"Fil Mish-Mish" - the story of Palestine's cellular spectrum

Hover over a circle for cable information, or click for interactive graph

Legend

Summary

On March 28 2006, the PA (Palestinian Authority) issues a tender for a 2nd mobile operator (to compete with Jawwal - then the only mobile operator in Palestine since 1999). The prediction of the outgoing PA Minister of Telecom is that this would happen "bukra fil mish-mish" (Arabic idiom: "[tomorrow] morning with apricots" - meaning "probably never" - since the apricot season is short and chances are it isn't tomorrow). In the 4 years that follow, this turns out to be an accurate prediction.

The tender is granted 6 months later (September 20) to Kuwaiti company Wataniya. Almost 2 more years pass until July 29 2008, when they get a fraction of the spectrum they need in order to operate (3 months before that, the GOI [Government of Israel] surprisingly allocates more bandwidth in the same frequency range to Jawwal, giving them a competitive edge, insinuating collusion with the de facto Palestinian cellular monopoly).

After another year and a half (on January 8 2010) it is already clear to both Wataniya and Jawwal that it's futile to assume they'll ever get any more bandwidth, and they decide to focus on getting GOI permissions to build more towers in order to at least achieve decent coverage outside major Palestinian cities.

The winners in this story are Israeli cellular operators who get all the permits and all the bandwith they can eat: although they're not supposed to sell in Palestine, Palestinians know that the only way to get decent service is by buying it "unofficially" from Israel. Waiting for "tomorrow's apricots" is not a realistic option.

Piecing the story together

The following are the selected cables which make up the larger circles of the graph above. Each node in the graph is a US Embassy cable released by WikiLeaks, and arrows point from cables which contain references to older cables.

How was this graph discovered?

• A search for cables containing wataniya originating from any post in Israel (i.e. JERUSALEM or TELAVIV) returns 34 cable MRNs (Message Reference Numbers).

• When you paste them all into CableWeaver, it finds 4 graph clusters:

  • A graph dealing with investment climate reports where Wataniya is briefly mentioned at 10JERUSALEM148. Nothing interesting there.

  • Another graph (too large to be practical), also containing 10JERUSALEM148 (and no other graph from the search results).

  • A small (yet interesting) graph containing 10TELAVIV359 that says:

  On Wataniya, [GOI Coordinator of Government Activity in the Territories (COGAT) Eitan] Dangot said that the GOI intended to withhold the remaining 1.0 MHz of bandwidth in an effort to force the PA to begin regulating illicit radio stations. [which is almost as cynical as GOI can get. Search for the word "cynical" below to see a better example :) ]

  • A graph similar to the one we use here, containing 22 of the 34 cables returned by the search.

• The actual graph we use has a different set of selected cables (aka story line): Not all 22 cables containing Wataniya are selected, and - of course - we've selected the famous "Fil Mish-Mish" cable that doesn't contain the word Wataniya, but adds perspective to the story.

Story line

1) 06JERUSALEM1286 2006-03-29 UNCLASSIFIED//FOR OFFICIAL USE ONLY

"FIL MISH-MISH": PA ISSUES TENDER FOR MOBILE OPERATOR IN PALESTINIAN TELECOM MARKET

Palestinian Authority (PA) Telecom Ministry issued a tender March 28 ... to establish and operate a GSM telecom network and a third generation (3G) network ... as of November 16, 2006

Is the deadline realistic? outgoing PA Minister of Telecom Sabri Saidam has a poetic prediction:

However, as an Arabic saying aptly expresses, it will likely happen "fil mish-mish" or in the time of apricots, meaning not at all. The combination of the incoming Hamas government and the fact that the GOI has yet to assign additional mobile frequencies to the PA suggests that this initiative will fall by the way-side.

