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My Thoughts on the Proposed Retail Tariff Controls in Kenya

February 28, 2018 1 comment

telecoms-13The Communication Authority of Kenya is mulling on introducing retail tariff controls in the Kenyan mobile telephony sector. As you would imagine, this has elicited mixed reactions depending on who you ask. This move it is said is part of a raft of recommendations by the recently released report that studied the Kenyan telecommunication competitive landscape. The introduction, according to the regulator is aimed at correcting market failures that are as a result of one operator being dominant over the rest. The proposed retail price controls aim at limiting Safaricom’s freehand in determination of loyalty schemes and promotions, prohibition of on-net discounts, mobile money fees charged to unregistered and cross-platform money transfers. Tariff  control is a regulatory mechanism that can be employed to correct market failures in a market. The main motivation for price control is to protect consumers’ rights and interests in circumstances where market forces alone have been unable to do so.

The competitive landscape report implies that Safaricom’s price differentiation between on-net and off-net calls leads to tariff-mediated network effects. By this I mean that subscribers on a network find it cheaper to call others who are on the same network than calling people on a different network, the effect of this the emergence of the ‘club’ effect where subscribers decide which network to join based on which network the people they call mostly are on. If most of my family and friends subscribe to a network X, I am more likely to subscribe to network X because by being on network X and not on network Y, my overall calling costs will be lower due to cheaper on-net pricing. This it is argued is abuse of its dominance. But this is only true if the interconnection rates are high between Y and X meaning it will cost me more if I chose network Y where none of my relatives and friends subscribe to. As we speak, interconnection rates are already regulated by CA. This fact alone means that the regulator found and enforced an interconnection rate that was cost based and reflected the market realities. The Safaricom on-net call rates are above the regulator-set interconnection rates  and are similar to the rates its competition provides its customers to call into the Safaricom network, in short, Safaricom’s subscribers pay the same rate as competitors subscribers when both call another Safaricom subscriber. CA would be justified in imposing tariff controls if indeed Safaricom’s subscribers paid less to call their counterpart than when competition subscriber calls. The fact that the report found that each operator was dominant on its own network also means that the club effect can easily be replicated by competition through aggressive marketing and innovation.

Individually tailored tariffs

Another proposal by the regulator is the prohibition of individually tailored loyalty schemes and promotions. The CA 2010 Tariff regulations specify that all promotions or loyalty schemes must be approved by the regulator prior to commencement. Any promotion, offer or scheme currently in operation has the direct approval of the regulator, the details of each promotion or loyalty scheme structure were available to CA before approval and these include individually tailored schemes and promotions. When an operators behaviour due to regulation causes it to become successful, it cannot be punished for successes it encountered while operating within the laid down regulatory framework. If there is any discriminatory behaviour, then CA failed in detecting and stopping this even with the existence of regulations. When that happens, it is clear that regulation is not the solution to the perceived market failures and the only remedy is let competitive forces determine customer choice.

What would happen if call tariffs are regulated?

Most people assume tariff regulation leads to the lowering of retail rates. This would only be true if CA had a way of accurately measuring the costs involved to provide service to additional customers on their network. At the moment, due to the fact that Safaricom has invested more in network infrastructures geographical and population reach, it costs them less to bring in a new customer and provide service to them than its competitors. The proposal to use Long Run Incremental Costs (LRIC) method would mean that because of the massive economies of scale enjoyed by Safaricom owning a large network and technology convergence, the cost of offering an extra minute of termination on the network is virtually zero in the short-term and LRIC is applied to give a realistic cost over the long term. How long is ‘long term’ will determine the price point.
A regulated tariff price should imitate the prices that would have arisen in a market with effective competition, both because this provides incentives to produce the requested service at the lowest possible cost and because the operators requesting the service have the incentive to optimize their own investment decisions. In this way price controls can contribute to efficient utilization of social resources. The problem however is that LRIC works very well in legacy circuit switched networks where it was easy to link network utilization with the provision of a service (if a switched circuit is in use, it is providing a directly attributable service), in a converged environment, the relationship between network resource utilization and provision of services is not that straightforward and an LRIC model applied to it would fail to efficiently allocate costs. As networks evolve into Next Generation Networks (NGNs), LRIC approach to service cost allocation becomes inefficient and LRIC starts to resemble the Full Allocated Costing (FAC) model. The result? higher prices to the consumer.

