Mobile Economy MENA 2018: Mobile operators across the Middle East seeking global 5G leadership
By Jan Stryjak, GSMA Intelligence
Advanced MENA markets are at the forefront of innovation, with the GCC Arab States in particular looking to be global leaders in the deployment of 5G networks. All six GCC markets are expected to launch 5G mobile services in the next two years, followed by relatively rapid 5G rollout. By 2025, 15 markets will have launched 5G mobile services across the whole MENA region.
Enhanced mobile broadband will be the key use case in early 5G deployments in the region, while applications and services for enterprises are tested and then introduced. There also exists a significant addressable market for 5G-based fixed wireless services, particularly in those countries with limited fibre penetration. In the enterprise space, there is broad agreement from MENA operators on the key industry verticals where 5G can deliver the greatest long-term value, including smart cities, utilities, mining and tourism.
While the potential is clear, long-term monetisation may require greater maturity of the 5G ecosystem – particularly for the more innovative and mission-critical services, such as autonomous vehicles and certain smart city applications. Key to this will be Industrywide collaboration and innovation centres, where companies from different sectors can experiment with the 5G ecosystem to develop new products and services.
Subscriber growth slowing, but growth potential remains
By mid-2018, there were 381 million unique subscribers across the MENA region, accounting for just under two-thirds of the population, making the region the second least penetrated region in the world. Despite this, the mobile industry still makes a significant economic contribution to the region’s economy. In 2017, the mobile ecosystem generated 4% of GDP in the MENA region, supported more than 1 million jobs in 2017, and made a substantial contribution to the funding of the public sector through general taxation.
Looking forward, growth potential remains: between 2017 and 2025, the MENA region will see the fastest subscriber growth rate of any region except Sub-Saharan Africa. However, subscriber growth is slowing and, coupled with increased competition and the ongoing uncertain political and economic backdrop, this is creating a challenging financial environment for operators in the MENA region. While these factors will largely stabilise over the next few years, revenue is likely to grow modestly, with operators under increasing pressure to diversify their revenue streams, implement new services and find effective ways to monetise the growth in data traffic to counteract the revenue squeeze. To this end, key opportunities and areas of investment for the region’s mobile operators include 5G, IoT, and the provision of digital identity services.
Realising the potential of a digital society
Public policy and regulation are key factors in the spread of mobile-enabled services across the MENA region. By setting the right regulatory context, governments can create incentives for mobile operators to continually upgrade and expand mobile services in the region. The GSMA encourages governments across MENA to review and recalibrate telecoms policy to advance the digital transformation and to reflect new market dynamics. Three key areas require close attention:
- fostering a transparent and stable licensing framework that promotes a high quality of service and encourages investment
- aligning mobile sector taxation with national ICT objectives so as not to create obstacles to investment or consumer adoption
- creating a spectrum roadmap to meet future demand for mobile services
For the full data sets and extra information on the MENA region, please download The Mobile Economy MENA 2018 report, which will be published on Monday, 26 November at the start of Mobile 360 – MENA in Dubai.