Intelligence Brief: What is the 5G opportunity in MENA? – Mobile World Live

Intelligence Brief: What is the 5G opportunity in MENA?

05 DEC 2018

Last week, policymakers and senior industry stakeholders convened in Dubai for the GSMA’s sixth Mobile 360 Series MENA event.

GSMA Intelligence analysts joined other delegates to discuss the opportunities and challenges facing the region’s mobile sector, and to examine how technologies, including 5G, artificial intelligence (AI) and blockchain are enabling operators and governments to realise their digital ambitions and deliver a socio-economic impact.

5G will be a long-term play
While the previous year’s event centred on topics such as digital technologies addressing social challenges and driving innovation, 5G stole the limelight in 2018, and understandably so given the hype surrounding this next-generation technology and the significant capex implications it is likely to have.

The 5G era is certainly in sight, although operators consider that it will take a number of years to fully develop. Etisalat, for example, stated that 5G represents an opportunity to earn better returns from growing data traffic, but conceded that the consumer proposition has yet to materialise, which is due to the widespread availability of affordable and high-speed 4G services. STC was similarly long-termist, counselling that payback on 5G “will take time”.

Still, fast progress is being made in parts of MENA, with plans for near-term commercial launches putting operators’ PR teams into overdrive. In fact, major operators in the Gulf Cooperation Council (GCC) Arab States (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE) are looking to be global leaders in 5G deployments, and to keep pace with the likes of South Korea and the US. While not as high as some markets, GSMA Intelligence expects there to be 18 million 5G connections across these countries by 2025 (excluding licensed cellular IoT), representing a 16 per cent adoption rate (see chart, below).

Fixed wireless access
One use case that has the attention of several GCC operators is fixed wireless access (FWA), which uses point-to-point mobile signals rather than copper or fibre cables to provide last-mile fixed broadband connectivity.

So far, much of the discussion around 5G-based FWA has concentrated on the US; however, it will also be an early 5G solution in the GCC Arab States, allowing operators to extend high-speed broadband beyond their existing fixed line coverage, in some cases being a stopgap until fibre is rolled out. Alternatively, it could complement fibre broadband services in congested urban areas where that network is completely utilised.

Consequently, there is momentum around fixed wireless in MENA, with several operators having launched or intending to launch services between 2018 and 2020:
Etisalat announced the launch of its first commercial 5G network in May 2018. In doing so, the operator stated that 5G-based fixed wireless services would become available in selected parts of the UAE in September, with access increasing to other parts of the country depending on consumer demand;
Ooredoo launched its 5G-based fixed wireless network in Qatar at the same time using 3.5GHz spectrum. The operator is on track to hit its target of 100 5G network tower installations, and has already taken delivery of the first 5G home broadband devices;
STC, meanwhile, has announced that its 5G network in Saudi Arabia has gone live following successful technical experiments and trials concluded in January 2017. It is continuing to build out the network in the anticipation of compatible devices becoming available in 2019; and
Zain and VIVA have each obtained 90MHz of spectrum in the 3.5GHz band for the provision of fixed wireless services, but require the Bahraini regulator’s approval to launch.

Further, due to the economic costs of deploying fibre to rural communities and the challenging terrain of certain geographies in MENA, 5G-based fixed wireless could represent a viable opportunity to deliver a superfast, yet affordable, broadband service to areas that do not currently have access to fixed line broadband.

Indeed, a significant addressable market exists for 5G-based FWA services in countries with limited FTTH/B penetration. FTTH Council Europe figures show FTTH/B penetration is 14 per cent in Saudi Arabia, 6 per cent in Kuwait and just 1 per cent in Jordan. For MENA operators, 5G-based fixed wireless therefore represents a promising incremental revenue opportunity, as well as a potentially lower cost of deployment, a faster time to market and a quicker return on investment compared to fibre.

Moreover, while fixed wireless may not trigger the same interest or buzz as immersive reality or autonomous vehicles, the promise it holds for greater digital inclusion, better in-home connectivity and incremental value for operators means that it is set to be an important 5G use case in the short-run at least.

– James Robinson – senior analyst, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.