Replicable retail tariffs

One of the recommendations by the study is that Safaricom’s Tariff must pass the ‘replicability test’.  In order for a product or service to be considered replicable, it must be commercially and technically capable of being replicated by Safaricom’s competitors. By this we mean that any new tariffs that Safaricom comes up with should take into consideration the capability or state of competitors infrastructure and services especially at the wholesale level. If for example, Safaricom comes up with a tariff that takes advantage of a new innovation they developed, then competition should have similar innovations on their networks or should be allowed by Safaricom to access this new innovation at wholesales prices to enable them offer similar tariffs. In order for competitors to be able to compete with Safaricom in retail markets, it is necessary for them to have access, either via their own networks or through access to Safaricom’s network, to the wholesale components that enable those retail prices to be offered. This as you can imagine will slow down the pace of innovation by Safaricom or change the main focus of innovation from the customer to competition, anytime Safaricom wants to innovate, they will think of ways through which competition will not benefit much from it as opposed to spending their time and knowledge on how the innovation will first benefit the customer.

Tower sharing

The report found that Safaricom is dominant in the tower market owning about 65% of telecommunication towers in Kenya and recommends that it shares it towers with competition. To do this effectively, Safaricom has to let a 3rd party manage the towers on its behalf. Safaricom owns its towers while competition has a mix of owned and outsourced/leased towers. With rapid advancement in technology, there is a saying in the industry that it is always cheaper to build a network tomorrow. Any new entrant or existing operator rolling out new retail services and infrastructure such as towers will do it cheaper today than those who did it in the past. See how easy it was for Finserve Africa (Equitel) to get market reach by the flick of a switch riding on an MVNO license? Older operators didn’t get to enjoy these benefits and had to put in sweat and blood to get where they are.
In the Safaricom 2017 sustainability report, the operator spent close to 10 million litres of fuel and about KES 48,000 per month per tower location on energy costs. The report also shows that fuel and power costs are coming down and that Safaricom has also embraced green energy initiatives to power the active components at the tower stations, it is becoming cheaper by the day to setup and manage tower locations but the increase in the number of towers makes the management of the same a challenge.  Outsourcing of tower management is used by some operators to shift a large element of their fixed costs to the variable costs column of their financial books, in doing so the operators financial health improves. Tower outsourcing has little to do with improved efficiency in actual operations and management of these towers but more to do with improving the books. Due to this, the global trend in the telecom sector is the outsourcing of tower management to independent 3rd parties, something Safaricom should consider for its own benefit and not due to regulatory requirement. Safaricom should then decide to lease its towers to competition on a purely commercial basis.

Conclusion

Although well meaning, the CA needs to explore non-tariff based remedies to the perceived dominance of Safaricom. Tariff control is a very intrusive approach to handling abuse of dominance whether real or perceived. As markets evolve to become competitive, ex ante regulation should reduce as the regulator forebears regulation in favour of competitive forces. The challenge however is that customer inertia can mask the existence of competition in the market leading to the regulator applying regulatory tools to correct this perceived market failure. Market forces should be let to dictate the market tariffs.
The tariff control ocean floor is littered with shipwrecks of tariff control attempts by various countries that  tried to correct market failures by  employing it. One of these countries is Mexico who in 2012 introduced tariff controls by baring America Movil from charging interconnection fees to its competitors. Movil controls 70% of Mexico mobile market. As of 2015, mobile call charges had dropped by about 17% but investment in the sector dropped 30% during the same period, for a developing country like Kenya, a drop in ICT investments will have far reaching effects across multiple sectors of the economy. Whereas the intended outcome of tariff control is to  protect the consumer from a dominant operators actions, the question that remains is whether tariff control is the only viable market correction tool available.

 

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Is Universal Access/Service a Government or Operator Obligation?

March 30, 2016 4 comments

ruralSecond to creating a level playing field for all ICT operators, one of the widely accepted objectives of regulation of the ICT sector in developing countries is to promote universal access of basic ICT services. In developed economies, the objective changes from universal access to universal service. The difference is that access promotes the notion that every person should have reasonable means of accessing basic ICT services (like a phone booth at the local shopping center) while universal service is about promoting and maintaining availability of a variety of ICT services to individuals and households. Both these terms are combined into what is known as universality.

It is clear that that universal access definition has been overtaken by events based on the recent developments especially in the wake of mobile communication boom in many developing countries. To a very large extent, its no longer about ensuring access but ensuring that a variety of services are delivered to the end user.

