Oil-rich gulf states have been among the first nations in the world to launch fully-functional 5G networks. With huge government support, operators in the region have rolled out the technical infrastructure and have started offering consumers 5G mobile data packages.
Gulf markets Saudi Arabia, United Arab Emirates, Qatar, Bahrain and Oman, known collectively as the Gulf Co-operation Council countries, have beaten the rest of the world to 5G, launching services through ten operators.
Matthew Reed, telecoms analyst at Omdia, says GCC markets are well placed for successful take up of 5G: “The GCC markets are quite advanced by global standards in the telecoms sector and previous versions of mobile broadband have had good take up. They are relatively affluent markets, there is a good rate at which people upgrade to the latest smartphones and devices, there are good disposable incomes and demand for broadband mobile is high.”
Next generation technology crucial to oil and gas
These states see 5G as crucial to their economic development as fossil fuels are replaced by renewable energy and their huge oil and gas incomes dwindle. Gulf nations are looking to re-invent themselves as hi-tech economies at the forefront of automation, Internet of Things development, smart city innovation and autonomous vehicles. Forging ahead with 5G will help give them a head start over other economies, they believe, and strong consumer take up of the new generation services is vital for boosting mobile video, entertainment and virtual and augmented reality services.
Saudi Arabia has put in place its Vision 2030 economic strategy with a view to boosting the technology sector and is planning to use 5G to support 45 million internet of things devices, creating a market worth $12bn, according to Saudi Arabia’s Ministry of Communications and Information Technology.
5G will enable the spread of robotics and automation in the still crucial oil and gas industries, which are being rapidly transformed through the 4th industrial revolution technology. Delivering data speeds dozens of time faster than 4G and with low latency, 5G will allow for greater use of drones to check pipelines and robots to work on the oil supply infrastructure.
But setting up 5G early also has drawbacks as it means the infrastructure equipment is more expensive than it would be a few years down the line. There is also a dearth of 5G-enabled devices on the market, which is holding back take-up by consumers and enterprises. Meanwhile, the Coronavirus lockdowns in these states has delayed the roll out of 5G masts as staff have been forced to stay at home and the economic shock has led to many people being laid off – which for the large foreign workforce means they have to return to their home countries as their work visas run out. This has dented take up of 5G contracts.
One bright spot is Apple’s launch this autumn of the 5G-enabled iPhone 12 which could signal faster take-up of the ultra-fast mobile technology as these markets which are heavily skewed towards Apple products.
One of the big uses of 5G in the region is for mobile broadband, according to Omdia’s Reed, as in areas including parts of Saudi Arabia, fixed line connections are scarce. In UAE, subscribers to operator Etisalat have recently been offer super-fast 5G fixed networks from their homes, allowing streaming of 4K videos, cloud-based gaming and the possibility of immersive augmented and virtual reality technologies.
Omdia estimates that at the end of June 2020, there were 586,000 mobile 5G subscriptions across the middle east, mainly in the gulf markets. By end of 2025 it estimates there will be 64.5 million mobile 5G subscriptions out of a total of 391.6 million in the region, about one fifth.
First adopters
Omdia’s Reed says gulf markets tend to be at the forefront in deployment and adoption of new technologies though are rarely the innovators. “The innovation in the region tends to come from some of the markets where there are bigger challenges. Jordan and Egypt are the markets where there is more an innovative economy with start-ups, but when they want to commercialise those ideas that tends to happen in the UAE, because they are wealthier markets for consumer and businesses and perhaps because there is a more receptive environment,” he says.
He adds that 5G is expected to launch in North African markets such as Egypt, Algeria, Morocco and Libya in 2022, though launches in Israel and Turkey are expected next year.
Huawei is a big player in Middle East and Africa. Most of the major operators work with Huawei, but they have a multi-vendor strategy and work with Nokia and Ericsson as their network suppliers.
Qatar’s national telecoms operator Ooredoo claims that the nation was the first in the world to launch a 5G network. The company is encouraging subscribers to move on to 5G phone models and revealed in March that more than 100,000 mobile customers had signed up for its Shahry 5G and Qatarna 5G plans, though did not give figures on how many of the subscribers own a 5G phone.
Ooredoo director Thani Al Malki, who is part of the 5G launch team, says the company has reached 90% 5G coverage in populated areas, offering speeds of up to 4.2Gbps. This compares to speeds at the very highest of 100Mbps through 4G services.
Ooredoo has signed a contract with Qatar’s Ministry of Transport and Communications to work on the TASMU project, an initiative designed to facilitate and accelerate work on Qatar's National Vision 2030 which aims to turn the country in to a technology hub. Al Malki says: “As part of the drive to be among the world's first smart country, we have also signed with Microsoft to bring cloud services to Qatar, the largest such service in the region. Ooredoo continues to work to keep up with the latest technology and bring it to Qatar.” And he adds: “Hopes have grown that the technology will contribute to the development of the IoT and IoT applications such as smart cars, virtual reality and drones.”
The FIFA World Cup football tournament in Qatar planned for 2022 may be a turning point in the use and uptake of 5G. This promises to showcase the Gulf’s advances in 5G technology to the whole world.
Gulf countries, which have led the world in oil and gas production for so long, are vying to become global leaders in 5G technology.