Complex Made Simple

Interview: 5G is a revolution; a paradigm shift in technology

5G will unleash a whole new wave of creativity and innovation in the region. Jawad Abbassi, Head of MENA, Global system for Mobile Communications (GSMA), the international body that represents the interests of mobile network operators worldwide, talks to AME Info

5G is now a reality in UAE and the technology will play a key role in enabling a host of services for consumers and enterprises, including smart city solutions The region is growing and there are plenty of untapped opportunities here It is predicted that there will be 470 million IoT connections in MENA by the end of 2019, rising to 1.1 billion by 2025

How much have mobile technologies contributed to the region’s economic growth and development? How is the 5G landscape shaping up?

Mobile technologies and services added $191 billion to the region’s economy in 2018 – equivalent to about 4.5 per cent of regional GDP.  By 2023, the mobile’s economic contribution is predicted to reach more than $220 billion, as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased uptake of mobile services, and as 5G and IoT networks are widely deployed. 5G is a revolution, it is a paradigm shift in technology and it offers three main features: extra low latency compared to 4G and 3G, much higher speeds and network slicing which means you can tailor the network type based on the end user.  

To date 12 operators have launched commercial 5G services in five GCC States. Meanwhile, IoT connections in the MENA region are growing at a rate second only to Asia-Pacific. It is predicted that there will be 470 million IoT connections in MENA by the end of 2019, rising to 1.1 billion by 2025. The deployment of IoT across MENA is expected to add $18 billion to regional GDP by 2025.

In fact, commercial 5G networks have become a reality in MENA. GCC Arab States remain regional leaders, but 5G-related activities are ongoing in other countries too. In October 2019, Ooredoo Tunisia announced that Nokia will deploy the Nokia AirGile cloud-native core and services to power its current 2G/3G/4G networks in order to prepare for the transition to 5G. – At the same time, Turkcell and Ericsson signed an MoU on the development of new 5G-related use cases that will emerge across industries on the operator’s network. These are just a few examples. The region is growing and there are plenty of untapped opportunities here.

Read: Ericsson Mobility Report: 5G subscriptions to top 2.6 billion by end of 2025 

How about the UAE, in particular? How is the 5G revolution playing out here?

5G is now a reality in UAE and the technology will play a key role in enabling a host of services for consumers and enterprises, including smart city solutions.  Also, Capex in 2019 by Etisalat and Du reflect 5G network investments; the operators will have around 1,800 5G sites between them by the end of the year. In the 2020s, there will be greater investments in 5G network expansion, but the challenge for operators will be to develop 5G use cases beyond basic connectivity. The important thing to remember is that in the UAE in particular, the impact of 5G on mobile revenues in the short term is not certain: early indications suggest similar tariffs for 5G and 4G services. Then again, with little or no premium for basic 5G tariffs, operators will increasingly explore digital service offerings to mitigate pressure on revenues.

Read: Etisalat to make 5G dream a reality in the UAE

What are some of the challenges that you see in this region?

The main challenge is that the market is a very diverse one. We have countries in the region that are not very developed, some that are highly advanced, some countries where people are covered by mobile and broadband networks but don’t have access to it, poor countries, middle income countries-so the needs and infrastructure are very, very different. In fact, there are countries where rural areas still have only 2G! This is one of the biggest challenges-the lack of uniformity and consistency, and this makes technology implementation difficult and a huge challenge.

Another important fact we should consider is that players from a range of backgrounds, including telecoms, IT, device manufacturing and systems integration, are all vying to capture a portion of the market opportunity. Although connectivity revenue will grow, representing an opportunity for mobile operators in particular, it will account for just 5% of total IoT revenue by 2025. For this reason, regional operators have been expanding their capabilities beyond connectivity to capture a larger proportion of the overall market value. However, the IoT ecosystem is complex and fragmented and the boundaries between traditional technology, IT and OTT players are blurring as new business models emerge around data, analytics and services. This makes it difficult for any single company to provide end-to-end solutions.