The need by governments to make universality a reality stems from increasing evidence that access to ICTs improves the overall socioeconomic well being of its citizens. However, with the wave of privatization of ICT services such as telecommunications, the operation of telecoms moved from social welfare minded government ministries to profit minded private entities. When privatization took place in the early 1990’s new entrants focused on providing services to profitable market segments based on geography, disposable income and population density (which improves economies of scale and scope). The result is that regions or populations that were not profitable were at the risk of being left our in the ICT revolution. To prevent this from happening, regulators were quick to include mandatory service obligations (MSOs) in the licenses issued to new entrants. These obligations mandated the operators to extend their networks (and in effect their services) to areas where the cost of providing the services and maintaining the networks was higher than the revenues realized from the same areas. This seemed to be the only practical solution to connect the ‘unprofitables’. Other solutions were available and open to use by the operators such as cross-product subsidies (which haven’t worked well due to the fact that on the other hand the regulator enforces cost-based pricing making cross-product subsidies difficult to implement). It is worth noting that the definition of Universal Service varies from country to country, in Finland for example, universal access includes the right for every individual to access 1Mbps of broadband internet in addition to other services.

In addition to the measures above, the regulator in Kenya also developed a Universal Service Fund (USF) framework which according to them on page 1 of the framework draft document was to “to complement private sector initiatives towards meeting universal access objectives”. The document title and the aim I have quoted above are conflicting to a keen eye.

If indeed the aim of the USF was to complement private sector, why is the same private sector being obligated by regulatory instruments to fund it?

The International Telecommunications Union (ITU) lists many way in which USF can be funded,  one of the more popular ways is by budgetary allocation from the government. Other ways are by use of Access Deficit Charges (ADCs) and the levying of  a percentage of monies collected by operators in their business operations towards the USF kitty. The ITU states that should a regulator go the revenue levy way, it must not place a unfair burden on the operator on how these levies can be collected. For example the regulator cannot say that it will levy a percentage for every call minute  or every MB of data used by subscribers, this would make accounting difficult and hence the approach of levying the total revenues of the operators which is easier and more transparent.

Several countries have implemented USFs that are beneficiaries of government budgetary allocations. Such countries include Chile and Peru. Incidentally the same countries are hailed as success stories of how universality has improved lives of its citizens. This is because the desire to offer universal service or access is a social obligation of the government and not private firms. Its in the governments interest to connect these otherwise unprofitable regions/people and it can easily do it from budget.

Chile’s approach has been an interesting case study of how, if done right, the USFs can work to meet government objectives. The regulator there took the concession path by having operators bid to provide services on a concession basis. The regulator would then pick the lowest bidder. The results were that most of the bids were 50% below the budgetary allocations meaning that the approach was financially efficient. Proper policies were put in place to define the penalties, rights and obligations of each winning concessionaire to ensure they delivered.

This is the approach the Kenyan regulator should take. Instead of levying operators a percentage of their hard earned revenues. The operators, through the ITU definition can claim that the regulator has placed an unfair burden on them from the perspective of them not being directly responsible for economic development of the citizens (whether through ICTs or other means). Universality is a social program and it therefore squarely falls on government arms. Profitability or lack thereof  from universality is a secondary consequence whose impact cannot be directly measured.

Proponents of operator-funded USFs argue that unseen benefits such as multiplier effect of connecting the unprofitable directly benefit the operators, if that is the case then this decision to connect these people should be a commercial decision by the operators and not a license requirement. An example of the multiplier effect is when for example I (being of better economic means and living in the city) can now use airtime (read revenues) to call my rural relatives who are now connected thanks to supposedly the implementation of universality. My act of calling them in addition to other people I normally call adds revenues to operators. The operator should therefore connect my rural relatives because I will call them and not because they will call me. This is a straightforward  commercial decision.

Obliging ICT operators to fund the USF is unfair because social economic benefits accrued from connecting the population are felt across several fronts such as improved health, education and increased commercial activities and not just by way of improved profits by operators if any. Universality’s key outcome is not purely an ICT one and making only ICT players fund it is tantamount to the unfair burden on the operators mentioned by ITU.

