Session III: Case Studies of Telecommunication Market Liberalisation

Tuesday 22, January 2002

By: Mohammad Omran Chairman Thuraya Satellite Telecommunications Company Abu Dhabi, UAE

22-01-2002 THURAYA Proprietary Information 1

Our vision is to be the market leader in our coverage area, providing valuable and affordable telecom solutions to our customers. Our strength comes from our experience in Telecom technology and our customer focused strategy. Our plan is to achieve this through product excellence, continuous innovation and quality customer service.

22-01-2002 THURAYA Proprietary Information 2

Thuraya Coverage Area

n e y d Finland Iceland a e r w w o S N Estonia L a tv ia Denmark Lithuania United Kingdom Belarus Ireland Netherlands n y m a Poland B e lg iu m e r G C z e R e c h Luxembourg p u b li k ia Ukraine c lo va Kazakhstan d s t ria S M la n A u a ry o tz e r n g ld France w i H u a Russian S v Sloven iaC ro a tia Romania ia It Federation a C B o o f ia ro H e sn i v l rz a & F R la y a t eg . os ia u g G Y a B u lga ria e U o n i o rg zb France c e d ia e Kyrgyzstan M a Turkey kis Albania Armenia Azerbaijan ta Spain Ita ly T u n Spain r k m Greece Turkey e n i Ta jik is t a n Portugal s Ita ly tan China G r e e c e Syrian Arab Rep. Cyprus Lebanon Ir aq Afghanistan

Tunisia Iran n Jord an a o t c is c k o Algeria Kuwait a N Bhutan r P e p a o Libyan Arab Jamahiriya l M Egypt Bahrain India

Qatar ite d Saudi Arabia U n b Bangladesh r a e s A ira t E m India n a m M auritania O Mali Niger Chad Er n S it m e e n e re Y e g a l Sudan a Burkina Faso D jib ou ti Guinea Gambia

a Somalia

o Nigeria

n Benin Cote g a n Ethiopia S ri Lanka

a c o n fri

T A L h l i o ra Guinea b d’Ivoire o n t c e G e li ri r C u b Bissau a e R e p m a S i e r r a C L e o n e

22-01-2002 THURAYA Proprietary Information 3 GSM Coverage: Middle East & Africa

22-01-2002 THURAYA Proprietary Information 4

GSM Coverage: Europe

22-01-2002 THURAYA Proprietary Information 5

Thuraya Integrates Terrestrial (GSM) & Satellite Services

Thuraya handheld terminal features Value Added Services ΠDual mode (Satellite / GSM) handheld terminals ΠShort Message Service (SMS) ΠSimilar in size, weight and features to GSM phone ΠVoice mail ΠLocation determination capability using GPS ΠOperator assisted services ΠVoice quality comparable to GSM ΠInteractive Voice Response (IVR) Services ΠPrepaid Services Teleservices ΠHot billing ΠVoice telephony ΠEmergency services Supplementary Services ΠGroup 3 fax ΠCall forwarding, barring, waiting, hold ΠSMS beam broadcast ΠCalling Line Identification Presentation (CLIP) ΠConference calling Bearer Services ΠAsynchronous Data Services (2.4 Р9.6 kbps)

22-01-2002 THURAYA Proprietary Information 6 ITU Filing Process-1995

Modifying ITU Radio Regulations-1997

Establishment of Multilateral Coordination Process-1997

Grant of L-band Spectrum-1999

Start Licensing Process-1999

Handsets Type Approval-2000

ITU GMPCS Arrangements-2000 2001 July 15 Start ofService Common Air Interface Standardization-2000

United Nation Registration-2001

22-01-2002 THURAYA Proprietary Information 7

Classification of Regulations

ΠSelf-regulation by the state-owned monopoly operator

ΠMinistry of the government which is responsible for policy, and in some cases retains overall responsibility for the dominant operator

ΠAn independent regulatory function which either reports to a government Ministry, such as that in UK, or an independent commission, such as in Jordan and Egypt

22-01-2002 THURAYA Proprietary Information 8

Example 1: Liberal Market-Europe

Thuraya obtained 3 important decisions in Europe on Free Circulation and Use of Thuraya Mobile User Terminals in CEPT member countries. Exemption from Individual Licensing of Thuraya Mobile User Terminals in CEPT Member countries. In addition to the milestone compliance. Examples for liberal markets are UK, Denmark, Netherland, Ireland, Germany, etc. In many cases no license fees in many European countries.

