PARIS, 7 December 2004 — Alcatel has been selected by Etihad Etisalat, the second GSM mobile operator and first 3G license holder in Saudi Arabia, to be one of the major suppliers for the new GSM/EDGE network in the Kingdom. This contract increases Alcatel’s leadership in Saudi Arabia and constitutes a major GSM deployment for Alcatel in the Middle East.
Under the terms of the contract, Alcatel will supply its industry leading Evolium solution, including Base Stations Sub-systems (BSS) and revenue-generating applications such as next generation Voice Mail System (VMS) and the transmission system based on Microwave PDH, SDH and Optical device. Alcatel is also responsible for the installation and commissioning of the network in the Kingdom’s Eastern Region all the way up to the Kuwaiti and Iraqi border. Due to Alcatel’s long relationship with Saudi Aramco, more than 20 years, the company is very familiar and “quite comfortable” functioning in the Eastern Region.
In addition to Alcatel, according to Reuters, Ericsson, Motorola and Huawei won part of the SR1.5 billion ($400 million) in contracts awarded by Etihad Etisalat to set up the second Saudi GSM network.
In discussing the new contract and Alcatel’s role, Khaled Al-Kaf, managing director of Etihad Etisalat said, “Alcatel has proven to be a very flexible and supportive partner of Etisalat in the UAE. With the full support of Alcatel we will be able to meet this new global challenge and provide enhanced GSM services to the Saudi people in record time.”
Marc Rouanne, chief operating officer of Alcatel’s mobile communications activities, added: “This project strengthens our excellent business relationship with Etisalat, already experienced in the fixed and mobile business. This new contract brings together expertise and competence from both companies and confirms Alcatel’s commitment to provide fast-growing operators such as Etisalat with the best fitted mobile solutions to support their growth.”
The natively multi-standard design of Alcatel’s Evolium solution allows for the smooth and cost-effective introduction of GSM/GPRS/EDGE and 3G/UMTS capabilities on existing Evolium powered networks, thus enabling operators to implement enhanced broadband mobile multimedia services. Plus, thanks to the continuous cost reductions made possible on Evolium future-proof platforms, and to Alcatel’s extensive applications portfolio including “mobile kiosk,” a turnkey ASP solution for the quick launch of user-centric services, Alcatel believes it is best positioned to assist 2G mobile operators evolve their networks at reduced cost of ownership.
Vincenzo Nesci, VP, Alcatel Middle East, described what it took for Alcatel to win the Etihad Etisalat contract: “We were following this opportunity since the beginning of the process, since the prequalification of the various consortia. We were looking at four groups and proposing our services to them. Three of those groups did bid. We helped them and supported them through the preparation of the bid. When Etisalat was awarded, we reiterated to Etisalat the interest we had for this project. They decided to launch a bid to their GSM suppliers in the Emirates. We participated in this bid knowing that we had some shortcomings in terms of presence in the Kingdom, which would have played against use because other competitors had much stronger organizations in country. However, we decided that it was worth a try.”
He continued, “We submitted our bid and were called in to negotiate several times adjusting our bid to adjustments in terms of specification and requirements. The competitive environment was really extremely tough. At the beginning of October it was clear that there was a chance to win the contract. We knew that Etisalat was considering us seriously but there was not yet any official word. Everything was finalized around Oct. 20 with an engagement to be ready to open the service quite quickly. There are two phases to the contract. The first one in five months and the second one at 12 months.”
Nesci stated that Alcatel’s work on the contract has already begun, with staff arriving in Kingdom almost daily. Getting the job up and running hasn’t been smooth sailing though.
“We are hiring Saudis and we are also bringing in people from outside for the implementation of the contract. We are sourcing experts from Egypt, from Turkey, from Europe — really the best from all over to get this contract up and running in time,” Nesci explained. “However, I must tell you we are facing serious difficulties in getting the visas for our personnel. This is not helping the smooth implementation of the contract. The visa process has been extremely long. We thought we would get much better support from the Saudi authorities in this process. We are talking about obtaining visas for some 80 people and as of Wednesday nearly one-third of the visas are outstanding. We are moving rapidly and we need more flexibility and responsiveness from the authorities.”
