JOHANNESBURG, South Africa-The trunked radio industry in South Africa is about to experience a revolutionary change with the introduction of new technologies and standards. An entirely new market is being unlocked, and old markets are about to be reshuffled to allow for a more effective and competitive telecommunications environment.
Since trunking licenses for MPT-1237 (Ministry of Posts and Telecommunications’ specification 1237) based systems were awarded five years ago to three operators-Fleetcall, Q-Trunk and One-2-One-the market has grown steadily but slowly and, with a market potential of 35,000 users, remains very much a “Cinderella industry.”
It has not been an easy market to penetrate.
Anton Joubert, Fleetcall’s sales and marketing manager, explains: “Trunking is a complementary technology to cellular. It is an industrial tool, not a device sold to a homeowner. When we initially entered the market, we found ourselves competing with the well-developed two-way radio market and the booming cellular market. It was no easy ride. I am quite happy with what we have achieved so far. But we are gearing up for change.”
Industry sources have criticized existing networks with analog and only partially digital segments as “somewhat antiquated.”
“The existing trunking systems in [South Africa] all have analog technology in them, some with partly digital segments,” said Ed Durand, manager-professional mobile radio systems for Grintek Electronics Systems (GES). “These networks cannot provide the features, consistent high data, high quality of speech and the fast call set-ups compared with more modern fully digital technologies.
“In addition, although some of the existing networks do provide roaming, they do not allow for seamless hand-over between cells. Users moving between cells will lose connection at the time of cross-over and will have to set up the call again,” added Durand.
Mandate for change
All this is about to change as telecommunications in South Africa becomes more liberalized, providing the key that will open the door to further integration of the country into the world economy.
The South African Regulatory Authority (SATRA) began unlocking the door to the trunking revolution in 1998 as it began to explore the possibility of a third-party operator providing national trunked facilities to emergency and other municipal services. Municipalities and emergency services could then, in turn, simply “rent” services from this operator.
To facilitate the process, SATRA conducted a band-replanning exercise and created a trunking band in the UHF area of spectrum 407.625-413 MHz/417.625-423 MHz.
This solved one of the problems experienced by the present trunked MPT operators as they all operate on the 254 MHz frequency band-exclusive to trunking in South Africa alone. This impedes the possibility of roaming and extending networks into Southern African Development Community (SADC) countries.
In July 1998, SATRA issued tenders for a feasibility study on the licensing, technology options and implementation of a third trunking operator, and awarded the task to the Finnish consultancy Omnitele. The results of this study, to be made public later this year, should have an immense impact on the trunked radio industry as a whole.
TETRA’s entrance
Doors have finally been opened to new technologies and competition. For the first time, the radio industry in South Africa has looked at other possibilities, such as TETRA, in a serious light. Major infrastructure suppliers-including Nokia, Motorola, Simoco and GEC-Marconi, and smaller ones such as Tait, Panasonic, Uniden, OTE and Etelm-are seeing the huge potential of this market.
“The wide variety of competition and the different network segments that they target indicate that TETRA will be the major digital trunked radio standard worldwide,” said GES’ Durand. “I believe that TETRA will do for the radio industry what GSM has done for the cellular telephone industry.
“TETRA is ideally placed to meet the demands of a public network. One of the features of TETRA is that it allows the network operator to partition its infrastructure network into different segments. Each user organization will therefore have its own virtual network, completely independent from other organizations. However, by sharing the common network infrastructure, organizations will have considerably lower capital costs.”
GES, a division of the Grintek Group of South Africa, and Nokia recently signed a cooperation agreement for exclusive distribution of Nokia trunked radio network equipment-both MPT-based and TETRA-in South Africa.
“The main advantage of the Nokia product range is that all equipment conforms to open international standards,” said Johan Alback, Nokia’s business development manager. “In addition, the Nokia equipment is backed by an innovative team that continues to enhance and upgrade all our products. Nokia is aiming to have 50-percent market share of the TETRA trunking market by the year 2002.”
Alback quoted the successful Virve network in Finland, where Phase 1 was implemented in 1998 with approximately 100 base stations. The complete network will cover all of Finland by the year 2003. The population density in Finland-at 18 people per square kilometer-is less than that of South Africa, which has 32 people per square kilometer. Sonera operates the network, and Nokia supplies the infrastructure.
In the United Kingdom, the Dolphin network plans to provide a pan-European TETRA network. It is currently implementing its U.K.-wide GBP20 million (US$320 million) network and has been awarded the license for France. Nokia once again has been selected as network supplier.
TETRA complements GSM
Alback does not foresee GSM technology as a competitor to TETRA, but rather as a complementary technology.
