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Telecommunications Sector Should Move to Modern Business Future

National Yemen

Dr. Ali Nagi Nosary

Asma al-Mohattwari

The world is living at an accelerated pace, especially when it comes to communications. Inevitably, the telecommunications sector will be affected. National Yemen interviewed Dr. Ali Nagi Nosary, the Chief Executive Officer of Yemen International Telecommunication Company (TeleYemen), in order to have a clear picture of the company’s role in the path forward.

 Could you brief us about TeleYemen and its role in the international telecommunications industry?

TeleYemen is one of the leading companies in the telecommunications sector. It was originally a British company, established in Yemen in 1971 under the name British Cable & Wireless Company. In 1990, the company transformed into a joint Yemeni-British corporation under the name TeleYemen  and the public telecommunication (PTC) began to own 35% of its shares.

In 2003, the PTC owned 49%. Its property moved wholly to the PTC on 31 December 2003, upon which the PTC entered in partnership with Yemeni Post Authority, owning 75% of the company. Since its establishment, TeleYemen has been concerned with all aspects of international communications, including both voice and data services.

How can TeleYemen deal with changes in the industry, especially in the face of low-price alternatives?

It is very important to highlight that the transformations and the technology advances in Telecommunications achieved in the past decade are equivalent to that of the last century. There was a very rapid acceleration in technology used, and this is still the case today and tomorrow. This acceleration is a result of the convergence between Telecommunications and Internet technologies that means we live in a “convergence age”.

Convergence means to provide multiple services through a single media (point). One of the examples of convergence is to get today many services (Voice, Data, Television, Banking, ect.) through the Internet. It is very important because it means that users can get a bundle of services which will include everything.

Through Internet subscriptions, users can use special applications like Tango, Viper, and Skype, which are pushing users to replace traditional telecom networking. Voice-over-IP technology will allow calls to pass through the internet. This, of course, has a negative impact on traditional operators, and like any others, TeleYemen will face many difficulties if it cannot modernize its business.

It is well known that the telecommunications sector is the second stream for the state treasury after oil. Do you think Yemen’s ascension to the World Trade Organization (WTO) is a positive or negative at the moment, and why?

I do not want to comment the process of joining the WTO because  we can see different opinions, but what I will say is that we in the telecommunications sector have real fears and concerns about dragging behind the WTO ascension. WTO accession without considering the country interests in telecom sector, will have negative consequences. WTO protocols include some  commitments to liberalize all telecommunications services before January 2015. It is clear that these commitments cannot be implemented, and applied this date.

Telecom sector is not ready to be fully liberalized before 1 January 2015. We have a lot of preparations to be done before liberalization of telecommunications services and this as followed in many other countries prior to liberalization.

There are four main steps. First, we must draft the appropriate laws and legislations that will govern the open market in telecommunications. We have had a draft law in parliament since 2009 that is waiting to be approved and issued.

Second, we have to establish an independent authority of regulation before any more liberalization is attempted. The mobile sector is already liberalized, and 80% of market share has gone to the private sector. As in many other countries, Yemen must create  independent regulator, in order to safeguard consumers and ensure fair competition , with equitable treatment between major players. We must also ensure that state taxes, revenues, and necessary resources are assured, and applied towards, all operators. Independent regulator would also apply transparent policy. Believe me, without legislation and regulation, risks are very big not only for public operators, but also the private operators also.

The third step is preparation for liberalization in public entities like TeleYemen, and especially the PTC, because it has more than ten thousand employees and must be ready to work in the free market. PTC especially needs a new business stream, and also a means for keeping its market shares.

Any country that joins the WTO cannot allow its successful public companies to go under, which includes PTC, since it makes approximately YR 60 billion per year. Since liberalization will directly affect it, I think that the role of government, especially the Ministry of Telecommunications, will be to find suitable solutions to guarantee the rights of all players.

The fourth step is to apply  gradual and planned liberalization, we must go further with evaluations at each step of the way. We need to go beyond and find new ways to enlarge the market, and to do that we need efforts from everyone, especially through real partnerships between public and private sectors.

Telecom sector is facing a lot of technological, regulatory, and legislation-based challenges. The main challenge is coming from the precipitated accession to the WTO, so the government must study its effects carefully. We are not against the WTO membership, but we have real concerns and we hope that the government will consider.

Sometimes we read advertisements in newspapers warning of bypass international calls. Can you explain to us how these calls pass?

