So British telecoms engineer Muhammad Iltaf saw a huge opportunity when he was approached by a group of investors, mainly from the banking industry, interested in starting a new mobile network in Pakistan.
Not much more than 18 months after that first approach Iltaf is CTO of Warid Telecom, which is delivering high-quality GSM service to 2.3 million customers. He was working in the UK for Orange at the time of the approach, focussing on performance management systems for GPRS and 3G.
"I thought this was a lifetime chance," he says. "I'd a lot of ideas about what to do building different networks and here was a chance to try them out."
As well as Orange, Iltaf has worked for BT — at BT Labs as well as for some of its former international mobile interests — and for Ericsson and Vodafone in the Middle East.
"We had a challenge to start off with," says Iltaf. "The group of people who were investing in Pakistan in the GSM licence didn't have any network experience. Their background is banking. They recognised that Pakistan was a potentially very lucrative market and they set about hiring a number of people from established telcos to help them understand how to set up the network."
Iltaf was recruited by Marwan Zawaydeh — who is an advisor to the group and board director of Warid Telecom and was formerly CTO of Etisalat before coming to Pakistan. "He together with some ex-colleagues of Etisalat came to form the initial team. They contacted me. At the very least it was an opportunity to build something from scratch and I accepted the offer."
Core network decision
First step was to make a decision about the core network. "I was the person responsible for this and I put together a strategy for what I would like the core network engineering department to look like. We agreed on the skill set we wanted. Somewhere along there we started identifying key personnel and I called up a few people."
Some accepted the offer, some turned him down, and some say no but then changed their minds. "In two and a half months we had the people responsible for engineering, the core network, the OSS, operations and so on. This was in September-October 2004 — 18 months ago."
It's clear that Warid has powerful investors. The company, which won its license in open auction for $291 million, is owned by Abu Dhabi Consortium, which is led by Sheikh Nahayan Mabarak Al Nahayan, a member of the royal family of Abu Dhabi. The group, one of the largest in the Middle East, has interests ranging from oil and gas exploration and hotels to banking and property development.
It already had a large presence in Pakistan: it owns Bank Alfalah, one of the country's main consumer banks, and has a substantial stake in United Bank, one of the largest financial institutions in the country.
With that sort of support Iltaf and his colleagues were able to approach the main vendors for their proposals for their new network — companies including Ericsson, Motorola, Nokia and Huawei, he says.
No network migration
"Because it was a greenfield network and we didn't have any legacy network to integrate with, the choices were fairly simple. Most existing networks have a large installed base of legacy technology — with three or four generations of products working with each other. With us, network migration wasn't a problem."
That gave the team at Warid a much freer hand. "We made the choices — we wanted the latest emerging technology that was globally available, and the vendors came back with very good proposals."
There was some caution about going for the absolutely newest suggestions. "Some suppliers came back with a softswitch solution for the core network," says Iltaf. "We chose not to go with the mobile softswitch at that time because 18 months ago it was still an emerging technology and it wasn't totally compliant with standards. We partnered with Ericsson as our main supplier and they provided a turnkey solution based upon the latest AXE switching and radio technology."
That's changed after 18 months, he says. "Now are looking at this architecture for the core network because it provides a more cost efficient solution. Other networks around the globe are also now going to the mobile softswitch. We are in the process of evaluating this technology."
Warid was also able to take a novel approach to providing SMS services to its new customers. Iltaf decided not to use a conventional architecture, based on short message service centres, but to use an intelligent routing system from UK-based voice and SMS routing specialist Telsis.
New texting technology
"Because we were building a new network, we had the choice of deploying state of the art technology or going a whole generation back. We chose to go forward," says Iltaf. Using the Telsis approach means Warid can provide high-volume SMS capacity and introduce advanced services.
"We had seen the limitations of the old store-and-forward messaging architecture built around SMSCs," he says. Most messages can be delivered straight away, so "it makes no sense to have a system which assumes a delay is inevitable", he adds. "A modern network also needs a messaging architecture with real intelligence to support new network and third-party services."
The Telsis approach Warid chose "is a router-based architecture and very, very easy to scale up", he says. "Load sharing capabilities are excellent, management is excellent and we're finding that as SMS is growing in the Pakistani networks our competitors are finding it hard to scale up." Ericsson supplied the Telsis equipment to Warid, he adds.
Ericsson also won a substantial part of the radio network business, he notes, along with Huawei.
"One of the gaps in the Pakistani market has been an environment based on good quality of service." People were content if they could make phone calls, and operators needed only to provide what he calls "a bare minimum service".
But, starting with a new network from the beginning, "we wanted to reduce the interference and increase the quality of service and quality of the conversation for the customer".
The network uses intelligent features such as adaptive multi-rate and frequency hopping — Warid operates dual band services — to make the best use of the capacity.