It is my opinion therefore that the current approach to universal service funding should be re-looked at and if possible a new method of funding it through direct government budget allocation be adopted.  This is already happening in providing roads, hospitals and schools.   The regulator needs to revisit this because of the following reasons:

  • The current market structure where one operator is making most of the revenues is unfair to this operator as they will be contributing the most to this fund. There are no clear guidelines on how these funds will be utilized leaving room for abuse.
  • Failure for the law to accommodate ICT industry players in the Universal Service Advisory Council meaning they have no say on monies they contributed. This technically makes it a tax.
  • Already, operators are extending their networks to seemingly unprofitable regions without the need for government to push them. Advancement in technology and convergence is making what universality defines as unprofitable now seemingly commercially viable because its now much cheaper to build and scale networks. USF objectives need to be reviewed or done away with altogether

Should the regulator be adamant about maintaining the USF due to various unreasonable and political ends, then operators have recourse at the international courts as Kenya is a signatory to the WTO  General Agreement on Trade in Services (GATS) especially the agreement on basic telecommunications

What Whatsapp voice means for MNO’s

April 1, 2015 8 comments

Facebook inc recently introduced the ability to make voice calls directly on its Whatsapp mobile application. This is currently available on Android OS and soon to be made available on iOS.

What this means is that mobile users with the updated app can now call each other by using available data channels such as Wi-Fi or mobile data. Going by a recent tweet by a user who tried to use the service on Safaricom, the user claims that they made a 7 minute call and consumed just about 5MB’s of data. If these claims are true, then it means that by using Whatsapp, a user can call anyone in the world for less than a shilling a minute. This is lower than most mobile tariffs.

Is this a game changer?

Depends on who you ask. First lets look at what happens when you make a Whatsapp call. When a user initiates a call to another user over Whatsapp, both of them incur data charges, in the case of the twitter user I referred to above who consumed 5MBs, the recipient of the call also consumed a similar amount of data for receiving the call. If it so happens that both callers were on Safaricom, then just about 10MB’s were consumed for the 7 minutes call. The cost of 10MBs is close to what it would cost to make a GSM phone call for the same duration of time anyway. Effectively, to now receive a Whatsapp call, it is going to cost the recipient of the call. This is unlike on GSM where receiving calls is free.  When the phone rings with an incoming Whatsapp call, the first thought that crosses a call recipients mind is if he/she has enough data ‘bundles’ on their phone to pick the call. The danger is if there is none or the data bundle runs out mid-call, the recipient will be billed at out of bundle rate of 4 shillings an MB. Assuming our reference user above called someone whose data had run out, Safaricom will have made 5 Shillings from the 5MBs and 28 shillings from the recipient. A total of 33 shillings for a 7 minute call translating to 4.7 shillings a minute which is more than the GSM tariffs.

This effectively changes the cost model of making calls. the cost is now borne by both parties, something that might not go down well with most users. I have not made a Whatsapp call as my phone is a feature phone but I believe if a “disable calls” option does not exist, Whatsapp will soon introduce it due to pressure from users who do not wish to be called via Whatsapp due to the potential costs of receiving a call. That will kill all the buzz.

Will operators block Whatsapp calls?

It is technically possible to block Whatsapp texts and file transfers using layer 7+ deep packet inspection systems such as those from Allot’s NetEnforcer and Blue coat’s Packeteer. I believe an update to detect Whatsapp voice is in the offing soon and this will give operators the ability to block Whatsapp voice. The question however is what will drive them to block it?  MNO’s will have no problem allowing Whatsapp traffic as it wsill mot likely be a boon for them if most of the calls are on-net (They get to bill both parties in the call). If however most calls are off-net (Like those to recipients on other mobile networks locally or international), then MNO’s might block or give lower QoS priority to make the calls of a poor quality to sustain a conversation. They might however run into problems with the regulator should subscribers raise concerns that they think the operators are unfairly discriminating Whatsapp voice traffic. Net neutrality rules (not sure they are enforceable in Kenya yet) require that all data bits on the internet be treated equally, it should not matter if that bit is carrying Whatsapp voice, bible quotes or adult content. This will mean that operators can be punished for throttling Whatsapp voice traffic in favour of their own voice traffic. This therefore presents a catch 22 situation for them. What they need to do is come up with innovative ways to benefit from this development like offering slightly cheaper data tariffs for on-net Whatsapp voice to spur increased Whatsapp usage within the network (and therefore bill both participants).

Worth noting is that it costs the operator more to transfer a bit on 3G than it does on 4G. Operators who roll out 4G stand to benefit from Whatsapp voice as they can offer data at a lower cost to them and this benefit can be passed down to subscribers. The fact that voLTE is all the rage now, Whatsapp voice can supplement voLTE and can even be a cheaper way for operators to offer their voice services on their LTE networks without further investment in voLTE specific network equipment.