2) 06JERUSALEM4239 2006-09-20 CONFIDENTIAL

KUWAITI COMPANY GRANTED SECOND PALESTINIAN MOBILE PHONE LICENSE

[Existing cellular operator] Jawwal's parent company, Palestinian Telecommunication Co. (PalTel), placed ads in the main Arabic-language daily newspapers September 19 congratulating Wataniya and the Palestinian people and also noting that the establishment of a second cellular company is good for competition and transparency.

3) 07JERUSALEM504 2007-03-15 CONFIDENTIAL

UPDATE ON PALESTINIAN TELECOMMUNICATIONS TENDERS

Wataniya ... continues to wait for a frequency to be allocated by the GOI (Government Of Israel).

Why? Here's a theory by Enas Abu Laban, a policy advisor in the PLO's Negotiations Support Unit:

Abu Laban argued that the GOI's refusal to allocate mobile frequencies is an attempt to protect Israeli mobile operators who provide unlicensed cellular services in the WB/G [West Bank/Gaza].

4) 07JERUSALEM1453 2007-07-13 CONFIDENTIAL

UPDATE ON PALESTINIAN MOBILE TELECOM TENDER - GOI FREQUENCY ALLOCATION WOULD BRING USD 355 M TO PA TREASURY

When the license was first awarded, a Hamas-led Palestinian Authority government was in place which served as a significant reason for the GOI not to issue the requested frequency

Palestinian legislative elections in January 2006 were a victory for Hamas, which claimed 76 of the 132 Parliamentary seats. So when Wataniya Telecom won its operator license in September 2006, Hamas was indeed the dominating force in Palestine, even under Fatah President Mahmoud Abbas.

But the Fatah-Hamas conflict erupted in December 2006, only ending after the dissolution of the government (and in particular his dismisal of Prime Minister Ismail Haniya) by President Abbas in June 2007. Thereafter, the Fatah gained control of the West Bank (and democracy(TM) is restored), and Abbas appointed Salam Fayyad as new Prime Minister. US Consul General Jake Walles comments that the USD 355 million licensing fees Wataniya would then pay the PA would help strengthen the newly formed West Bank government:

Allocation of the necessary frequency by the GOI and the resulting payment by Wataniya of licensing fees to the PA Treasury (now controlled by Prime Minister Fayyad) would provide a significant revenue boost to Fayyad's government, create technical and service jobs, and end the de facto mobile telecom monopoly currently enjoyed by Paltel-owned Jawwal.

5) 07JERUSALEM1921 2007-09-12 UNCLASSIFIED//FOR OFFICIAL USE ONLY

POST ADVOCATES FOR MOTOROLA IN ADVANCE OF SPECTRUM ALLOCATION FOR SECOND MOBILE PHONE NETWORK

[Allan Richardson, CEO of Wataniya] said that he expects the GOI to allocate the necessary spectrum in the coming weeks.

Should he be that optimistic?

PA Ministry of Telecom and Information Technology (MoTIT) ... sent a letter to the GOI on September 5, repeating MoTIT's numerous requests to the GOI since 2003 for the release of frequencies to the PA.

6) 08JERUSALEM586 2008-04-04 CONFIDENTIAL//NOFORN

SECOND PALESTINIAN MOBILE PHONE PROVIDER STILL WAITING FOR SPECTRUM

[Richardson] has come to believe the GOI seeks actively "to prevent economic opportunities for Palestinians" and is being influenced by commercial actors with ties to the current monopoly mobile phone provider in the West Bank, Jawwal.

Richardson was dealt from the bottom in GOI's spectrum plan:

according to a GOI plan ... [Wataniya's] receipt of 1800 band frequency would be delayed to a later date

Not only that, all of the sudden, Jawwal is getting some 1800 bandwidth. No "later date" about it.

Richardson complained that the GOI proposal also included a grant to Wataniya's sole Palestinian competitor, Jawwal, of 1800 band frequency now. He said it was "absurd" to expect Wataniya to "wait in line" behind its only competitor. ... Richardson said GOI actions have assured Jawwal a sustainable competitive advantage over Wataniya in the West Bank market.

It is also interesting to note that Richardson threatens that nobody will invest in the West Bank if his initiative doesn't work out.

