London — WiMAX used to be the technology of choice for data insurgent challengers but now they seem to be shifting to LTE.
West African ISPs Surfline (in Ghana) and YooMee (Cote d'Ivoire) both look like stealing a march on the mobile operators with LTE roll-outs early next year. Russell Southwood spoke to YooMe Africa's CEO Dov Bar Gera about what the company is looking at doing.
YooMe is a privately held Swiss company that has two African ISP operations, one in Cameroon and the other to open shortly in Cote d'Ivoire.
In the past CEO Dov Bar Gera has set up and sold ISP operations in Eastern Europe before moving his focus to Africa.
Its Cameroon operation has deployed WiMAX 16e and it claims to have covered 85% of the population in the country's two main cities, Douala and Yaounde with 20 base stations. Its main competitors are the two mobile operators (MTN and Orange) and a handful of smaller ISPs.
It has taken significant market share, having around 20,000 out of the 50,000 broadband subscribers in the country if you define broadband as over 512 kbps download speed.
Overall Bar Gera estimates that there are probably around a million Cameroonians who use the Internet at least once a week.
But there is a cap on growth as the monopoly international bandwidth provider Camtel has not yet reduced its wholesale prices: "Because of this monopoly, international bandwidth is 5-7 times more expansive (than in other more competitive countries)". Obviously higher wholesale prices lead to more expensive retail prices, which in turn means a smaller market.
YooMee's next move is to roll out an TDD LTE network in Cote d'Ivoire's capital Abidjan. It will launch a network of 35 base stations from Alcatel Lucent in the second half of February, which according to Bar Gera will give "good coverage in populated areas. We will also be looking at the lower income segments."
He's quite dismissive of WiMAX vs LTE comparisons:"Subscribers don't care whether it's WiMAX or LTE, they want to know the speed and price of the service.
In Cote d'Ivoire we will be delivering up to 2 mbps." This speed is significantly less than Smile Telecom's 6 mbps service. Prices have not been finalized yet but are likely to be in the US$32-51 per month range, which looks very competitive.
However, he does say:" LTE is the best choice for YooMee to build wireless broadband networks as it is the latest worldwide standard to offer mobile internet services replacing technologies like WiMAX." Alcatel-Lucent currently has more than 40 LTE and 55 small cells networks globally.
So what did he think customers were likely to do with their additional bandwidth?:"Right now, there is a clear lack of local content. The majority of the bandwidth used by residential is for You Tube, some free music sites and a little torrent".
"We will see an increase in grey area downloads through torrent, a major increase in video upload to sites like Facebook, more watching of foreign TV stations, but at the same time an increase in "more intelligent" applications like education MOOCs".
Bar Gera is not troubled by the possibility of the mobile operators rolling out LTE. In Cameroon, he's certainly got a point as the regulator ART has been one of the slowest to grant any 3G licences, let alone 4G licences.
Furthermore, with the Government, it has granted a 3G monopoly to newcomer Viettel. In Cote d'Ivoire he reckons that it will be another two years at least before a 4G licence is granted.
But he's not impressed by the mobile operator's attitude to Internet and customer service:" Internet access has very little relevance to mobile operation.
Pure internet play has a clear advantage in quality, customer experience and availability of content to the subscriber. I personally don't believe that the mobile operators have a significant "captured market" due to their mobile phone customers".
YooMee has ambitions to roll out in other African countries and will first make sure its new operation in Cote d'Ivoire is working well before looking at other Africa countries in 12-24 months time.