In short any operator who wants to benefit from Whatsapp voice has to go LTE.

Why the push to digital TV?

November 12, 2012 5 comments

There has been a lot of attention in the local media on the push by the government to have Kenya migrate its TV signals from analog to digital.  The governments push has left many wondering what its stake in all this is.

In 2006 Kenya participated in the The Regional Radiocommunications Conference-2006 (RRC-06) which was hosted by the International Telecommunications Union (ITU). In this conference, it was agreed that all nations need to migrate to digital TV by 2015. Kenya set an ambitious cut-over date of 2012 as the date by which all TV broadcast in Kenya will have been migrated to digital. The Communications Commission of Kenya (CCK) has formed a digital migration secretariat to co-ordinate this migration. This secretariat is the one stop center for all matters related to this migration.

Many a bystander will ask, other than the government ratifying the RCC-06 agreement, what is the government’s stake in asking its citizens and broadcasters to change the way in which they receive their TV signals. With majority of TV services being run by private entities, shouldn’t the decision to change from analog to digital be done by these entities in the same manner in which a mobile operator decides to roll out 3G or 4G based on a business case and not by regulatory conditionality?

CCK recently expressed fears that over 40% of TV sets in Kenya are black and white and this could signal a stumbling block because owners of black and white TV sets tend to be those who are economically disadvantaged and cannot easily afford a digital set-top box.  With the deadline to switch over fast approaching, TV stations stand to lose 40% of their viewers if these viewers do not manage to upgrade to digital TV. This is a big threat to their market base and I would have expected a flurry of activity from TV operators seeking the indulgence of the government to subsidize the set-top boxes to consumers or better offer them for free as was the case in USA when they did their migration  in 2009.  If the American TV viewer who is by all means better off than the Kenyan counterpart got help from the government, one wonders what will happen to the Kenya viewer if he is not helped by the government to acquire a set-top box. The high cost of set-top boxes and poor planning of the migration project has made the government postpone the migration deadline to 2013 from the earlier mid 2012 deadline.

However, far from that, the main reason why the government (and many other governments) stand to benefit from this migration is revenues. The government is the biggest beneficiary in the digital TV migration because it will draw revenues from:

  1. The license fees from signal distribution companies: In Digital TV, all TV stations are to give their signal to a central signal distributor who will then transmit this signal on their behalf. The signal distributor pays a license fee to the government which is an additional revenue source. There is also the revenue that was to be gained from tax on the set-top boxes, there has been a push to zero-rate the boxes so as to make then more affordable to users. Even with zero rating, the importation process is poised to benefit the economy in one way or the other.
  2. With the migration of analog TV signals away from the 800Mhz band, the band will be available for auction to telecommunication operators for use in operating 4G-LTE networks.

4G-LTE networks and your TV

The 4G-LTE network can use either the 800Mhz or the 1900Mhz band for transmission, the 1800Mhz band is not preferred because it is less efficient to use than the 800Mhz band. The fact that 1800Mhz is higher frequency means that physical barriers such as building walls might impede its transmission and make it less effective for high-speed data transmission. Transmitters and detectors of higher frequency communication (4G phones in this case) tend to cost more compared to lower frequency transmitters and detectors.

The most desirable characteristic of lower frequencies is that they can travel longer distances without losing their ability to carry information. This means that a 4G-LTE network at 800Mhz will require fewer base stations than the same network at 1800Mhz. This therefore makes building and operating a 800Mhz network cheaper than one on 1900Mhz range.

The use of the 800Mhz band in analog TV transmission therefore means that mobile operators are only left with 1800Mhz  to roll out 4G-LTE. Much of the pressure to migrate TV from analog to digital is therefore informed by the fact that the government can auction the 800Mhz band to mobile operators for millions of shillings and empower them to roll our cheaper-to-run 4G-LTE networks. The by-product of this migration to TV viewers is that they get a clearer TV signal with many value additions on the digital signal such as the ability to  get descriptions of programs on TV, auto schedule TV programs of their interest, and also pay-per-view services.

How 3G Traffic To Wi-Fi Offloading Can Help Operators

August 14, 2012 8 comments

A recent research article by Khynghan et. al, in a paper titled “Mobile Data Offloading: How Much Can WiFi Deliver?” estimates that about 65% of mobile data can be offloaded onto Wi-Fi networks. By this they mean that much of the data generated by users browsing the Internet via mobile devices can be rerouted from the mobile 3G network onto Wi-Fi networks.