Richardson said that the failure of Wataniya to get up and running in the West Bank would cast a real shadow over efforts to spur foreign investment in the West Bank through the planned Palestine Investment Conference in Bethlehem next month..."If we cannot begin our operations in the West Bank, few will consider investing there," he said.

7) 08JERUSALEM1372 2008-07-29 CONFIDENTIAL

WATANIYA'S WAIT IS OVER: MOBILE TELECOM PROVIDER HAS SPECTRUM, LOOKS TO BEGIN OPERATIONS

Meaning: "now they only have to wait until March, and then maybe"

the agreement makes 2.4 mhz at the 900 bandwidth available to Wataniya now, and, after some step-up allocations in January, Wataniya will have 4.5 mhz at 1800 bandwidth by March 2009

At least Wataniya can start paying license fees :)

the company will pay the PA an initial installment of USD 80 million in the coming weeks

08JERUSALEM1795 2008-09-25

UPDATE ON WATANIYA MOBILE LAUNCH IN THE WEST BANK

Wataniya made its first license payment to the PA ... The company's launch is scheduled for February/March 2009. ... Wataniya is still awaiting a GOI network construction license required for the network equipment's release from Israeli customs.

8) 08JERUSALEM1795 2008-09-25 CONFIDENTIAL

UPDATE ON WATANIYA MOBILE LAUNCH IN THE WEST BANK

[PA Prime Minister Salam] Fayyad told the Consul General in early April that he had secured and then lost agreement with the GOI to release the necessary spectrum in the 1800 band to allow Wataniya to launch. Agreement was scuttled, Fayyad said, when his Israeli interlocutors (MOD Senior Advisor Amos Gilad and a "regulator" from the Ministry of Communications) claimed to need IDF [Israeli Defense Forces] permission before agreeing on the release [Note: this wasn't mentioned when Jawwal got similar frequencies]. Fayyad wants the spectrum released to the PA, without reference to either of the competitors. "The Israelis should give it to us to administer and stay out of our internal affairs," Fayyad said. Fayyad plans continued contacts with Gilad to resolve this issue.

Why would GOI prefer Jawwal? According to PA President Mahmud Abbas (aka Abu Mazen), there are reasons:

[Abu Mazen] and his team became convinced that PalTel is in active collusion with elements of the GOI. Abu Mazen reportedly told his advisers that when he asked then-Israeli PM Olmert about the spectrum negotiations, Olmert responded: "Why are you Palestinians always f---ing yourselves?" This exchange reportedly convinced Abu Mazen that PalTel (and particularly CEO al-Jabr) is cutting deals with Israeli officials to obstruct progress.

Abu Mazen is not exactly neutral, though:

Abu Mazen's role in this, however, is complicated by the fact that the second mobile telecom provider (Wataniya) is largely capitalized by the Palestine Investment Fund (PIF), and Abu Mazen's own economic adviser, Muhammad Mustafa, is both the Chair of the PIF and the CEO of Wataniya Palestine. (It is also widely believed among Palestinians that Abu Mazen's son, Yasser Abbas, has a financial stake in Wataniya.)

As Consul General Walles comments:

Neither PalTel nor Wataniya has clean hands, and Fayyad is deeply skeptical of both.

Operation "Cast Lead"

2008-12-27 to 2009-01-18

9) 09JERUSALEM618 2009-04-06 SECRET//NOFORN

FAYYAD INTERVENES IN TELCOM ISSUES

[PA Prime Minister Salam] Fayyad told the Consul General in early April that he had secured and then lost agreement with the GOI to release the necessary spectrum in the 1800 band to allow Wataniya to launch. Agreement was scuttled, Fayyad said, when his Israeli interlocutors (MOD Senior Advisor Amos Gilad and a "regulator" from the Ministry of Communications) claimed to need IDF [Israeli Defense Forces] permission before agreeing on the release [Note: this wasn't mentioned when Jawwal got similar frequencies]. Fayyad wants the spectrum released to the PA, without reference to either of the competitors. "The Israelis should give it to us to administer and stay out of our internal affairs," Fayyad said. Fayyad plans continued contacts with Gilad to resolve this issue.

