A Long-Awaited Interview with a Telecom Expert and a Rejection from the World Bank

My single most difficult interview to nail down was the one I thought would be the simplest. I wanted to find a telecommunications expert who could explain, in plain English, the fairness or unfairness of the frequency spectrum allotted to Jawwal and Wataniya as compared to Israeli providers.

In general, the more spectrum a telecommunications operator has, the more subscribers it can serve. Lower band frequencies of 800-900 MHz generally travel farther and penetrate walls better, and thus are more desirable than higher band frequencies of 1800-2100 MHz. However, spectrum is also a hotly contested scarce resource and must be divided between military, science, government and companies that naturally seek to maximize their allotment.

Jawwal’s 1996 license gave it 4.8 MHz in the 900 band for a target of 120,000 subscribers. The company now has 1.5 million subscribers but the same amount of frequency. For multiple periods over the past ten years, Jawwal stopped selling SIM cards because its network was running overcapacity due to lack of frequency, according to Jaber.

By comparison, Israel’s leading cellular company, Cellcom Israel Ltd., which has about 3.2 million subscribers, is satisfied with its total spectrum allotment of 27 MHz. In its 2008 annual report, Cellcom states: “We believe that our available spectrum is sufficient for our needs.” Another Israeli company, Orange, states in its 2008 annual report: “We have built an extensive, resilient and advanced network system in Israel, allowing us to offer our services with extensive coverage and consistent high quality.”

After over a month of more than 40 email and telephone exchanges with the World Bank PR Office, their experts agreed to give me a one-page written statement on the matter that did not once mention the words “Israel” or “Palestinian Territories.” They also told me that I could not use the statement unless I quoted it in full, which was impossible.

I then posted a query on Profnet.com and found Derek Kerton, a principal analyst with Kerton Group, a telecommunications consulting company. He told me that most major carriers in the world have at least 10 MHz, and that Jawwal’s frequency allotment of only 4.8 MHz is likely to either unduly impede their growth or cause service disruptions.

“I’m not aware of any successful cellular companies with just [4.8MHz] in a competitive market,” he said. “It may ‘work’ in the rare case of a monopoly, only because the logical choice of the monopolist is higher price and constricted supply, which negates the constraint of limited spectrum. But whichever the cause, the communication needs of the populace are underserved.”

He continued, “If the carrier does succeed at market, and utilizes all 4.8MHz, it becomes the victim of its own success. The crowded network drops calls, but it cannot install additional channels, nor properly serve the demand they worked so hard to create.”

Since I knew the credibility of my article hinged on getting an expert quote like this, I felt exhilarated and relieved that that Kerton was willing to speak with me on the record. Kerton’s frankness also left me with lingering questions about my interactions with the World Bank PR office. I suspect that the World Bank seeks to maintain its non-political role as a “neutral” group of technical advisors, and perhaps avoids quotation in articles that might appear to take a political stance.

Mobile Phone Usage by Israeli Customers Versus Jawwal Customers*

Mobile Company	Number of subscribers	Monthly revenue per user	Average minutes of use per user	Frequency spectrum (MHz X 2)
Jawwal (Paltel Group)	1.5 million	71 NIS	130 minutes	4.8 MHz (900 bandwidth)
Cellcom Israel Ltd.	3.2 million	140 NIS	323 minutes	37 MHz (850 and 1800 bandwidth)
Orange (Partner Communications Ltd.)	2.9 million	145 NIS	358 minutes	20.4 MHz (900 and 1800 bandwidth)
Pelephone Communications Ltd.	2.7 million	128 NIS	323 minutes	46 MHz (800, 1900 and 2000 bandwidth)

*According to 2008 company reports and interviews with company representatives.

An Interview with Ammar Aker, CEO of Jawwal

A 50-meter telecom tower, one of the tallest in the area, sits right outside the office of Ammar Aker, CEO of Jawwal. Aker positioned his office here because Palestinian villagers sometimes believe that telecom towers caused cancer, and he wanted to demonstrate that it was safe.

Like the Wataniya headquarters a few kilometers away, the Jawwal headquarters boasted the sharp, immaculate and professional facilities that one would expect of any major company. This was a sharp contrast to the drab, humble building that houses the Palestinian Ministry of Telecom and Information Technology.

Inside Aker’s office was a large jar full of Israeli SIM cards, which he declined to have me photograph. These cards were collected at one of many recent community campaigns designed to convince civilians to give up their Israeli phones and use Jawwal instead. The campaigns, Aker said, are more about convincing people of Jawwal’s better service and calling plans than invoking purely nationalist reasons to switch.

When asked about Wataniya’s current difficulties, Aker, like Jaber, said that this all sounded very familiar. Jawwal has had a shipment microcells used to mitigate dropped calls sitting in Israeli customs since October of 2008, according to Aker.