With the explosive growth of data consumption by mobile devices in Kenya, network operators have several strategies aimed at meeting the unprecedented growth. These strategies include 3G and 4G network expansion to carter for this growth, adoption of new technologies such as 4G-LTE and use of new network architectures that maximize network resources. Unfortunately, with declining or flat revenues and margins from unit data consumption, nearly all these strategies are expensive and eating into the already declining margins.

Wi-Fi Offloading

Wi-Fi offloading is becoming an attractive alternative path for operators to cope with the increased traffic from Smart devices. In the US, smart devices account for only 3% of all mobile devices but contribute about 40% of all mobile data traffic. With majority of these devices having  Wi-Fi capability, offloading their traffic onto Wi-Fi network from 3G presents a very viable alternative.

Wi-Fi offers the following advantages that makes it a very likely alternative to the more expensive roll-out of 3G and 4G especially in densely populated areas:

  1. It is much cheaper to roll-out Wi-Fi hotspots around a city compared to a 3G or 4G network
  2. Wi-Fi networks are very scalable, it can take months to expand a 3G network but few days to expand a Wi-Fi network
  3. A Wi-Fi network, if well designed can offer much higher throughput speeds than existing mobile networks
  4. A smart device connected to a Wi-Fi network is more efficient on battery conservation than one connected to a mobile network.

Are users really Mobile ?

There is a general misconception that mobile devices are used by users in motion, a lot of attention has therefore been paid to ‘seamless’ station to station hand-off of a mobile voice and data connection. In a paper by University of Malaga, University of Limerick and Nokia Siemens Networks the authors show that less than 3% of calls in the world are actually handed off from one base station to another. This shows that majority of “mobile” users are stationary when making calls or browsing the web. This percentage is bound to be lower in a country like Kenya meaning that deployment of Wi-Fi networks that lack hand off capabilities possessed by 3G networks will not impact user experience and operators will not compromise quality of service.

Mobile operators can spur the usage of Wi-Fi networks by first educating users on the fact that majority of mobile devices give higher priority to a Wi-Fi network than a 3G network, i.e. if your phone is connected to both Wi-Fi and 3G, it will by default send data over the Wi-Fi network and revert to 3G when there is no Wi-Fi coverage. The operators can also send over the air (OTA) Wi-Fi configurations and settings to enable mobile devices automatically connect to the providers Wi-Fi network when it detects a good signal. The operators can also spur usage of Wi-Fi by mobile users by offering better data tariffs for users on Wi-Fi than those on 3G/4G.

Statistics from the research by  Khynghan et. al. show that 3G to Wi-Fi traffic offloading tests done in New York City showed that over 65% of 3G mobile data was offloaded onto Wi-Fi networks by smart devices leading to faster browsing speeds and a 55% battery saving as devices no longer need  signaling power. (be it legacy ss7 or SIGTRAN).

In these days of shrinking revenues and skyrocketing costs,  Kenyan mobile operators should give Wi-Fi a thought if they are to meet their customers expectation of quality service and give their shareholders return on their investments.

 

 

 

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How the Green Mobile Revolution Can Help Rural Africa

October 10, 2011 Leave a comment

The mobile communications revolution sweeping across Africa has come with its own problems. The major one of these problems is the negative environmental impact it’s had due to the use of non environmentally friendly power sources to power this revolution. The carbon foot print of a typical caller in Africa is much wider than a similar caller in more developed regions of the world.

However, all is not gloom as this environmental impact this revolution is having can be turned around to benefit rural Africa as per my recent article published in the Developing Telecoms journal. Read the article by clicking here

Carrier ID is a welcome idea to combat Satellite Interference

September 11, 2011 Leave a comment

Currently there are over 2400 satellites in orbit around the earth providing services from telecommunications, global positioning systems (GPS), disaster management and prediction, weather and military use. Majority of the satellites are privately owned and operated by various operators around the world. Some of the major operators are SES, Intelsat, Eutelsat and Telesat Canada.

Satellites have been in the forefront of delivery of telecommunications and related services around the world and is the only means of communications that has the capacity to reach the entire earth’s surface. There is currently no spot on the earth’s surface that does not have line of sight to a communications satellite.

