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Operators want to deploy 5G in the Gulf but spectrum availability and collaboration will be key to adoption

Karim Yaici Senior Analyst, Research
Johann Adjovi Partner, Consulting

"Operators in the Gulf region must plan a multi-phased approach to deploying 5G to maximise the opportunity and minimise the risks."

The Gulf was one of the first regions to launch 4G services in 2011. Adoption of these services was initially slow, but the growing penetration of smartphones, extended network coverage and increased demand for data services have helped to accelerate take-up.

Some regional operators such as Etisalat (UAE), Ooredoo (Qatar) and STC (Saudi Arabia) have announced plans to launch 5G even though they have only recently deployed LTE-Advanced (LTE-A). However, 5G has many unknowns: the definition of the use cases is not finalised, standardisation is progressing slowly and the regulators are yet to release additional suitable spectrum. In these circumstances, there will be challenges to the deployment of 5G by 2020, even if 2020 is widely regarded as the target launch date in the Gulf region.

Analysys Mason attended the GSMA Mobile 360 - Middle East conference, held in Dubai (UAE) on 17–18 October 2016. At that event, several equipment vendors shared their vision of 5G, and 5G front-runners (NTT DoCoMo and Korea Telecom (KT)) shared their plans and experiences with pre-5G roll-out. In this comment, we examine the status of 4G (LTE) and 4G+ (LTE-A) launches in the Middle East and North Africa (MENA), and assess whether the Gulf region is ready for 5G services.

Operators in the Gulf region were early to deploy LTE and they are eager to maintain their leadership with 5G technologies

According to Analysys Mason's Wireless networks tracker, 4G (LTE) networks were deployed in MENA as early as September 2011 and 4G+ (LTE-Advanced) networks have been deployed at a relatively quick pace since January 2014 (see Figure 1), with Viva (Bahrain) and STC (Saudi Arabia) being the forerunners. LTE take-up has also accelerated since 2015 due to improved coverage and an enlarged handset ecosystem, with 4G/4G+ expected to represent more than a quarter of total connections in the Gulf region at the end of 2016.

Figure 1: Network launches by technology generation, Middle East and North Africa, 2Q 2011–2Q 2016

Figure 1: Network launches by technology generation, Middle East and North Africa, 2Q 2011–2Q 2016

Etisalat (UAE) aims to launch 5G services by the time of Dubai Expo2020, while Ooredoo and Vodafone in Qatar plan a launch ahead of FIFA World Cup 2022. Equipment vendors such as Huawei, Qualcomm and Nokia are keen to use 5G to support Gulf operators in maintaining leadership in mobile services. Vendors have an opportunity to offer operators in the region the full suite of evolution technologies from LTE-A to 4G Pro and ultimately to full 5G services.

Spectrum availability and collaboration will be key to preparing for the launch 5G services in the Middle East

During GSMA Mobile 360-Middle East conference, 5G was presented as the ultimate set of network technologies that would create a unifying connectivity platform with the ability to operate over sub-1GHz spectrum bands as well as on extremely high frequencies (above 24GHz, known as 'millimetre wave' frequencies). Telecoms equipment vendors have also reiterated the three main use cases for 5G (see Figure 2):1

  • enhanced mobile broadband (eMBB): with extreme capacity and gigabytes-per-second speeds
  • ultra-reliable and low-latency communications (uRLLC): for mission-critical control applications
  • massive machine-type communications (mMTC): to support high-density, low-complexity, and low-energy IoT devices

Figure 2: Main categories of 5G use cases

Figure 2: Main categories of 5G use cases

Qualcomm argued that LTE (and its more recent iterations, LTE-A and LTE-A Pro) provides a strong foundation to deploy 5G. It has also presented 3GPP's new OFDM-based wireless standard G New Radio (NR), which will underpin the next generation of mobile networks to support different use cases.

Nokia discussed the evolutionary steps leading to 5G, with 4.5G (LTE-A Pro) and 4.9G (pre-5G) offering increasing bandwidth, support for a growing number of devices per site, and decreasing latency, while spectrum bands pool will be greatly expanded from sub-500MHz to tens of gigahertz.

Huawei discussed the technical innovations that it has introduced and the trials that it has run with China Mobile, NTT DoCoMo, T-Mobile, and Vodafone, and argued that the Middle East region offers a strong case to deploy 5G thanks to the high level of data consumption, among other things. However, operators will need more spectrum, improved spectrum efficiency and an increase in the number of sites deployed to be able to support future data growth. In addition, Huawei recommended that telecoms regulators should allow a service-neutral approach to reusing existing spectrum , as well as making available additional spectrum in the 3.4GHz–3.6GHz and the 39GHz bands.

Operators must plan a multi-phased approach to deploying 5G to maximise the opportunity and minimise the risks

Spectrum availability is a crucial precondition for help with pilot projects, trials and pre-standards deployment. We understand that telecoms regulators in the region have only started to assess the implications of 5G in terms of spectrum requirements. However, discussions on the identification of additional bands will probably take place during the ITU World Radio Conference in 2019 (WRC-19). In the current conditions, it is difficult to ascertain that a successful launch will happen by 2020 even in the UAE, given the significant co-ordination required before equipment becomes available and operators can roll out networks and launch services.

Revenue potential for the main use case remains uncertain. For instance, 4.5G speeds and capacity will probably be sufficient for most handset and tablet users in the short-to-medium term. The case of 5G for massive IoT communications will be challenging because requirements are diverse and current solutions (for example, Sigfox as well as 2G, 3G and 4G) are well suited. The ultra-reliable high-performance use case looks furthest out and is hardest to predict, but this is perhaps the only use case that exploits the unique capabilities of 5G performance.

As a result, we believe that operators must get involved in the standardisation debate and plan a multi-phased approach to deploying 5G in order to maximise the opportunity and minimise the risks and costs associated with this migration. They can start by investing in key enablers of 5G such as virtualisation and site density.

1 A fourth use case of fixed wireless is led by Verizon. For more information, see Analysys Mason’s 5G viability requires operators to share cross-platform resources.
2 Currently, it is shared between fixed wireless access (e.g. 2.3GHz, 2.6GHz,3.5GHz) and mobile broadband (e.g. 2.1GHz, 2.6GHz) in countries such as Bahrain, Kuwait and Saudi Arabia.