"We're aiming at better quality at a lower bit rate and at reducing the impact of interference. This has been tried successfully in the metropolitan and rural areas of the UK and other parts of Europe. Here we're using them. I've got guys who were working for O2, Orange and other companies, and people who have worked for Ericsson."
In its initial roll-out Lahore-based Wahid is aiming at Pakistan's 28 biggest cities, "where there are potential customers looking for the best quality of service at competitive rates", he says. "Our biggest challenge now is to keep up with the capacity demand in these 28 cities."
The network is expanding to other cities and the main highways between, but the company is maintaining a cautious approach to its expansion. "We're only claiming coverage where we have a business centre and distribution outlets, and service centres."
But eight months after launch Warid has "2.3 million active customers", he says. About 88% of them are pre-pay, "but one of the main features of our network is that because of our presence within the banking fraternity we also have the second highest post-paid base in Pakistan, which is something for us to be proud of because the post-pay market is competitive. We've managed to win users who are major users of the telephone."
Warid is interconnecting with other fixed and mobile networks in Pakistan and internationally. "By and large in Pakistan the national networks have no problem interconnecting with SMS and two networks are interconnected with us for MMS as well. MMS is of increasing importance. Over the next few months we'll be interconnected to all of them in Pakistan."
For international services Warid uses Mobile365 for SMS delivery and BT and Etisalat for call delivery. "From a roaming point of view in eight months or so we have connected with 92 networks in 77 countries," and the total should reach 100 countries shortly, he adds.
Services started in May 2005 and by early August there were one million customers. Since then success has continued. "When we came here the mobile penetration in Pakistan — which has a population of about 155 million — was 3.5-4%, about the same as the fixed line penetration. By the time we got the licence the mobile penetration had started to overtake the fixed line numbers. It's still 14%, so you can imagine the potential. From a business point of view it's an exceptional opportunity."
Demand is already strong for voice and basic text messaging services, and he believes that Pakistanis will develop their enthusiasm for advanced text-based services and text-based interaction with television and radio.
"The key to the design of our entire network, including messaging, is the flexible way in which it can grow," he says. "We are going to be ready for seven million customers in a year from now."
Licence for Bangadesh
The banks and other investors behind Warid are happy with their first 18 months, he implies. "This is our first venture into telecoms, and it's been very successful. The group has just acquired a licence in Bangladesh and we are in the course of selecting our suppliers and we're hoping to start the operations there later this year. We want to have a regional presence, so we become a major supplier of telecommunications services in the region." See the panel for more about the Bangladesh project.
The projected expenditure in Pakistan on the mobile network is more than $500 million. GTB
- CTO, Warid Telecom, Lahore, Pakistan since 2004
- Masters degree in telecommunications technology
- Started as a software developer for Ericsson mobile products
- Joined BT research labs to develop GSM/GPRS traffic models and assessing the impact of introducing new cellular services for Cellnet UK, then a BT subsidiary
- Seconded to lead the core network design and planning activities for the launch of Telfort, a BT and Dutch Railways joint venture to build a GSM 1800 network in the Netherlands
- As an independent consultant involved in various projects in the UK and Middle East; with Ericsson Professional Services, he was the design architect for Vodafone UK's GPRS network and senior consultant for the expansion of the Al-Jawaal network in Saudi Arabia.
- Before joining Warid he was Orange's UK design authority for 3G and GPRS performance management solutions
Warid has picked Ericsson — which is a key supplier to its Pakistan network — to build and operate its new network 2,000 kilometres away in Bangladesh. Warid won the licence in December 2005 and will be the sixth mobile operator in Bangladesh, which has a population of 145 million.
Bashir Tahir, CEO of Warid, told Bangladesh's Daily Star that Ericsson will be awarded a contract to manage the network, which will use Nokia and Motorola base stations.
"We have built a best-in-class network in Pakistan with Ericsson, and we have the same ambition in Bangladesh and that's why we have chosen Ericsson as a strategic partner," Tahir told the newspaper.
Ericsson will supply the complete core and transmission equipment for the network, as well part of the radio network equipment. The contract also includes Ericsson's mobile softwitch solution and media gateway, which will provide Warid Telecom with significant savings, said Ericsson.
The use of the mobile softswitch is a significant first step for an efficient evolution towards all-IP operation. Warid Telecom will be able to offer a wide range of multimedia services to its customers.
Tahir said: "Although we are a late entrant, Warid Telecom has an aggressive build plan that will see us reach the entire Bangladesh population within one year. We will also ensure that we offer our Bangladesh customers a wide range of differentiating services that will add value to their lives, as well as redefine customer service in the country."
The core network will give the operator the opportunity to use network resources for next-generation services in the most cost efficient way, while continuing to benefit from traditional voice services, he said. "It will lay the foundation for a future-proof network that will support the evolution towards real-time voice and multimedia communications over IP." GTB