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.