NABLUS, West Bank-Many who conduct business in this often-troubled region say peace would come much more quickly if they took over the responsibility from politicians. Cooperation in the wireless telecommunications sector appears to support that testimony.
When Palestine Telecommunications Co. P.L.C., or Paltel, launches its cellular service, scheduled for early next year, it very likely will have a roaming agreement with Israel’s newest cellular operator, Partner Communications Co. Ltd., both companies say.
With Partner’s October launch of Israel’s first GSM (Global System for Mobile communications) network behind it, Paltel is the next GSM peg in the Middle East, where the protocol dominates. In the first phases of its rollout, Paltel expects to have 70,000 cellular subscribers lined up and another 50,000 on board not long afterward, said Hatem Halawani, Paltel’s chairman.
Paltel represents the Arab world’s first telecommunications privatization effort, according to Halawani. The telco’s first shareholders’ meeting visually highlighted the promises of a peace dividend by comprising institutional investors in Western suits and villagers in peasant attire. The investors have helped spur a four-fold increase in Paltel’s shares, making the telco a market favorite on the Palestinian Stock Exchange. Based on its rapid wireline subscriber growth, Paltel posted a US$14.2 million profit on sales of US$38.6 million last year.
Demand for Paltel’s cellular service among a population of 2.6 million Palestinians will be even higher than its shares, Halawani predicts. “There’s no clear statistics for demand, but if we compare the penetration rate of Israel, we think that 120,000 subscribers will be a very humble figure,” said Halawani.
Israel’s 2 million cell-phone users have pushed penetration above 30 percent, one of the world’s highest rates.
But Palestinian consumers are not likely to see the kind of unusual rock-bottom promotions that escalated Israel’s penetration when Cellcom Israel Ltd., Israel’s second of three carriers, offered dirt-cheap rates. “We can’t say that [Paltel will offer that] because we have the cost of investment,” Halawani said.
Paltel was launched last year with a US$50 million investment, 22 percent of which came from the telco’s parent, Padico, which was created shortly after the 1993 Oslo peace accords between the Palestinian Authority (PA) and Israel. In its first three years, Paltel likely will invest US$300 million, Halawani said. Ericsson Israel Ltd. is reaping US$40 million of that to build and operate Paltel’s network.
On the upside for Paltel, the PA has granted the company five-year exclusivity in the cellular marketplace. Paltel isn’t letting anyone forget that and took out ads in the Palestinian press several months ago declaring its monopoly status. The ads clearly were aimed at Israel’s two non-GSM companies, Cellcom and Pele-Phone Communications Ltd., which operate in the West Bank and Gaza. Halawani estimates the two companies combined have as many as 50,000 subscribersin the West Bank and Gaza.
At least for now, Pele-Phone considers Paltel competition, said Gil Bul, Pele-Phone’s marketing director. “Because we have a considerable number of subscribers in the PA areas, we must continue to give them the service they expect from us,” Bul said.
Borders on the area’s wireless map appear much clearer for Partner and Paltel, both of whose networks are being built by Ericsson. Under contracts with Ericsson, Partner is responsible for coverage in Israel up to its 1967 borders and at military installations, settlements and arteries of the West Bank and Gaza; Paltel is responsible for coverage elsewhere in the territories, said Bo Andersson, Ericsson Israel’s president.
The wireless maps are likely to change with the potentially mercurial political map. Israel could abandon more military bases in the West Bank. And the PA does not have jurisdiction over all of Paltel’s coverage area, which extends to the “green line,” the border between Israel and the West Bank before the 1967 Arab-Israeli war.
“We recognize that the status of territory is subject to change,” said Bob Palitz, Partner’s vice president of carrier and international relations. “We undertook those obligations in the settlements and military installations with the understanding that the future is not fixed.”
In contrast to the ease with which one company could transfer its cell sites to the other, Andersson said, deploying simultaneous GSM networks for two distinct cultures had its own challenges, though they were not insurmountable. In Israel, for example, defense regulations prohibited Ericsson from erecting towers and antennas for coverage in some areas. Still, it was easier for Ericsson to find available rooftops in Israel than in the West Bank and Gaza.
“In Israel, we built a lot of rooftop sites where we put antennas and built a room for equipment,” Andersson explained. “On the other side of the green line, it’s almost impossible to do that. If the Arabic people get another child, they build a new addition on top of the others. They don’t want to block their roofs for the future.”