Palestinian mobile firm in political firestorm delays launch - again
Wataniya has 'nothing to do with the Goldstone report,' says CEO of cellular firm denied airwave spectrum.
Israeli leaders have highlighted loosened security restrictions, an economic growth rate of seven percent, and the construction of state-of-the art shopping malls and cinemas in the West Bank as an indication of what Gaza residents could enjoy - if only its Hamas rulers chose to abandon terrorism.
But the struggles of a multi-national cellular company elucidate the political roadblocks still stifling businesses in the West Bank. On Oct. 15, Wataniya Mobile once again did not launch as planned because it has not received its promised 4.8 MHz of airwave frequency spectrum.
Wataniya hoped to launch last April, but unwittingly became a political pawn in clashes between Israel and the Palestinian Authority. Tensions piqued last week when the government, which controls the airwaves in the Palestinian territories, threatened to withhold Wataniya's spectrum indefinitely unless the PA dropped its demand for Israel Defense Forces officers to be tried at the International Criminal Court. This followed the publication of the controversial Goldstone report, which accuses both Israel and Hamas militants of war crimes during the December-January hostilities in Gaza.
"[Wataniya has] nothing to do with the Goldstone report - nothing at all," said Allan Richardson, the Scottish CEO of Wataniya. "We've been trying for two and a half years to get this spectrum... We're just trying to build a network that's competitive and gives the Palestinian people a choice. That's it."
Richardson previously started mobile networks in post-war Iraq and Afghanistan, and said in a May 2009 interview that, "the obstacles [Wataniya is] suffering from [in the West Bank] are obstacles you'll never get anywhere else in the world."
The government has suddenly backed away from its threat not to give the PA any spectrum for Wataniya and has resumed the position it announced last month that it would provide 3.8 MHz. This is less than the 4.8 MHz that Wataniya was promised in a complicated and bitterly disputed contract brokered by former British prime minister Tony Blair and signed by Israel and the PA in July of 2008. Both sides agree that Wataniya was promised 4.8 MHz, but Israeli officials insist this allotment was conditioned upon unnamed commitments that the PA has not fulfilled.
In an August press release, Wataniya's board of directors set Oct. 15 as the final launch deadline and said they would demand compensation from the cash-strapped PA, whom Wataniya paid for its license, if the 4.8 MHz was not received. The PA, in turn, announced its plans to demand compensation from Israel if it failed to follow through on its promise to provide the spectrum.
"3.8 MHz will not support enough subscribers and will not allow us to deliver the quality we need to get into this market, Richardson said in an Oct. 16 interview. "The PA had an agreement with the Israeli government for 4.8 MHz of spectrum. Based on that agreement, we made our investment."
He added, "To be quite honest, we haven't got a lawyer yet... The worst case scenario is we don't launch. But I don't see that happening. I'm an optimist. I believe we will launch."
Richardson's contention that 3.8 MHz is not enough to operate a viable cellular network is shared by many telecom experts. Most cellular carriers worldwide operate on at least 10 MHz of spectrum, according to Derek Kerton, a principal analyst with Kerton Group, a telecommunications consulting company.
In 1996, Israel allotted 4.8 MHz to the PA for use by Jawwal, the sole Palestinian cellular provider that now serves 1.5 million subscribers. Jawwal's parent company, Zain Palestine (formerly Paltel Group), constitutes about 50 percent of the Palestinian stock exchange. Despite this financial success, Jawwal stopped selling SIM cards on multiple occasions because it didn't have sufficient frequency spectrum to support new customers, according to Jawwal's CEO Ammar Aker.
By contrast, Israel's three major cellular companies, which support a larger and denser population of subscribers, have between 20 and 46 MHz of spectrum and are generally satisfied with their allotment, according to company reports.
In addition to its undelivered spectrum, Wataniya has waited more than six months to have some of its equipment cleared through Israeli customs. Jawwal has experienced similar challenges. The average customs holdup for Jawwal base stations and towers is six to 18 months, and some of Jawwal's switch equipment has been held in customs since 2005, according to Aker. Israel recently prohibited Jawwal from importing microcells used to prevent the dropped calls for which Jawwal has become notorious.
Palestinian-American businessman Sam Bahour, who oversaw the establishment of the first Western-style shopping mall in the West Bank, said that Wataniya's struggles are "a clear example of... Israel, the occupier, continuing to micromanage the Palestinian economy, [which is] the core reason why the Palestinian economy is stunned."
Tony Blair has not weighed in publicly on the details of the political dispute over Wataniya's frequency allotment, but a spokesperson for the former British premier said in a June 3 statement that the release of telecommunications frequency was "an important part of the set of [Mr. Blair's] understandings with the Israelis." Blair has pressed Israel to release all 4.8 MHz of frequency, arguing that this will bolster the moderate government of PA President Mahmoud Abbas and foster the Palestinian economy.
The impact of Wataniya on the Palestinian economy would likely be powerful and lasting. The competition posed by Wataniya could improve the quality and cost of Palestinians' phone service. Richardson reports that about 20,000 have already registered to receive Wataniya numbers. While Wataniya currently has 250 employees, the company predicts it would create more than 2000 direct and indirect West Bank jobs after its launch.
However, Wataniya's continued paralysis at the whims of political battles could jeopardize the West Bank's fragile growth and scare off future investors. Bahour said that these investors are "willing and ready to build a true Palestinian economy the second Israel ends its military occupation."
Nati Schubert, senior deputy director general of spectrum management at the Israeli Ministry of Communications, said that when Wataniya is still in its launching phase, 3.8 MHz should be "enough." He insisted that Israel has committed to give the PA 4.8 MHz "over time."
"Wataniya is good for Israel. It's a win-win situation," Schubert said. "Israel losses [if Wataniya fails] because [Israel] wishes to improve the relations with the PA first by improving the commercial situation."
Ashley Bates is a Chicago-based freelance journalist. She follows the Wataniya controversy on her blog: www.palestinemobile.blogspot.com