International calls bypass is a very important issue, and a challenge for the industry. It is a global phenomenon that is a result of convergence in telecoms. The bundle of services now coming through the internet increases the possibility for more calls to come through the internet illegally. The bypassers are using any internet connectivity, and use simboxes to initiate calls in Yemen to make it look like a local call.

What is the benefit for the bypassers?

They get revenue from outside dealers and are promoting themselves, because they sell the calls to Yemen from outside at a certain price lower than the normal price.

Have you arrested individuals or institutions working on bypass calls recently, and what were the results?

Yes, we have arrested some people and they are at court. We already localized some locations in Sana’a and Mukalla, and we are coordinating with the Ministry of the Interior to find out how to deal with this kind of illegal businesses because this phenomenon really harms the economy.

Recently you were in a field visit with the Prime Minister to Aden. What was the role of TeleYemen  in that visit?

The visit was to inaugurate a big project in the Telecom sector. It is one of many that will initiate Yemeni participation through TeleYemen in one of the main new submarine cables called AAE1 (Asia, Africa, Europe). These submarine cables will connect from the West to the East, where cables will arrived to Marseille from the West and reach as far as Singapore. The length of the cables is around to 25 to 26 thousand kilometers, with a huge capacity and a cost of around $750 million. Yemen will pay about $44 million to participate.  This project will play a significant role in providing international connectivity for the internet in Yemen.

TeleYemen is like the rest of government institutions that are exposed to destruction: cutting cables, jamming, and call theft. How do you explain all of that in light of the difficult economic conditions?

The security situation in Yemen is very difficult and affecting the whole performance in the country and this is reflected in each sector. The telecom sector is affected a lot, mainly by continuous damage of cutting the cables and the theft of copper cables.

The elimination of sabotage requires more effort from security and the judiciary to criminalize and punish who are doing it. Unfortunately, many criminals arrested on theft and cutting cables cases are not given deterrent sentences. Citizen should know that telecom is neutral, and not involved in any political conflicts.

Do you want to say something to those participating in these acts?

Security authorities, political elites, citizens and civil society organizations should join hands to eliminate these negative phenomena and acts of sabotage. We are a country which is in need of a riyal, but millions are spent to repair power and communications lines.

To this day, Yemen is still without a Telecom Regulatory Authority and the Ministry of Communications and Information Technology is doing the role of the regulatory authority. Will the existence of a special body improve the telecommunications sector in Yemen?

Any investment needs its own environment to organize and motivate it to have strong and fair competition, so the role of a regulatory body is pivotal in this aspect. It is the key to improving and developing the telecom sector.

In March, you demanded that the government reforms the regulatory and legislative framework for the telecommunications sector. Did you receive any response?

The government is seriously discusses this issue in a committee in the parliament and it is expected to issue the decision in the near future.

Is there a competitive pricing for international calls and how it is measured?

We suffer greatly from the free applications despite the many positives they have because these applications are like a parasite. In spite of all these threats, Teleyemen is always constant on its pricing and I expect that it will announce discounts this year.

Which are more frequent, received calls or outgoing calls?

Yemen is a low-income country so the ability to make external calls is less than other countries. Also, Yemen has a great number of people outside the country, so people outside are more able to make call to their relatives in Yemen. So the ratio of the  received calls are more than the outgoing calls.

Citizens have not noticed progress in the field of international communications. Is this true and do you actually provide international communications services?

We are obliged to keep coming up with new services and one of our big projects is the large investment in submarine cables will help us to develop further international bandwidth capacity to Yemen. One of the new projects TeleYemen signed on January 27, 2014, with Seventeen of the world’s most prominent telecom service providers is Asia Africa Europe-1 (AAE-1) cable system.

The AAE-1 submarine cable spanning approximately 25,000 km, will be one of the first unique cable systems connecting Yemen to Hong Kong, Singapore, Middle East, Africa and Europe and providing an alternative low latency route between Far East and Europe. The share of Yemen is 44 million USD.

How do you see the future of international telecommunication, and how do you consider the future of TeleYemen, considering that it is under pressure to hand itself over to the private sector?

We cannot talk about the international telecommunication independently from the telecom sector. International telecommunication services are one segment of the telecom sector. The development of this segment is directly related to the whole sector. Global business should play a significant role to satisfy local operators in order to provide more services and flexibility to be connected to the world. Our mission in TeleYemen is to ensure this trustful connection and enable the local operators to satisfy their customers.