Why would GOI prefer Jawwal? According to PA President Mahmud Abbas (aka Abu Mazen), there are reasons:

[Abu Mazen] and his team became convinced that PalTel is in active collusion with elements of the GOI. Abu Mazen reportedly told his advisers that when he asked then-Israeli PM Olmert about the spectrum negotiations, Olmert responded: "Why are you Palestinians always f---ing yourselves?" This exchange reportedly convinced Abu Mazen that PalTel (and particularly CEO al-Jabr) is cutting deals with Israeli officials to obstruct progress.

Abu Mazen is not exactly neutral, though:

Abu Mazen's role in this, however, is complicated by the fact that the second mobile telecom provider (Wataniya) is largely capitalized by the Palestine Investment Fund (PIF), and Abu Mazen's own economic adviser, Muhammad Mustafa, is both the Chair of the PIF and the CEO of Wataniya Palestine. (It is also widely believed among Palestinians that Abu Mazen's son, Yasser Abbas, has a financial stake in Wataniya.)

As Consul General Walles comments:

Neither PalTel nor Wataniya has clean hands, and Fayyad is deeply skeptical of both.

10) 09JERUSALEM1323 2009-07-31 CONFIDENTIAL

WATANIYA LAUNCH IN JEOPARDY

The GOI notified the Palestinian Authority (PA) and Wataniya July 30 that, beginning August 1, it would allocate a portion of the bandwidth requested by the PA to launch the second mobile telecom operator. The allocation of 3.8 MHz is less than the 4.8 MHz agreed upon in the July 2008 agreement between the PA and GOI. According to CEO Allan Richardson, Wataniya cannot launch with the spectrum announced July 30.

The Quartet plans to coordinate international pressure on GOI to respect the 2008 agreement:

the Office of the Quartet Representative stressed the importance of coordinating the international response to the GOI at the highest levels to provide the requested bandwidth.

11) 09JERUSALEM1497 2009-08-24 CONFIDENTIAL

WATANIYA BOARD SETS SEPT 15 DEADLINE FOR SPECTRUM ALLOCATION

Wataniya Mobile announced on August 23 it will suspend operations, seek repayment of USD 140 million in licensing fees, and pursue damages from the PA if the PA cannot secure GOI release by September 15 of the 4.8 MHz needed for the mobile phone network launch.

Would the PA bend GOI's arm?

Cabinet Secretary and Advisor to the Prime Minister Hasan Abu-Libdeh emphasized the importance of Wataniya's launch, but said he would not recommend that PM Fayyad call Israeli PM Netanyahu, noting that Fayyad had already weighed in with the GOI in May, to no avail

It's not only the immediate threat of paying Watania back. Palestinians know what else they'll lose if Watania goes down:

If Wataniya launches, PIF contacts estimate it could create approximately 2,500 jobs, USD 50 million per year in tax revenues to PA coffers, and upwards of USD 150 million in construction contracts.

Note: PIF (Palestine Investment Fund) is a large Wataniya investor.

12) 09JERUSALEM1888 2009-10-16 CONFIDENTIAL//NOFORN

WATANIYA QUIETLY BEGINS OPERATIONS, AIMS TO CREATE "FACTS ON THE GROUND"

Wataniya Mobile announced on August 23 it will suspend operations, seek repayment of USD 140 million in licensing fees, and pursue damages from the PA if the PA cannot secure GOI release by September 15 of the 4.8 MHz needed for the mobile phone network launch.

Would the PA bend GOI's arm?

Cabinet Secretary and Advisor to the Prime Minister Hasan Abu-Libdeh emphasized the importance of Wataniya's launch, but said he would not recommend that PM Fayyad call Israeli PM Netanyahu, noting that Fayyad had already weighed in with the GOI in May, to no avail

It's not only the immediate threat of paying Watania back. Palestinians know what else they'll lose if Watania goes down:

If Wataniya launches, PIF contacts estimate it could create approximately 2,500 jobs, USD 50 million per year in tax revenues to PA coffers, and upwards of USD 150 million in construction contracts.

