Monday, 27 April 2015

Access launches first LTE voice data network in Malawi aimed at high-end niche customers, leaving CDMA for lower end customers

Faizal_OkhaiAccess Communications has launched Malawi’s first LTE voice and data network using its valuable 800 MHz spectrum. It wants to develop a high-end product for its existing niche customers. Russell Southwood spoke to Faizal Okhai, CEO of Access about what he’s got planned.

Access launched its EVDO Rev A CDMA network in December 2009 and covered 4 Malawian cities. The licence was for fixed voice and data but the handsets allowed a significant coverage area from the base stations. Since its launch, it has gathered 48,000 subscribers which makes it much bigger than the average independent ISP but a niche player alongside the country’s mobile operators.

So why did he decide to go into LTE?”It’s getting difficult to get the CDMA handsets and the GSM standard has jumped ahead. We’re only getting 3 mbps and customers are demanding more. Everything’s going data centric – iPad, iPhone and so on – it's the only way to go and it’s a good way of using the CDMA frequencies.”

On frequencies, he’s in a strong position because he has a much coveted 800 MHz band allocation. At present the service is at “proof of concept” stage with one base station and still needs regulatory approval:”We’ve a meeting with the regulator and we’re not sure what the fees will be for the frequency (for the new proposed services.”

The initial roll-out is relatively small and he will decide later whether to scale up. With its one Nokia base station the coverage goes to about 80 kms but it’s patchy, both inside buildings and geographically. If it all works out, he’s planning 6 base stations in Blantyre and 4 in Lilongwe.

So what will he do about handsets?”It’s not going to be a mass market product with Malawi’s level of GDP”. Customers will buy handsets from existing dealers that will offer 4G handsets for all the usual international brands.

The LTE service will be like the existing CDMA service, the customer will be charged a certain amount per month for both a voice and data service, with both unlimited and defined voice and data packages.”

The average price point will be about US$50 per month with 10 plans available (ranging from US$10 to US$200 per month), four aimed at business and the rest at high-end individual users. These will be mainly pre-paid in advance but there will also be a scratch card bundle valid for 30 days with unlimited voice and 10GB of data.

As elsewhere, as an independent he has a small window of opportunity before the mobile operators enter the arena:”They are both actively looking at it but it depends what frequency they play in. In 6-12 months’ time they will have some kind of LTE.”

He aims to keep his CDMA service going for lower end customers as subscriber numbers are still growing although not as fast as for traditional mobile operators. Currently a CDMA modem costs as little as US$15-20 and he plans to sell them without making a margin. He says he will focus the service on data as voice prices are “just too commoditised”.

So how might user habits change with an LTE service?”What they do has already changed substantially over the last couple of years. There’s so much content consumption but much less content creation the uplink speed is unusable. But it looks like users are willing to pay for it so content creation will start playing. As a snapshot of existing use, 70% after hours is You Tube.

Source: Balancingact-Africa


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