LIVE FROM GSMA MOBILE 360 MIDDLE EAST: Mobile broadband (3G/4G) technology will account for more than 60 per cent of mobile connections by 2020 across the hugely diverse Middle East and North Africa (MENA) region, up from 41 per cent today, according to a new GSMA report.
The study, The Mobile Economy – Middle East and North Africa 2016, said the availability of mobile broadband continues to grow in the region and has increased smartphone adoption, which is “helping to bridge the digital divide and usher in innovative new mobile services”.
It said there are 339 million unique mobile subscribers across 25 markets in the region as of Q2 2016, which is forecast to grow to 385 million by 2020, while smartphone connections have more than doubled over the last three years to reach 263 million (accounting for 42 per cent of total connections in the region), and will hit 467 million by the 2020 timeframe.
MENA will have the second fastest growth in smartphone adoption over the next few years (behind only Sub-Saharan Africa), bringing smartphone adoption to 65 per cent of total connections by 2020.
Mobile broadband connections will overtake 2G in early 2018. And despite the comparatively late arrival of 4G networks in the region, LTE is starting to accelerate. Since the first LTE networks were launched in late 2011, a total of 40 LTE networks have been deployed in 17 countries, and three more countries (Djibouti, Egypt and Libya) plan to launch 4G networks in the next few years.
Growth in mobile broadband connections over the next five years will be relatively rapid, with a CAGR of 14 per cent between 2015 and 2020 compared to a global average of 13 per cent.
Of course, the 25 markets in the study cover a huge variance in levels of market maturity. In Israel and Kuwait, for example, mobile broadband connections accounted for 88 per cent and 84 per cent of total connections in mid-2016, and will account for more than 95 per cent by 2020. At the other end of the scale, only 4 per cent of connections in Somalia were mobile broadband by Q2 this year, and Comoros and Palestine have yet to launch 3G networks.
Mats Granryd, director general of the GSMA, said that while operator investment in mobile is helping to “connect the unconnected” in less developed markets, and fuelling innovative new services like the Internet of Things and smart cities, governments also have a role to play.
“We encourage governments to continue to invest in mobile infrastructure and ensure there is sufficient spectrum to meet demand, as well as follow policies that encourage the adoption of mobile services,” he said. “Governments should also provide citizens with affordable internet access that will help to drive economic growth.”
Mobile driving GDP
Governments in the region will likely be buoyed by some of the latest figures relating to the mobile industry’s contribution to GDP.
The GSMA’s study said the sector is forecast to contribute almost $200 billion per year by 2020 (approximately 4.2 per cent of total GDP), up $50 billion from last year. Last year the mobile ecosystem supported local economies with more than 1 million jobs.
In terms of individual markets, the report noted huge differences in maturity between states such as Bahrain, Kuwait and UAE, where 77 per cent of the population have a mobile subscription, compared to countries like Comoros, Djibouti and Somali, where penetration is as low as 30 per cent.
Overall growth slowing
This situation is also unlikely to improve. Subscriber rates are expected to slow over the next few years, as more developed markets approach saturation, while less developed markets suffer from political and economic conditions.
Mobile penetration across the region will fall below the global average of 73 per cent, reaching only 63 per cent of the population by 2020.