22-01-2002 THURAYA Proprietary Information 9 Example 2: Partially Liberal Market-India Subcontinent

Stringent requirements to access the market: -Establishment of a gateway -High revenue sharing -High entry fees

22-01-2002 THURAYA Proprietary Information 10

Example 3: Market With Regulatory Commissions- North African Countries

Clear regulatory process with reasonable fees

22-01-2002 THURAYA Proprietary Information 11

The Need For Liberal Market (Regulation)

ΠTo protect public interest ΠTo allow open and fair ΠTo license service providers competition ΠTo regulate service providers ΠTo control and use frequencies ΠTo set technical standards ΠTo monitor quality of service and initiate corrective action ΠTo set financial, administrative and technical terms for interconnection ΠTo control the type approval of customers premise equipment and its connection to the public network ΠTo consider complaints from users and take corrective action if necessary 22-01-2002 THURAYA Proprietary Information 12 Thuraya Service Providers Relation

ΠExamination of Thuraya market (Monopoly, Ministry, Commission, etc)

ΠSelecting competent service provider that can obtain the license, financially strong and have strong distribution channels

ΠWe train and support the service providers in marketing Thuraya services and monitor competition

22-01-2002 THURAYA Proprietary Information 13

Impact on Telecom business due to Change in Policies ΠA majority of ITU Member countries have initiated telecom sector reforms that have established telecom regulatory bodies, opened up huge untapped markets, introduced simplified regulatory / licensing framework, etc ΠThe WTO regime has introduced new opportunities for foreign companies

22-01-2002 THURAYA Proprietary Information 14

Changes in Polices that will ensure better Market Access Œ Lighter access regulatory procedures(General license, blanket approval) Œ Regional Regulatory Authorization (One Stop Shopping, Common Application Form, etc) as against National Regulatory Authorization Œ Mutual recognition arrangements and Free circulation of terminals (GMPCS MoU, ERC Decisions, WTO, CITEL and APT MRA’s, etc) Œ Different treatment for satellite operators that have regional or global coverage as against terrestrial networks that have limited national coverage Œ Mutual recognition of Licenses Œ License fee to recover only Administrative costs associated with grant of License Œ Public availability of licensing criteria and procedures Œ Effective implementation of fair and transparent regulatory framework 22-01-2002 THURAYA Proprietary Information 15 Thuraya’s perspective on competition as a satellite operator Œ Focus on regional market that lacks basic telecom infra-structure as against global market Œ Closer relationship with local service providers for marketing, billing and customer care Œ More user friendly terminals (smaller and compact in size, multi mode options, multi functional (GPS, Higher data rates, etc)) Œ Reduction in end-user tariff as compared to earlier operators in view of economic situation and affordability of the target market Œ Customized solutions for different market segments (payphones, fleet management, maritime applications, etc) Œ Increased cooperation with national PTT’s for implementation of Universal Access and Rural Development

22-01-2002 THURAYA Proprietary Information 16

Conclusion

ΠWe help in developing telecommunication polices in ITU

ΠWe encourage the regulators to translate these polices into legislation/decrees

ΠWe encourage the construction of regulatory organisations to establish regulatory procedures to protect both the public and governments and to allow competition

22-01-2002 THURAYA Proprietary Information 17

Thank You…

www.thuraya.com

22-01-2002 THURAYA Proprietary Information 18