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Summary

The most advanced markets in the Middle East now expect to see 5G launches as early as the end of 2018, but ideas about how to use and commercialize the new technology are still tentative, revealed discussions at the 5G MENA 2018 conference, which was put on in Dubai earlier this month by Ovum's sister company, KNect365.

5G is coming to the Middle East soon but use cases are still on the drawing board

STC, the biggest operator in Saudi Arabia, as well as the UAE's two operators, Etisalat and Du, have all recently unveiled plans to launch 5G by the end of this year, earlier than the previously expected launch dates of 2019 or 2020.

In part, STC is moving ahead with 5G because it is in a financial position to make the necessary investment, said Sacha Dudler, general manager of corporate development at STC, at the 5G MENA conference. And STC believes it can maintain profitability despite the spending on 5G, while also making improvements in network efficiency, Dudler added. Also significant is that it is part of STC's strategy to support Saudi Arabia's ambitious national economic development plans, particularly those linked to boosting the country's technology sector.

When STC launches 5G at the end of 2018, it will initially focus on promoting consumer applications for the new technology, such as gaming and sports broadcasting, said Dudler. STC recently acquired the broadcast rights to Saudi Arabia's domestic football league, and to games played by the Saudi Arabia national football team. STC is also investigating enterprise market applications for 5G.

Technology-led development is a priority in the UAE too, and the strategies of the state and of the local operators, Etisalat and Du, overlap. Dubai Pulse, an open data portal that Du recently set up for the Dubai government, is well suited to 5G, according to Du's chief infrastructure officer, Saleem Al-Balooshi. Generally, 5G deployment and coverage will be based on specific use cases, while 4G will continue to provide wide mobile broadband coverage, said Al-Balooshi.

In Kuwait, the development of the fixed broadband sector has been held back by state ownership and the country's mobile operators are dealing with among the highest levels of data traffic in the world, said Viva Kuwait's chief technology officer, Zarrar Khan. As a result, there is a practical imperative for introducing 5G, to boost network capacity. Viva looks set to launch 5G in 2019, initially to provide enhanced mobile broadband connectivity.

Turkcell has successfully implemented a new digital strategy over the past couple of years, and 5G will create further opportunities in sectors such as transport and health, said Aysem Ertopuz, assistant general manager for digital services and partnerships at the Turkish operator.

But other speakers were skeptical about the idea that 5G will enable new services and create additional revenue. Alaa Zaher, head of strategy and innovation at Vodafone Egypt, said that the focus should not be on 5G, but on the role of the operator. If operators cannot create new services and revenues in areas such as content or IoT with current technology – 4G in most cases – then they probably won't be able to do that with 5G, said Zaher.

Yousef Abu Mutawe, chief commercial officer at Zain Jordan, said that the main use cases for 5G will be in industry – but much of the Middle East does not have the kind of industrial sectors that are suited to 5G.

And a speaker from Du conceded in a panel discussion that it is not clear how 5G will produce additional revenue for operators, and that the issue remains a challenge.

Although the first 5G launches in the Middle East will take place in just a few months' time, talks at the conference indicated that the applications and business cases for 5G in the region are still on the drawing board.

Appendix

Further reading

5G Service Provider Tracker: 1Q18, GLB007-000055 (April 2018)

Middle East Market Outlook, 1Q18, GLB002-000009 (December 2017)

Author

Matthew Reed, Practice Leader, Middle East and Africa

matthew.reed@ovum.com

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