Alcatel is no stranger to the vagaries of doing business in the Middle East. Their own company information on Alcatel’s presence in the region reads: “The emerging markets of the Middle East provide key challenges and opportunities as telecom infrastructure and services are increasingly developed across regions with diverse political, economic, regulatory and cultural climates. Focusing on these challenges, Alcatel has established a strong presence in 15 countries of the Middle East region and is considered a long-term telecommunication solution supplier having been in the Middle East since the 1950s.”
While Alcatel has not been a prominent player in the Saudi telecommunications environment in the past, in October 2003, Alcatel was chosen by Saudi Telecom to supply equipment for a DSL network to deliver high-speed services to 38 locations across the country. In a deal worth approximately $6 million, Alcatel supplied its industry leading Alcatel 7300 Advanced Services Access Manager (ASAM) and the Alcatel 5620 Network Manager (NM) to enable ADSL (Asymmetrical Digital Subscriber Line) services to STC subscribers. That broadband contract was completed successfully and Alcatel believes they now have much to offer STC.
“We hope to give them not only a product but to build together some strategy which could help STC in the commercial development of their network in order to have a good return on their investment and have more and more customers utilizing ADSL,” said Nesci.
In addition to the Etihad Etisalat contract, Alcatel has had a several significant wins in the Middle East in 2004, including:
• On Jan. 12, 2004, Alcatel signed a contract for the supply of a complete solution, including GSM/GPRS/EDGE infrastructure and services, to Investcom in Cyprus.
• On Feb. 17, 2004, Alcatel and Orascom Telecom launched the first commercial GSM network in the central region of Iraq including Baghdad. The contract was part of the Global Frame Agreement signed between Orascom Telecom and Alcatel.
• On March 3, 2004, Alcatel signed a contract with Etisalat, the United Arab Emirates’ incumbent telecommunications operator, to supply digital subscriber line (DSL) solutions to deliver high-speed services nationwide. Under the terms of the contract, Alcatel supplied the Alcatel 7300 Advanced Services Access Manager (ASAM) DSL access network solution together with full end-to-end network service management capabilities to enable Etisalat to provide a full range of DSL services to its subscribers.
• On March 30, 2004, Alcatel announced that it would be deploying the new generation of the Sea-Me-We submarine cable network. Alcatel and its co-contractor Fujitsu were awarded the Sea-Me-We 4 project on a turnkey basis. The project will deliver a new terabit cable, which is more than 32 times the initial capacity of the previous Sea-Me-We 3 system, and supports huge data growth, leased line and broadband services.
• On April 29, 2004, Alcatel was selected by Etisalat, to carry out part of its 3G/UMTS deployments in the UAE. In the frame of this award, Alcatel provided Etisalat with 3G solutions including radio systems, circuit switched core network systems as well as associated application platforms.
• On June 21, 2004, Alcatel signed a frame contract to supply DSL solutions to LINKdotNET, Egypt’s largest Internet service provider, which also owns one of the largest Internet backbones in the country.
What does the future hold for Alcatel in the region?
In Fixed Communications, Alcatel is developing an expertise in applied software solutions and next generation IP (Internet Protocol) networks. The acquisition of TiMetra enables Alcatel to offer unequaled flexibility for migrating networks to new data services. Alcatel is also presenting new applications and services accessible over an ever-increasing number of broadband-enabled devices.
For Mobile Operators, Alcatel can offer solutions that include everything from the radio and the core network, to the terminals — including applications platforms and mobile portal capabilities. With its rich portfolio of application solutions designed for 2G, 2.5G and 3G networks, Alcatel is capturing worldwide market share with its advanced multimedia applications for third generation UMTS and GPRS networks.
But that’s not the end of the story. Access to telecommunications is now a major issue in developing countries. Vast, hard-to-reach areas, sparsely populated or with low income, can now be linked to the rest of the world more cheaply through GSM or satellite phone technologies.
The challenge of the digital bridge is a key target for the coming decade and Alcatel plans to help with new technologies and business approaches. As part of an innovative business strategy, Alcatel has teamed up with a number of partners, international institutions, carriers and local authorities, to develop the “Alcatel Digital Bridge” initiative. This initiative seeks to work closely with local partners to satisfy real, clearly defined needs in the field. The goal is to shrink the digital divide, while creating strong added value regionally.
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