5G in MENA: a marathon, not a sprint - GSMA Mobile 360 Series

5G in MENA: a marathon, not a sprint

By Jan Stryjak, GSMA Intelligence

Last week saw analysts, policymakers and industry stakeholders from the Middle East and North Africa (MENA) convened in Dubai for Mobile 360 – MENA. Delegates discussed the opportunities and challenges facing mobile operators and other ecosystem players, and examined how innovative technologies, including 5G, artificial intelligence (AI) and blockchain, are enabling operators and governments to realise their digital ambitions and deliver a socioeconomic impact.

5G is on the horizon but will be a long-term play

The 2018 Mobile 360 – MENA was the sixth iteration of the event and the first as a standalone two-day conference. 5G really came to the fore this year 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, with all six GCC markets expected to launch 5G mobile services in the next two years. While there was unanimous agreement that 5G represents an opportunity to earn better returns from rapidly growing data traffic in the region, there was also claims that 5G is very much a long-term vision: STC and Etisalat International CEOs Nasser bin Sulaiman Al-Nasser and Hatem Dowidar (respectively) said that the consumer proposition for 5G has yet to fully materialise, and that the return on investment “will take time”.

GSMA Intelligence, as outlined in its ‘The Mobile Economy Middle East and North Africa 2018’ report, expects there to be 18 million 5G connections across these countries by 2025 – 16% of total connections. While this is slightly above the global average, it does represent a significantly slower adoption rate than what was seen in these markets with 4G. In fact, herein lies the issue: affordable and high-speed 4G is widely available across the Middle East. Therefore, an initial use case for 5G – enhanced mobile broadband (eMBB) – will not be so attractive given consumers can get everything they really need over 4G networks. Having said that, as discussed at Mobile 360 – MENA (and within another GSMA Intelligence report – ‘5G in MENA: GCC operators set for global leadership’), 5G-based fixed wireless will also be an early use case for 5G around the GCC, allowing operators to expand their high-speed broadband offerings 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.

Regulators urged to take a back seat on 5G

Numerous sessions at the event focussed on the regulatory approaches necessary to drive progress in the 5G era. Etisalat’s chief legal and regulatory affairs officer Kamal Shehadi said policy makers should take “their foot off the brake” and allow the ecosystem to develop, intervening only when necessary. Meanwhile, Homoud Alkussayer, VP of governance and regulatory affairs at STC, said there was an opportunity for regulators to think about market development, while reducing taxation and royalty payments to support operators in the long term. Alkussayer added regulators are now more vital than ever, but concurred with Shehadi that there was a big need to align policy with what is required in the market.

One key area of discussion was spectrum, with warnings that 5G faces becoming an expensive failure without the availability of affordable spectrum, particularly high-band frequencies. Chafic Traboulsi, head of networks at Ericsson Middle East and Africa, said that if the correct spectrum bands – particular the higher mmWave frequencies – are not made available for the service providers, then 5G “will be a flop”. Traboulsi also highlighted other challenges on the road to 5G, including ensuring operators protect their existing 4G network investment which, he claimed, will support the majority of mobile traffic for the next few years.

Despite these concerns, there was an air of optimism at the event, and a message that was repeated throughout was that the industry is prepared. Various speakers said that the technology and standards for 5G are ready; it is now just a question of how to make money out of it.

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