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Middle East Mobile Operators Will Be 5G Early Adopters, According to New GSMA Report

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The GSMA today published a new report, titled The Mobile Economy: Middle East and North Africa 2017 , highlighting that operators in the Middle East and North African (MENA) region1 will be amongst the first in the world to launch commercial 5G networks. The new study, which was published at the GSMA Mobile 360 Series – MENA conference in Dubai, forecasts that there will be more than 50 million 5G connections across the MENA region by 2025, with 5G networks covering approximately 30 per cent of the region’s population by that point. The report also highlights how mobile broadband (3G/4G) networks account for about half of total mobile connections in the MENA region today and are forecast to increase to 70 per cent of the total by the end of the decade2.

“With rising mobile broadband adoption, growing subscriber numbers and increasing smartphone use, mobile is having an incredible impact across this diverse region, ushering in an era of innovative tech startups and new mobile services, as well as helping to connect the unconnected,” said Mats Granryd, Director General, GSMA. “At the same time, we urge operators to continue investment in 4G networks to ensure future growth and encourage governments to set policies that promote technological, social and economic progress to create a society where all citizens can benefit from mobile technology.”

Fast 5G Adoption

The Gulf Cooperation Council (GCC) states3 will be amongst the first in the world to launch commercial 5G networks. High 4G adoption rates and government support is helping leading operators to challenge both North American and Asian operators in driving 5G development. Both Etisalat and Ooredoo are already undertaking live 5G trials on speed, equipment, latency and beam steering, with commercial launches expected in 2020. The early launches are expected to be based on 3GPP Release 15 and be deployed in dense urban areas as mobile operators look to offer increased performance and supplement existing mobile broadband capacity. Further enhancements will be made with 3GPP Release 16, including the development of massive IoT and critical communication services.

Smartphone Adoption, Subscriber And Revenue Growth

There were 365 million unique subscribers4 across the region at the end of 2016, accounting for 63 per cent of the population, which is expected to rise to 399 million or 65 per cent by 2020. However, subscriber growth continues to trail the global average due to the diversity of the region, with the more advanced markets approaching saturation and the less developed markets facing the challenge of growing penetration. As a result, subscriber penetration will reach only 65 per cent by 2020, below the global average of 72 per cent. Smartphone adoption is expected to increase to an estimated 463 million by 2020, representing growth of 167 million from the end of 2016.

A Diverse Regional Landscape

The report highlights that there are significant variations in mobile market maturity between the different countries across the region. In the GCC States, 76 per cent of the population are mobile subscribers, with three of these markets (Bahrain, Kuwait and the UAE) having a subscriber penetration rate of 90 per cent or above, placing them among the most penetrated mobile countries in the world. By contrast, North Africa5 has an average subscriber penetration rate of 67 per cent, and across the Other Arab States6, penetration stands at 46 per cent, including three markets where less than a third of the population subscribe to mobile services (Comoros, Djibouti and Somalia).

Mobile Contributing To Employment and Economic Growth

In 2016, the mobile industry contributed more than $165 billion to the regional economy, or 4.2 per cent of GDP. This is expected to increase to almost $200 billion (4.3 per cent of GDP) as countries in the region benefit from improvements in productivity and efficiency brought about by increased take-up of mobile services. The mobile ecosystem also supported more than 1 million jobs in 2016. This includes workers directly employed in the ecosystem and jobs that are indirectly supported by the economic activity generated by the sector. MENA’s mobile industry also makes a substantial contribution to the funding of the public sector with $20 billion raised in 2016 through taxation.

Mobile Driving Engagement and Innovation Across Region

The study highlights that, due to the huge rise in smartphone adoption across the region, a wide array of mobile services are being consumed, such as video, social media, e-commerce and financial services. In a number of markets across the region, mobile has become the platform of choice for creating new digital solutions, such as smart city services, which are helping to address challenges around urbanisation, pollution and resource management. Mobile operators in the region are also collaborating with tech startups to help build innovative and sustainable mobile services as well as deliver socioeconomic impact.

Mobile Addressing Social Challenges

The report also highlights how mobile is playing a key role in tackling various social and economic challenges as outlined by the UN Sustainable Development Goals (SDGs), including poverty, education and employment amongst others. Mobile internet penetration has doubled across the region over the last six years, reaching just under 40 per cent of the population or 228 million subscribers by mid-2017. However, there remains a digital divide remains in many parts of MENA, where there are still 350 million people without access to the mobile internet and challenges such as infrastructure, affordability, consumer readiness and the availability of locally relevant content. If these are properly addressed, an additional 67 million people will be able to gain access to the mobile internet by the end of the decade, bringing the total to just under 300 million, or 48 per cent of the population. The report also highlights that mobile is helping to provide financial services for the unbanked, with 24 live services in 9 countries as of December 2016.

To access the full report and related infographics please visit: https://www.gsma.com/mobileeconomy/mena/

-ENDS-

Notes to Editors

1. The 25 markets classed as Middle East and North Africa are Algeria, Bahrain, Comoros, Djibouti, Egypt, Iran, Iraq, Israel, Jordan, Kuwait, Lebanon, Libya, Mauritania, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Somalia, Sudan, Syria, Tunisia, Turkey, UAE and Yemen.

2. Total mobile connections (active SIM cards, excluding M2M) in MENA stood at 639 million in 2016, forecast to rise to 712 million by 2020.

3. GCC States: Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and UAE

4. Total Mobile subscribers was 360 million in 2016 forecast to rise to 399 million by 2020 (65% penetration rate) and a CAGR: 2.6%

5. North Africa: Algeria, Egypt, Libya, Mauritania, Morocco and Tunisia.

6. Other Arab States: Comoros, Djibouti, Iraq, Jordan, Lebanon, Palestine, Somalia, Sudan, Syria and Yemen

About the GSMA

The GSMA represents the interests of mobile operators worldwide, uniting nearly 800 operators with more than 300 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors. The GSMA also produces industry-leading events such as Mobile World Congress, Mobile World Congress Shanghai, Mobile World Congress Americas and the Mobile 360 Series of conferences.

For more information, please visit the GSMA corporate website at www.gsma.com. Follow the GSMA on Twitter: @GSMA.

Contact information

For the GSMA
Asad Abbasi
+971 52 861 4230
AAbbasi@webershandwick.com
or
GSMA Press Office
mobile360pressoffice@gsma.com

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