Recently, the Israeli government told Jawwal that they are no longer allowed to import these microcells. “We’ve been using these microcells for the past eight years and now we cannot use them?” Aker asked.

Aker also echoed Jaber’s comment that Wataniya’s entrance into the market would cause consumers to be more appreciative of the service that Jawwal has been able to provide under the crushing weight of Israeli restrictions.

He made the analogy of the wrongness of judging an Israeli civilian who “lives in Tel Aviv and within a few minutes can run to the airport and travel all around the world” against a Palestinian civilian who “faces all these difficulties with checkpoints and travel restrictions.” The same, he said, is true when comparing mobile service providers. For this reason, he is “waiting for [Wataniya] to start, praying for them to start.”

An Interview with Abdel Malik Jaber, Outgoing CEO of Paltel Group

I met with Abdel Malik Jaber, the outgoing CEO of Paltel Group of which Jawwal is a subsidiary, on the day after he returned from Jordan, where the historic merger agreement between Zain Group and Paltel Group had been signed.

Our interview had originally been scheduled for the day before, but when he got tied up in Jordan, he graciously instructed his secretary to give me his cell phone number and have me contact him directly. Jaber’s spacious office included an artistic rendering of a fruitless olive tree superimposed on the picture of a young girl.

“Definitely nobody can accuse the business community of being anti-peace,” Jaber said. “The business community not only aspires, but works hard for peace because it has a vested interest in having peace in the region. But we are the main losers out of the continuation of the conflict.”

When I asked about Wataniya’s difficulties getting its frequencies released and its equipment cleared through customs, Jaber said the Israeli government regularly used the guise of “security” to renege on commitments. His company encountered difficulties similar to Wataniya’s in trying to get more frequency for its use.

“Since 1996, we have asked for frequencies from the Israeli side and all the time we are having difficulties,” he said. “How come we get about a tenth of the spectrum [that the Israelis get]?” Jaber said that the Israelis’ failure to implement what they have signed on is “a clear indication that the Israelis don’t want to see private sector development in Palestine.”

He continued, “The Israelis have plenty of frequency in the 1800 range. It doesn’t make sense that they are not giving frequencies because of shortages or the army or something like that. No one can convince me of that.”

Jaber also challenged the notion that Jawwal was a monopoly. “When we started in the Palestinian market, we were 25 percent of the market,” he said. “We were efficient. We were effective. And we competed with the Israeli operators on our own.”

A Lively Interview with Allan Richardson, CEO of Wataniya

Before beginning our interview, Allan Richardson, the Scottish CEO of Wataniya’s operation in the Palestinian Territories, showed me the view from his office window.

“You see these houses?” he said, pointing to a new Palestinian housing community. “They weren’t here two years ago. There was nothing here, just a field. They’ve been here a year now. They funded them, built them—it’s all Palestinian money.”

He then brought me to an adjacent room, where we looked out another window. “That’s the settlement,” Richardson said, “That’s how close they are. And you see these towers there? That is a Jawwal, CellCom and Orange [tower]. Cellcom is now selling 3G packages into Palestine from there and from all around the West Bank. So if you’re going to ask about competition with Israelis, there is competition. It’s not big, and the Israelis will deny it. But the fact of the matter is that’s a 3G tower there.”

Opposite the window in this same room was a large paper map that’s taped onto the wall. Richardson pointed to the dozens of marks where Wataniya’s towers are being built or will one day be built, and how Area C, which is reserved for Israeli settlements and military posts, crisscrosses the entire West Bank.

“We have an operation in the Maldives and the guy who runs it… talks about the archipelago of the Maldives and I talk about the archipelago of Palestine,” Richardson said. “I said ‘you’ve got water between yours and I don’t—I’ve got Area C.’ He’s got sea. I’ve got Area C!”

After the tour, we sat down in Richardson’s neat, polished office and talked for about 40 minutes. Richardson peppered the conversation with colorful jokes and analogies, but he repeatedly returned to the serious point: His company was losing millions every month because the spectrum agreement had not been carried out as planned.

Richardson, who started mobile networks in post-war Iraq and Afghanistan, said the obstacles Wataniya faced in those countries were “nothing like” those confronted in the Palestinian Territories. “Everybody makes lots of promises. But I’m still sitting here with no [frequency] spectrum and not all my equipment,” he said. “From my perspective, it’s a very simple thing. We didn’t get it. We were promised, and [the Israelis] didn’t deliver.”

In addition to the undelivered frequency spectrum, Richardson reported that some of Wataniya’s essential equipment has been awaiting inspection at Israel’s Ben Gurion Airport for more than five months. Israeli officials, he said, promised him the equipment would be released by the end of May. However, I contacted Richardson’s press secretary in early June, and the equipment was still stuck in customs.

At the conclusion of the interview, I asked Richardson if he believed that Wataniya would launch soon. “I’ve got to be optimistic,” he replied. “I know it’s being dealt with at the highest levels. And it’s viewed as a bellwether of what can be accomplished with this size of investment in Palestine.”

