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MOBILE HANDSET MAKERS URGE END TO GPS BAN
BY KHALED EL-BARAMAWY
Any Egyptian with an Internet connection can use Google Earth to get a bird's eye view of the Inshas nuclear reactor, but the same underlying technology cannot be legally employed to help a motorist with a mobile phone get directions to the nearest Cairo hospital. It's a strange contradiction that has mobile phone makers frustrated and market observers scratching their heads.
Global positioning system (GPS) technology - traditionally used as a tool to navigate aircraft, guide ships and track container shipments - is a standard feature on the latest generation of mobile phones. GPS functions such as location-based advertising and digital street maps that provide directions to city attractions are big selling points for mobile handset makers. Dozens of models are already on the market, and industry analysts estimate that 50 percent of the world's mobile phones will include GPS applications by 2010.
But their future in Egypt is in doubt. The government's long-standing ban on commercial GPS devices could shut out an entire generation of 3G mobile phones. And that would be a shame, says Ali Fahmy, executive director of Delta Group, a mobile distributor and application developer, who contends that Egyptian consumers are being robbed of the opportunity to benefit from GPS technology. "Its advantages [are simply too many that it] cannot be withheld from individual use," he says. "Only a few governments still withhold this technology from their people under pretext of security."
Egypt is among them. The government claims that GPS applications pose a security risk, though it has seldom discussed publicly the exact nature of this risk. But it goes without saying that the technology's origin as a military application makes national security policymakers a wee bit nervous.
State security aside, until recently two technical issues stood in the way of the technology's commercial application, according to Adel Yahia, president of the Geographical Information Systems (GIS), a local software provider. "The first was the scarcity of reasonably priced devices that support this technology. The second was the limited number of applications that utilized satellite information and primary coordinates [needed to support these] applications to make them effective and easier to use."
As governments around the world removed their restrictions on the commercial use of GPS devices in the mid-1990s, new applications flourished and economies of scale drove the price of the technology down. But it was the mobile phone manufacturers who, by adding GPS applications to their handsets, literally put the technology in people's hands. "Thanks to the increase in mobile telephone penetration, which exceeded 3 billion users as of the end of 2007, it's now easy to find dozens of handsets that support GPS," says Yahia.
But none of these models are available in Egypt. At least not legally. Telecoms Law 10/2003 outlaws the import of GPS-equipped mobile phones, and retailers found selling them may have their stocks confiscated. Authorities, however, turn a blind eye to individual users owning these restricted handsets.
To date, mobile manufacturers have held back shipments of their GPS-equipped models to Egypt, supplying instead entry-level models without the prohibited technology. "Officially, any GPS-equipped device from Nokia is [barred] entry into the market," explains Dana Adnani, Nokia's market communication manager for North Africa and the Levant region. "The same goes for all companies manufacturing mobile phones with GPS technology."
Yet even the casual observer will recognize the dozens of GPS-equipped models in the hands of Egyptian users. These are not shipped to Egypt by their manufacturers, Adnani assures. Instead, traders smuggle them into the country and sell them under the counter, or individuals purchase them during their travels abroad.
The biggest loser in all this, explains Mohamed Nagy, a branch manager of i2, a regional mobile phone distributor and retailer, is the government. "Although GPS devices and mobile phone sets that support this feature are legally prohibited from entering the country, thousands of them enter illegally," he says. "So the government is losing the customs duties and sales tax, which are worth millions."
But consumers also get a bum deal, he says. "Users also lose when they buy smuggled handsets because they give up their warranty, rights to maintenance and all other services."
For now at least, the government has suggested that mobile makers sell their new models in Egypt with the GPS features disabled, an option the manufacturers have categorically ruled out. "It's impossible for any company in the world to accept such a request," says Tamer Karam, Sony Ericsson's director of Egypt operations. "Technology is going ahead in one direction towards expansion and development, and it doesn't make sense that a company would tailor make handsets for a specific group of users just because they refuse to join progress."
