My Thoughts on Technology and Jamaica: LIME outsources Network Maintenance to Ericsson

Saturday, April 20, 2013

LIME outsources Network Maintenance to Ericsson

Telecom Provider LIME, in a bid to reduce the cost of running its network, has decided to outsource maintenance to Telecom Equipment Supplier Ericsson Jamaica over a seven (7) year period as was announced in The Jamaica Observer article “LIME to lay off 300 as it partners with Ericsson”, published Tuesday, March 26, 2013 6:28 AM, The Jamaica Observer.

The Gleaner gave a bit more details of contract deal with Ericsson, which becomes effective Thursday May 30th 2013, in the article “LIME outsources operations to Ericsson”, published Wednesday March 27, 2013, The Jamaica Gleaner.

Effectively, Ericsson is to handle all aspects of Landline, Internet and Mobile, Mobile TV from Tower to CPE (Customer Premesis Equiptment) at the customer’s home. This deal in not dissimilar in nature to the one struck by CLARO in 2009 for Huawei to control Maintenance of their Cell Sites and JNAP (Jamaica Network Access Point) to do Generator Maintenance.  Just more extensive and with more things to maintain! More interestingly, this means that both Telecom Provider LIME and Digicel have the same Mobile Maintenance Contractor.

The layoffs also involved some 305 persons in a bid to cut Telecom Provider LIME’s operating costs of some J$10 billion annually on its operations, J$4 billion or 40% of which is staff salaries and emoluments. And apparently, by Thursday May 30th 2013, all employees laid off in the restructuring exercise will be re-employed with Ericsson, according to Managing Director of LIME Jamaica, Garfield Sinclair in the article “Displaced LIME workers will be offered jobs at Ericsson – Sinclair”, published 7:24 am, Thu April 4, 2013, RJR News.

Clearly this is more than just an exercise to reduce the cost of maintenance. Telecom Provider LIME is also gearing up for a bid for one of the two (2) 700MHz Spectrum that can be utilized to provide LTE (Long Term Evolution) Wireless Broadband Internet, which coincidentally was also announced on the same day as noted in my blog article entitled “Minister Paulwell in Parliament debut two 700MHz Licenses for 4G LTE for Monday July 15 2013 Auction - 4G LTE Means After Earth Everything is Possible”.

So if the cost of obtaining and exploiting these fifteen (15) year 700MHz Spectrum licenses, which is about US$45 million on average, based on the article “US$40-MILLION broadband licences”, published Wednesday, April 17, 2013 by CAMILO THAME Business co-ordinator, The Jamaica Observer, may increase to on average about US$1 billion per year, why don’t the Telecom Providers create a Shared 4G LTE Network?

Right now, however, this action by Telecom Provider LIME means that they and their competitor Telecom Provider Digicel share the same Telecom Equiptment Provider, Ericsson. Telecom Provider Digicel pushing its cheaper Digicel DL600 aka the rebranded Alcatel One Touch S'Pop smartphone in a bid to boost mobile 4G usage as noted in my blog article entitled “Digicel to launch the DL600 Smartphone by Mid-May 2013 starting below US$100 - Alcatel One Touch running Firefox OS marketed like The Incredible Burt Wonderstone”.

Most likely Telecom Provider LIME and Telecom Provider Digicel will have to share one of the cheaper licenses as recent changes in the Telecoms Act indicate they’ll have to share Tower infrastructure instead of building new Towers. At 700MHz, neither Telecom Provider Digicel or LIME have any need to build new towers, as the frequency guarantees good propagation over greater distances with less power.

However, as it’s two (2) licenses split up from the three (3) block of 700MHz spectrum and the Ministry of Science, Technology, Energy and Mining being very keen on competition to achieve 90% coverage and hopefully the same level of Internet access in five (5) years time, a Shared 4G LTE Network is no longer a possibility, it’s an inevitability. Especially as the CAPEX (Capital Expenditure) for build-out and the eventual pricing of the 100MBps 4G LTE Tiered Services (for lower speeds) will be high, oweing to the need to have all towers interconnected via Fiber Optic Backhaul.

After all, if Telecom Provider LIME and Triple Play Provider FLOW funded by the GOJ (Government of Jamaica) UAFCL (Universal Access Fund Company Limited) can team up to build a 100MBps Fiber Optic Network as detailed in my blog article entitled “LIME, FLOW and the $JA543-million Internet plan - Ebony and Ivory”, why can’t Telecom Provider LIME and Digicel team up for a joint bid for the 700MHz Spectrum License to provide 4G LTE Broadband Internet?

The other Spectrum license of the pair is most likely being reserved for a still unknown Third Telecom Provider. Which leads to another possible scenario: both Telecom Provider LIME and Telecom Provider Digicel may find their own dancing partners aside from each other. This may be one of the local Telecom Providers such as Triple Play Provider FLOW (excellent choice as they have expertise in Fiber Optic Cable laying) or Dekal Wireless, who have a great deal of expertise in running a Municipal Wi-Fi Network, which may consider to be a possible Last Mile solution.

Or it may be with a FDI (Foreign Direct Investor), such as Telecom Provider T-Mobile, Vodafone or even Verizon from the US of A. One thing I’ve learned is that in the Telecoms world, Everything is Possible.

An example of this kind of teaming-up can be seen from the Tag team of Denis O’Brien owned Digicel Group with Digicel Billionaire investor George Soro's Quantum Strategic Partners Limited and Billionaire investor Serge Pun’s YSH Finance Limited, a member of the Yoma Strategic Holdings Group to bid for the Myanmar Telecom License as reported in “Digicel partners with Soros, Pun on Myanmar telecoms bid”, published Sunday April 7, 2013, The Jamaica Gleaner. So you see, this is VERY possible here in Jamaica.

And BOTH Telecom Provider have begun pushing Tablets to kiddies in recent PR (Public Relations) donations of Tablets as noted in “Praise Tab using tablets to learn”, published Monday April 8, 2013, The Jamaica Gleaner and “Seven Primary Schools in East Kingston Get Tablet Computers”, published Tuesday, 09 April 2013 11:37, Written by JIS, The Jamaica Information Service. Details on this in another article!

All these consolidations and the recent PR push indicates, rather vaguely but inevitably, that The Lone Rangers (2013) in the Telecoms Field may have no choice but to possibly teaming up with each other or with other FDI’s for a rapid LTE infrastructure upgrade over the next five (5) years.

No comments: