Baby Steps For NBN Project
The ongoing saga of Jordan's National Broadband Network (NBN) has taken a step forward, with the Ministry of Information and Communications Technology (MoICT) reporting six companies interested in bidding for the tender to complete the project. We take a look at who the potential candidates may be and offer some analysis on how the government could best manage the NBN.
After it received no offers from incumbent operators in the Jordanian market, the government has opted to float the tender out to other companies to move ahead with the implementation. The government is in the process of briefing the six interested parties about the tender, technical specifications and financing mechanisms but , at present, it is unclear what format the project will take. The r eluctance from incumbents in the past remains unclear, al though it may be that the operators see less value in the government-backed project that has been planned for a decade after heavily investing in their own infrastructure . The government asked operators to lease their existing infrastructure in January 2013, in to rapidly facilitate the completion of the NBN project. This would also reduce the cost of the project, but may deter current operators from investing , if it would benefit the competition.
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An outside international company would therefore be better placed to deploy the remainder of the network as it has no stake in the market. In August 2011, it was reported that the government was considering proposals presented by four companies to determine the best way to complete the project. A source in the Ministry revealed these companies were Cisco , HP , Alcatel-Lucent and Huawei Technologies . Huawei, in particular, has been active in the Middle East, deploying 4G LTE networks in the UAE, Saudi Arabia and Oman, and is therefore highly likely to be involved in the Jordan NBN tender. Alcatel-Lucent also has a presence throughout the region, but in its Q312 report, alluded to a reduction of 5,000 staff and exiting unprofitable markets. The Middle East might be one such region where it wishes to reduce its footprint, given the relatively small contribution it makes to the business (7.2%) - listed under the 'Rest of the World' category. Whereas its Latin America operations are growing, the 2012 annual report revealed revenues for the Rest of the World unit have declined since 2011 and it may not wish to take on the Jordan NBN , unless it can recoup a significant profit. Rivals such as Huawei and ZTE are undercutting Alcatel-Lucent's operations in the Middle East, as they are backed by loans from Chinese state-backed financial institutions. Huawei and ZTE have declared their continued interest in the Middle East region, whereas Alcatel-Lucent has not revealed which regions it wishes to exit.
The successful collaboration in Qatar between Ericsson and Q.nbn (the Qatari state-owned company), could see the vendor partner with the Jordan government in a similar venture. The kingdom previously expressed a desire in January 2012 to create a firm which would be jointly owned by the government, telecoms operators and internet service providers to complete the NBN. This may attract Ericsson if it believes the situation is comparable to its success in Qatar. BMI is in favour of the move to centralise operations, rather than the fractured approach that has taken place to date as it should allow for the timely implementation of the remainder of the project. This has been the case with Qatar and we caution that the Jordan government must have a clear framework for its approach to eventually completing this project.