The Satellite communication industry is set to grow in the coming years especially in the provision of DTH TV services (such as DStv), cellular back-haul and point to multi-point communications. The launch of more powerful and high-capacity Ka-band satellites will also go a long way in lowering satellite communication costs as the Ka-band satellites deliver more capacity for the same investment in launch and construction ( capacity wise, a Ka-band satellite is equal to about 100 Ku-band satellites)

With the growth of the use of satellites in communications, the problem of  Radio Frequency Interference (RFI) is becoming more common in the world today. Majority of this RFI is mostly unintentional due to improper earth station set-up (configuration and dish pointing). Conditions that can cause RFI to occur when an earth station:

  1. Transmits at the right carrier frequency but causes cross polarity bleeding leading to the interference of the opposite pole carrier.
  2. Transmits on the wrong carrier frequency on the correct polarity.
  3. Does a combination of the above two.
  4. Transmit on the correct carrier frequency and polarity but at higher power overpowering other carriers from either the same satellite or adjacent ones.

For the above to be deemed as valid interference, there must be both the affecting the affected carrier. If there is no affected carrier then there is technically no Interference (e.g. if there is no carrier on the opposite polarity for condition 1 above, then there is no interference)

The problem of RFI is compounded by the use of TDMA or FDMA or a combination of both(TDMA/FDMA) or MCPC carriers where several earth station sites use the same frequency range to communicate. In such circumstances it becomes difficult in identifying a remote earth station that could be causing interference. The operator can identify the customer whose remote station is causing interference, but if the customer is transmitting from various remote stations (some times several thousand remotes spread over a large geographical location), the customer might not be in a position to single out the interfering remote station. In such situations, the operator has to shut down each remote sequentially until the interfering remote is identified, this approach is time-consuming (can take weeks or even months for many remote sites) and causes downtime to end users.

To minimize the chances of RFI, satellite operators have come up with checks to ensure that the danger of interference from a new remote earth station installation is minimized, these measures include enabling transmit on the remote only after the operator is satisfied that the installation was done to specified standards. The other option is to carry out cross-pole checks for every site using a pair spectrum analyzers, this is sometimes logistically difficult and expensive.

The Carrier ID approach

There has been a concerted effort recently by Intelsat and other operators in calling for the adoption of the ‘Carrier ID’ approach. This initiative calls for inclusion of a Carrier ID in carriers with MPEG transport streams. This therefore means that equipment manufacturers, satellite operators and customers will work together to ensure that any signal transmitted to the satellite will carry with it the following data:

  1. Customer name
  2. Contact telephone number
  3. Geo coordinates (latitude, longitude) of the transmitter
  4. Modem manufacturer name
  5. Modem serial number

This therefore means that if this system is adopted, it would make it easy to identify the source of interference to the exact location and contact the customer to rectify or shut down the transmission. This makes the elimination of RFI a straight forward process.

There is some opposition in the industry on the implementation of the carrier ID concept because:

  1. Some say that Carrier ID method will do nothing to eliminate interference, it will only alert us of who is causing it, they would rather advocate for proper training and use of certified equipment which is where the problem lies.
  2. Some say it will remove some anonymity of their transmission streams. This carrier ID info cannot be carried in encrypted format and this could open up some security concerns. Some operators use the modem serial number as the encryption key and transmitting it raw would render many encrypted channels vulnerable.
  3. The equipment manufacturers will have to redesign their equipment to be able to  incorporate the carrier ID into the carrier. This they feel is not their burden and that the customer is obligated to ensure proper installation and configuration of remote equipment.
  4. The Carried ID portion will eat into the available user transmission capacity hence lowering the overall transponder capacity efficiency. This will lead to a longer ROI time for contracted capacity.
  5. The Carrier ID method is not fool proof. This is because users have the option of entering the carrier ID data. A user might enter wrong contact details for example and be unreachable to correct the RFI on his system.

I however feel that the initiative fronted by Intelsat is an idea whose time has come and satellite operators, equipment manufacturers, the ITU, IEEE and customers should work together to ensure its success. In addition to carrier ID, I would also propose more intelligent satellite systems that can identify and apply a band-stop filter to the suspected interfering carrier should the owner fail to rectify it within the stipulated time or if the owner is not reachable due to wrong contact information on the carrier ID.

The Carrier ID approach would save a lot of money spent in the identifying and eliminating sources of interference and improve satellite capacity uptime.
This approach should also be adopted by other wireless systems such as Wimax, SDH microwave systems etc.