The 5G race to innovation in the GCC

Read In

Gitex, the biggest technology exhibition of the Middle East enjoys its 39th edition this year. A week’s worth of networking, talks and announcements that takes place in Dubai, it is a hectic and rather overwhelming event that tires out an entire industry in the region.

Every year, particular themes and topics tend to dominate and this year, it was 5G that took centre stage. The latest in mobile telecoms infrastructure capability is this superspeed mobile internet offering, which offers a data capacity of 10 gigabits per second, 100 times faster than the current 4G capabilities. According to the US-based Consumer Technology Association, with 5G, you can download a two-hour movie in just 3.6 seconds, compared to 6 minutes on 4G and 26 hours on 3G.  

Such speeds mean better connectivity and lower latency, or as some in the industry like to call it: “real-time” level of connectivity.

“Connectivity and data transferring will be much faster. Right now, we have a lag,” says Ishita Sood, co-founder and chief operating officer at UAE-based WakeCap, which produces smart helmets for construction workers to relay their location, working hours and safety back to site managers. “It is like if you’re on a phone call and there is a lag, it creates lot of overlap and data is not transported properly. What we try to do is improve safety and productivity and even if there is a lag of a few minutes, a person’s life can be at risk.”

The fanfare that surrounded the launch of 4G a few years ago in the region was similar. At the time, the telecoms operators lauded the unprecedented mobile internet speeds, which they claimed had the potential to change entire economies. And they were right. Mobile internet penetration soared in the Middle East and the cost of data fell from an average of $9.50 for half a gigabyte in 2016 to $5.27 for double the amount of data in 2018. Soon after its launch, 4G had the ability to democratise access to the internet, giving a voice to the millions in the region who now are among the most active on social media. By bringing more people online, it created a market and environment for consumer technologies like ride-hailing apps and e-commerce sites to grow and succeed.

For 5G, the scale of change is likely to be even more acute. The technology has been deemed a necessity to enable the innovations of the future like autonomous vehicles, robotics and artificial intelligence (AI).  

“5G today has opened up a world of opportunities for operators spurring innovation across many industries to provide a platform enabling emergent technologies to become an integral part of our economy and lifestyle,” says Saleh Abdullah Al Abdooli, chief executive officer at Etisalat Group.

For Etisalat, its 5G plans began in 2014 and in May this year in the UAE, it became the first telecoms operator in the Middle East to launch a commercial 5G network. The operator has connected Expo 2020 Dubai to its 5G network with plans to showcase the technology and its capabilities to the rest of the world.  

National Agendas

Several governments, particularly in the GCC, have introduced ambitious economic plans designed to diversify their economies away from oil. Saudi Arabia’s Vision 2030 and the UAE’s Vision 2021 both seek to utilise technology to develop knowledge-based economies that improve public services.

Data is at the heart of the knowledge economy and to enable the transfer and processing of larger amounts at higher speeds can create new use-cases and applications. Having robust internet infrastructure is necessary for seamless virtual reality and augmented reality applications and real-time cloud computing to enable use-cases like remote surgery via robotics, using instruments delivered by drones.

A report from UK-based Analysys Mason estimates that 5G could generate cumulative new revenue opportunity of $273 billion over 10 years for the GCC. There is a sense, particularly from the state-owned telecoms operators in these countries that the adoption of 5G will advance these plans and provide opportunities for innovation. Even if the technology is produced elsewhere, with adoption, it can spur on local innovation. At least that seems to be the intention.

“5G is gaining strong momentum in its commercial adoption,” says Hani Sobih ElKukhun, vice president of strategy at Huawei Middle East. “We have seen industries starting to embrace 5G, with it exploding into prominence by improving efficiency in many industries. By adding AI capabilities to the next generation of ICT products, AI also becomes more readily available for different fields of scientific research and business innovation. The combination will deliver more intelligence across every touchpoint of the digital economy.”

According to Sweden-based Ericsson's Mobility Report, there will be 30 million 5G mobile subscriptions in the Middle East and Africa by 2024 while mobile data traffic here is expected to have the highest growth rate in the world.

A Political Choice

Globally, it is Huawei that has pioneered the technology behind 5G, the company has ploughed $2 billion into 5G research and development and has already signed partnerships with Saudi Telecom Company (STC), VIVA Bahrain and Etisalat. But at Gitex, the European and US players including Ericsson, Cisco and Nokia were keen to demonstrate their own capabilities, taking advantage of the US’ current animosity toward the Chinese player.

The adoption of 5G infrastructure has become a politicised affair. With allegations of intellectual property theft and espionage, Huawei has been branded a commercial arm of the Chinese government, claims the company strongly denies.

“It is likely to be politicised, but it has always been political, it was the same with 2G, 3G and 4G,” says Michael Sutcliff, group chief executive at US-based Accenture Digital. “Rolling out the network for 5G capacity, historically, there have always been at least three or four major and players and Ericsson certainly intends to be a major player in the space.”

But while the GCC has the means to build such infrastructure, the rest of the Middle East is not quite on par. Some countries like Iraq are still on 3G, Egypt, the region’s most populous country, launched 4G only two years ago.

“In less advanced MEA markets, it might take some time to develop the business case for 5G,” writes Matthew Reed, practice leader at Ovum Middle East and Africa. “The regulatory preparation – such as the allocation of spectrum – could take time too.”

Nor is it seen as such a necessity by everyone, especially with the current lack of 5G-ready devices. 

“For a business like ours, already the speed of service in the market is good enough,” says Claudio Esposito-Aiardo, founder and chief executive officer at UAE-based Carasti, a subscriptions-based car rental app. “Where it will add value is maybe we will be able to incorporate more video content on our app, because it will load faster.”

Ultimately, for 5G to succeed and bear fruit, it requires a more collaborative approach.

“Operators alone are not enough to deliver the 5G end-user experience, the whole ecosystem needs to work together, between operators and other parties, to build the new business models,” says Ahmed Auda, managing director of VMware Middle East. “They have to work together, at the same pace, to leverage the technology.”

Read In

Countries

Share

Related Articles