“If we look at the case study of Finland, GSM technology was included in the plans for the Finnish authority network,” he said. “But it just proved not to be the right choice. We could not build the Finnish Authority Network on the existing GSM network, and neither of the two GSM operators were prepared to build a new GSM network only for authority use.”
The TETRA standard proved to be a better solution.
Motorola, which is currently supplying TETRA equipment for the London Underground Project, and together with Nokia is involved in the Public Safety Radio Communications Project in the United Kingdom, is also backing the introduction of TETRA in South Africa.
“We believe that it would be the ideal solution for speedy data transfer and interoperability between services,” said Leon Marryatt, Motorola’s manager, Commercial Government and Industrial Solution Sector.
The incumbent MPT trunking operators will have to decide whether they prefer to stay analog or follow the international trend of digital technology.
The fixed operator, Telkom SA, and its future competitor to enter the telecommunications arena, may also wish to enter the new trunked radio market. Currently, Telkom owns 100 percent of Q-Trunk, and Transtel-the proposed favorite candidate for the second fixed license in 2003-is a major shareholder in Fleetcall.
“Fleetcall is definitely positioning itself to be ready when TETRA is economically viable for the South African market,” said Fleetcall’s Joubert. “However, I do not see TETRA as a threat, but as a logical migration to new technologies, especially in the field of public safety.”
“I foresee TETRA and MPT networks running parallel, side by side, for quite some time. Normal commercial customers are likely to stay with the MPT system as the cost is very much lower, especially if centered in a specific regional area, for example Gauteng. TETRA will be more suitable for government-subsidized users.”
Joubert added that the current investment in both trunked networks and r
adios is not to be underestimated and discarded.
“Existing MPT users who have spent well over R3,000 (US$500) per radio
are not likely to change them very quickly for new systems and new radio models, no matter how (much) lighter or modern the unit may seem in appearance. There are about 18,000 trunked radios currently active in the market, with a total value of R50 million (US$8million).
“Considering the units are robust, useful for their purpose and have a lifespan of five to eight years, the user is not likely to get rid of them in a hurry.”
As a supplier, Nokia also is committed to continuing the development of its analog MPT-based Actionet range, which it is currently supplying to One-2-One.
“GES continues to market these products to these customers that prefer analog systems and will continue to support these projects throughout their life cycles,” said Durand.
Chances for iDEN
Another competitor in the trunking fraternity has recently surfaced, and even though it may not directly compete with existing and proposed networks, it is likely to make its mark.
Motorola’s iDEN technology is relatively unknown in Africa, but is about to make its impact both in the trunking and the cellular field. Motorola believes it is the ideal solution for Africa and has approached the various consortia bidding for the third cellular license in South Africa.
“I believe this is the ideal solution for the future third cellular operator in the country as it is a marriage between a two-way radio, a regular press-to-talk two-way radio and a cell phone,” said Bill Hearmon, Motorola’s director of sales in Greater Africa.
He added: “iDEN could create a totally new market as the current GSM and PMR (Professional Mobile Radio) users could be converted into a shared network with such a technology. New customers could be developed. The network could be a national digital mobile communications network providing integrated services to business professionals and individual users alike.”
Among the many benefits the iDEN solution provides, said Hearmon, is the ability to hold a conference with a large number of people at the push of a button on a small pocket-sized mobile handset.
“This new feature will enable the operator to compete with the incumbent operators on a different level than just a price war,” he continued. “I believe that this technology could provide a winning business plan for the new operator. The combination of spectrum efficiency, competitive infrastructure costs, differentiated integrated services and dual-mode iDEN/GSM handsets combine for a compelling justification for iDEN’s place in the revolution of communications in South Africa.”
He pointed to the example of Nextel Communications in the United States where iDEN technology has gained 3.5 million subscribers within a short period of time.
“We are not competing with other trunked systems such as TETRA as they are geared for public safety and the police. iDEN is not meant for a large force,” says Hearmon.
Opportunities elsewhere
The trunking revolution that is about to take South Africa by storm is anticipated to spill into the surrounding African countries, but at a slower pace.
“Unfortunately, Africa is still largely plagued by state-controlled monopolies in telecommunications,” said Durand. “As these controls are relaxed, we see more and more possibilities. In addition, several of these monopolies are now realizing that radio trunking addresses a specific market segment for Professional Mobile Radio users and that it does not compete with the mass consumer market that uses GSM technology. The biggest enabler in Africa will be where countries allow network operators to bring in the necessary capital to develop and operate the network.”
TETRA is being actively promoted in several African countries, and some networks are anticipated to roll out in the next five years.
