelerating infrastructure sharing would be to define a clear regulatory framework. This means that the rights and obligations of each operator would be defined, and take into account that each operator is in a different position with their infrastructure and network capacity. This framework is crucial to avoid an unbalanced situation that might be exacerbated by phone number portability or unbundling – two issues which exist in the regulations but are not actually applied.
Can the fixed-line segment be re-invigorated?
BOUGUILA: The fixed-line segment offers a huge opportunity for growth through broadband powered by DSL and fibre-to-the-home (FTTH) to support higher volume of data traffic and to meet growing customer demand for data services and richer communication experience. Relying on its highly-capillary fibre access network, Tunisie Télécom is delivering FTTH connectivity services to business customers in more than 200 key industrial and business areas, as well as to residential customers in four areas.
We have accelerated the introduction of new postpaid plans focused on data, with bundles including 3G /4G and additional services. We will push ahead with further expansion in the next five years so that FTTH will reach a large majority of neighbourhoods at speeds of up to 1 Gbps.
CHARVET: While fibre optic is proving increasingly popular as internet and data usage increases, there are still constraints on the fixed-line segment. In Tunisia, there is no unbundling, for example, which is a significant brake on the development of the fixed-line sector and the internet more generally.
While unbundling would not change the fact that Tunisie Telecom owns the copper lines and infrastructure, it would increase competition. Customers would have more than one choice of operator for a fixed-line subscription and could deal with any operator who could manage the entire process.
How can smartphones be made more accessible to the population as a whole?
CHARVET: The solution is ensuring the population has access to a high-quality device at an affordable price. The GDP per capita in Tunisia is lower than in countries where smartphones are far more common. As a result, in order to offer decent smartphones at a comparatively low price, some operators are applying a measure of innovation, by working on – or bringing in – a product that is adapted to their customer base at a more appropriate price point.
BOUGUILA: In this day and age it is all about availability and affordability in the mobile market. The penetration rate for smartphones rose from 17% at the end of 2014 to 35% by end 2015; that sort of year-on-year increase represents significant growth.
So far, the principal strategy of operators has been to flood the market with entry-level products. Currently, Chinese manufacturers are offering the best solutions at the best price point; however, the government still has its role to play by lowering prices and reducing taxes and fees on handsets so that price-sensitive subscribers can make the most of the economic benefits of mobile broadband.
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