Note: PIF (Palestine Investment Fund) is a large Wataniya investor.

13) 09JERUSALEM2197 2009-12-04 CONFIDENTIAL

WATANIYA PALESTINE: ONE MONTH POST-LAUNCH

According to the "assurances" reportedly given by the GOI to OQR [Office of the Quartet Representative] prior to the launch, Wataniya will receive the remaining 1.0 MHz spectrum when it reaches 70% capacity on its current allocation of 3.8 MHz. (Note: Neither Richardson nor the PA Ministry of Telecommunications has received such assurances from the GOI in writing.) Richardson expects Wataniya to reach 175,000 subscribers, equaling approximately 70% of its capacity in approximately four to five months (April/May 2010).

Bandwidth is not the only problem:

coverage remains weak to non-existent between cities due to Wataniya's inability to secure any permits to build towers in Area C. Wataniya, like most other ICT companies, also continues to face difficulties and delays clearing equipment, such as base stations and transmitters, into the West Bank, according to Richardson.

14) 10JERUSALEM40 2010-01-08 CONFIDENTIAL

PALESTINIAN MOBILE OPERATORS ASK FOR HELP IN AREA C

The two Palestinian mobile telephone operators (Jawwal and Wataniya) say they continue to struggle with lack of coverage throughout the West Bank, penetration of Israeli settlement-based cellular networks into Palestinian urban areas, and small frequency allotments (compared to those of their Israeli competitors). ... Jawwal executives told EconOffs that their customers are limited to roaming on Israeli carriers, at great expense, whenever they travel between West Bank cities. Comment: Most private sector contacts carry two phones: one Palestinian and one Israeli. They confirm that it is more cost-effective for them to use their Israeli phones in many areas inside the West Bank.

How hard is it to accept a permit for a cellular tower?

The GOI has not approved an Area C permit for cellular operators since 1999, according to Jawwal.

And what's the excuse?

According to Wataniya engineer Jamal Yassen, representatives from the Coordinator of Government Activities in the Territories (COGAT) told him during a late December 2009 meeting that they had received an order to freeze all applications for building sites in Area C for Palestinian and Israeli operators as part of the GOI's freeze on residential construction in West Bank settlements.

Note: "the freeze" was/is/[wasn't/isn't] on illegal Jewish settlements, which makes this excuse pretty cynical

"Unofficial" penetration by Israeli providers is no "accident":

ConGen officers whose cellphone service is provided by an Israeli mobile company routinely get a strong signal in the West Bank, even when inside PA buildings. Palestinian executives claim that *this must be deliberate, as there are technical methods that allow operators to prevent unwanted "bleeding" outside the desired service area.

Nobody speaks about bandwidth anymore. It's pretty clear that the "mish-mish season of frequencies" will never come. Both Palestinian providers focus on cuttting their losses in the coverage arena against the Israeli providers:

Jawwal and Wataniya executives have grown weary of discussions on spectrum allocation. They now prefer to focus on Area C issues and technical improvements to their services, and have asked for USG assistance in raising the outstanding Area C permits with the GOI.

Post script

In February 2013, Wataniya Palestine Mobile released its annual report for 2012. News media emphasized that the company had improved its net losses to USD 23.8 million, a 9% increase from its 2011 USD 26.2 million loss. Wataniya CEO Fayez Husseini said he hoped they would be able to expand to Gaza in 2013.

A commercial advertisement for Wataniya Palestine Mobile Telecommunications proudly states:

Together, we open the doors to new experiences, to wide prospects for work and creation, all pushing for the development of the Palestinian economy. We take our role in social responsibility, and in fostering skilled and innovative employees to prove that Palestine is a place that welcomes and attracts Arab and foreign investors.