Wednesday, November 15, 2006

Rural broadband flop (?) and CDMA 450 rumors

Update--CDMA rumor
The rumor may be just that. Triatel says it has had some talks on practical cooperation (purchase of handsets, etc) with Nordisk Mobiltelefon, (Swedish language only) the Swedish CDMA 450 operator that is building out at present (Latvia, again, is ahead here, as it was on HSDPA deployment). No merger talks, says Triatel CEO Martins Klevers.

There doesn't seem to be a stampede to submit bids in the Ministry of Transport's tender for rural broadband solutions which closes December 18. When I checked, the following companies had not yet decided whether to apply--Unistars, Latvenergo Telecommunications, Triatel, Latvian Railways, the State Information Network Agency and, of course, Lattelecom. Everybody seemed to be trying to make sense of the 70 page tender regulations and various forms and tables and guarantee papers and certificates and other shit to be filled out (there's European Union money involved, that's why), plus some pretty strict rules to be followed on quality of service, etc. At the end of the day, you can get 35 % government and EU funding for a rural infrastructure project, that is, a fat wire or wireless pipe from which local ISPs will draw internet bitstreams and sell them to the poor peasantry, rural households and small businesses. The total jackpot is almost LVL 4 million, which means the private sector has to come up with another LVL 7 million.
As one executive experienced in wireless broadband in Latvia put it, there seems to be no business case for this. It would be a different story if there was some form of support for the end user, perhaps a program of subsidized PC purchases and a premises-equipment subsidy (for a WiMax or other wireless internet gadget) Perhaps it is too early to say that the tender will be a flop and no one shows up, but the possibility cannot be dismissed.

CDMA rumors

Someone may be sniffing around to acquire Triatel, the Latvian CDMA 450 telephony and wireless broadband operator. Rumor has it that a Scandinavian company seeking to revive a 450 Mhz network in its home country with CDMA 450 could be involved. I am checking this out for the paper. Or the rumors could have arisen from the Scandinavians talking to Triatel about a roaming agreement, pretty ordinary stuff in the business.


Bleveland said...

I guess the potential flop is good news for Triatel and / or those who eventually might intend to acquire it and I guess Maarten van Engeland does not cry many tears for a "flop scenario" either :-)

Ok, the rumour was likely just that. It would have been a somewhat unexpected move from the Nordic guys you mentioned to already take over Triatel since they are still nothing-what-so-ever at home in Vikingland. People in Sweden wonder, after soon 2 years, whether these fellows are for real or just a scam. They claim to become the best coverage wireless ISP I Sweden (but not much action so far). Well, for sure they got licences for CDMA450 early 2005, but just 2 channels of 1,8 MHz each which means no f*cking capacity.
The same issue that is going to mess with Triatel in (sub)urban areas if it not already does that. For instance in St. Peterburg, Russia, where 3G technology CDMA450 is well established (= lots of users), people are happy when getting 20-30 kbps peak rates in their terminals. And that is just as good as 2G technology GPRS version 0.1 or so...

So why not just giving that f*cking 4 million LVL jackpot to Triatel and let them convert into a (rural) wireless ISP :)))
It would be quick and easy (or quick and dirty if you want). They already have the network or at least the base for it and a very suitable technology. By allocating all of their 3 frequency channels for EV-DO the capacity should be sufficient, definitely in remote areas.
Hey, don’t get mad at me; the 4 million might be more than Triatel is ever going to earn on their network ;)))
Sure, reality is never that plain easy, there was of course that delicate business case issue already mentioned… but just play with the thought for a while and then, if you prefer, just forget about it.

Juris Kaža said...

There has been some talk that the tender was written to suit Triatel. As for Nordic Mobil, they've been around since 1998 and they paid SEK 86 million for the spectrum. But they seem to have no activity other than soliciting pilotusers.
It looks like some Icelanders and Orkla have money in Nordic Mobil. So it may or may not be for real. though I don't think Orkla would waste its money on some total fly-by-night.

Bleveland said...

That is probably what confuses many; paying quite some amount for the spectrum and still no lift off. One reason is probably that there has been a court issue where competitors to Nordisk Mobil sued the regulator (PTS) claiming Nordisk should not have got the spectrum. This case was solved in favour of Nordisk early last summer, so it might have put the whole thing "on hold" for while. However since this occured more than half a year ago, one would expect things to happen soon...