His sentiment is echoed by executives at Nokia, the world's largest mobile handset manufacturer. Nicholas Savander, the company's vice president and director of services and programs, ruled out the option, explaining that the Finnish firm has already invested an enormous amount of time and money to develop GPS applications for its handsets. "There's no way to even discuss this issue now," he says. "We've recently launched the second generation of Nokia's Smart Maps application designed primarily on GPS. This application [offers] maps of cities, restaurants, malls and recreation venues."
Over 40 percent of all handsets produced by Nokia within the next two years will support GPS-based applications. Savander says it is absurd to consider reversing course at this point. "Who would regress to meet the demands of markets that refuse to keep up with progress when we're moving at a fast pace towards developing and devising new technologies?"
The economic losses resulting from a ban on GPS-equipped mobile phones go beyond those of foreign handset manufacturers. Local firms claim they are losing potential revenue every day the ban is in place. Mobile phone operators Vodafone Egypt and Etisalat, both of which acquired 3G licenses in 2007, are unable to utilize the full range of 3G applications because many of them are GPS-based.
Similarly, Simtech, a local firm that specializes in the design of digital maps, says it has GPS-based applications ready, but it must now wait for government clearance before it can upload them to mobile phones and various GPS devices. "The company has designed several applications in coordination with foreign companies and already has its map-based programs on mobile handsets in Egypt," says Mohamed El-Sayed, the company's vice chairman. "But these are offline because telecommunications operators are prohibited from making the technology available to their subscribers."
Hoping to break the embargo, a group of IT firms has formed an ad hoc alliance to lobby for the introduction of GPS services in Egypt. The group's members, which include Nokia, Sony Ericsson, Motorola, Lenovo and HP, have demanded an official explanation for the prohibition of their products, arguing that they're incurring huge financial and market share losses due to the ban.
Negotiations between the private sector and the government have reached a stalemate and the National Telecommunication Regulatory Authority (NTRA) has been caught in the middle. As the national regulator of the telecommunications sector, it must seek to find middle ground between those who wish to introduce new technologies to develop the communications sector and those worried these technologies could compromise national security.
NTRA chairman Amr Badawi believes there is no doubt that the ban on commercial GPS technology will eventually be lifted. When, though, is a big question. "The problem is that the procedures have taken longer than they should to coordinate between the various security [bodies] and authorities [to discuss the issue]," he says. "There's a lot of interest and pressure from several sectors, such as mobile telephony operators, mobile and smart sets distributors and automotive companies. They're all officially requesting the [allocation of] extensive bandwidth for this technology."
Despite the commercial interest, it may still be a long wait until the GPS ban is lifted. That's not to say that the effected parties have not gained ground. Recently, the NTRA stated that it is willing to conduct the initial legwork required to consider introducing the service. "The frequency spectrum committee at the NTRA is currently investigating all the regulatory issues in order to provide the services and frequencies necessary for the application," Badawi says. Although he is unwilling to commit to a specific timeline for the introduction of the service, he did note that "a final statement will be made soon regarding making this service officially available."
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JUST A MATTER OF TIME
GPS technology has a wide range of commercial applications, from interactive digital maps to location-based advertising and interactive gaming. Egypt and Syria are the only countries in the region that prohibit the commercial use of this technology on mobile phones. Both cite unspecified security concerns.
It's not the first time for security concerns to be raised when it comes to telecommunications applications, says Ali Fahmy, executive director of Delta Group, a mobile handset and applications distributor. He recalls how 20 years ago Egyptian consumers were prohibited from owning satellite dishes due to security concerns. As the technology proliferated and public pressure mounted, a decision was made in the early 1990s to lift restrictions. Today, an estimated 47 million, or 60 percent, of Egyptian households have access to satellite television.
GPS technology appears headed on the same path, Fahmy says. But with the ban still in place, it has created an obstacle to the development of the telecom sector. "What makes it strange is that a detailed application like Google Earth Pro, the copies of which are sold for less than $20, can capture detailed pictures of any place in the world in two hours," he says.
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