An Impromptu Interview with Palestinian Official Suleiman Zuhairy

I met with Suleiman M. Zuhairy, deputy minister at the Palestinian Ministry of Telecom and Information Technology, the day after my meeting with Nati Schubert. I had no appointment, and literally just showed up at the door of the ministry, which is located one block away from the residence of Palestinian President Mahmoud Abbas.

The wall was cracking in the hallway of the ministry building, and the elevator would not move when I pressed the button for the first floor, so I took the stairs instead. There was also a ladder with paint on it sitting squarely in the reception lobby.

Before meeting with Zuhairy, I met with Kamal Hassouneh, the Minister of Telecom, who seemed to be in a solely political role. He and I spoke in English and Arabic, and I was surprised that, despite his position, he did not know the word for “tower” in English.

The real technical expert at the ministry was Zuhairy, who had worked there for more than ten years, served as Nati Schubert’s primary counterpart, and seemed to have an encyclopedic knowledge of the issues. Zuhairy’s office included a map of British sea cable routes along the ocean floor from 1870 to 1970.

“Britain was governing all the world through these cables,” Zuhairy said. “One of the most important connections was in Yemen. The Middle East connected to London through Yemen…This is how telecommunications was started….One of the most important things to govern the whole area was with communications. This for me is what is interesting about it.”

Zuhairy dressed formally, smiled a lot, and seemed very eager to plead his case and make sure that I understood the technical details.

Though I had come unannounced, Zuhairy talked with me for more than one hour. He also gave me copies of the July 2008 contract between the Israeli government and the Palestinian Authority and put me in touch with officials from Tony Blair’s Quartet, whom he said were pressuring Israel to “at least implement what we already agreed upon with the Israelis.”

Throughout the interview, Zuhairy returned to the point that the Palestinian ministry was promised frequencies to allot as it saw fit. “It is not an Israeli problem how the Palestinian side will manage these frequencies,” he said. “The Israelis shouldn’t interfere between Jawwal and Wataniya. It is a Palestinian competition. We didn’t interfere…[with] any Israeli company.”

Zuhairy also rejected Schubert’s comment that the Palestinians had an internal problem that they needed to resolve before the frequencies could be released. “The only one thing they are trying to hide behind is that we have to [make a sharing arrangement] between Orange, Jawwal and Wataniya," he said. "Jawwal is a company and Wataniya is another company. [Jawwal] has the right not to share frequencies.”

An "Informal" Interview with Israeli Official Nati Schubert

At a meeting with a press officer at Wataniya, I learned of the company’s difficulty in getting its frequencies released. Intrigued, I called the Israeli Ministry of Telecommunications to arrange an interview about this issue and was referred to Nati Schubert, head of the frequency division.

Schubert’s office in the ministry’s Tel Aviv skyscraper was casual and unpretentious. Papers, plastic cups, a pile of plastic orange straws, bottles of seltzer water, knick knacks, and a calendar with puppets made by a foundation that supports the mentally challenged adorned his desk. On the wall was a colorful poster showing how airwave frequencies have been divided in Australia.

In our first meeting, which lasted about one hour, Schubert wore khaki pants, an airy blue button-down t-shirt and polished black loafers. He talked quietly and very slowly, with a heavy accent, but chose his words carefully and precisely.

“No tape recorder,” he told me, “I prefer this be more informal.” I persisted, arguing that the tape recorder will insure that I get his quotes down verbatim, but he politely declined, and I spent the remainder of the interview taking copious, rapid notes.

When I asked Schubert why Israeli companies receive far more airwave frequencies than Jawwal, he used an analogy that shows his knowledge of my home city, Chicago. “When you go from Jerusalem to Tel Aviv, you have two lanes in each direction,” he said. “If you go from Chicago to O’Hare, you have maybe five or six lanes, right? You need more lanes [in Chicago] because you have more traffic.”

Schubert insistently declined all questions relating to why Wataniya had not received its frequencies. “I don’t want to get into it,” he said. “[The Palestinian Authority] have some problems. We are trying to assist them to resolve…I realize that you are trying to do your journalism job by asking the same thing with different angles, but that’s all I will tell you.”

When I asked him if officials at Paltel and Wataniya knew about these “problems,” he told me that he was not in communication with officials from Jawwal or Wataniya. “If they speak, they speak to the Palestinian Authority," he said. "I don’t know what they know."

***

A few days later, I met with Schubert again, after Palestinian officials gave me copies of the July 2008 contract between the Israeli government and the Palestinian Authority, which set a time table for 4.8 MHz to be released to Wataniya by April 1, or June 1 at the latest.

Schubert was not pleased. “You don’t go out and provide copies to everybody without agreement from the other side," he said. "This is an agreement between the Israeli side and the Palestinian Authority….Even in the private sector, when you get an agreement between two parties, one party does not hand out the agreement.”