LTE in the Middle East and North Africa: status and prospects

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1 Research Viewpoint LTE in the Middle East and North Africa: status and prospects August 2014 Karim Yaici and Chris Nicoll

2 2 About this report This report analyses the status of LTE deployments and operators LTE strategies in the Middle East and North Africa (MENA) region. The report provides: details of the status of LTE network roll-outs, plans and spectrum allocated in MENA, with analysis of trends, drivers and inhibitors for the adoption of LTE detailed discussion of the different strategies that operators can adopt to monetise LTE services and the options available for pricing and packaging LTE services. We will present examples from MENA as well as best practices from more-mature LTE markets a 5-year forecast of LTE connections, revenue and data traffic, and LTE s share of these KPIs in the MENA region key implications and recommendations for mobile operators with existing LTE deployments and those considering the transition to LTE. This report draws on Analysys Mason s core forecasts for MENA 1, Wireless network tracker and Spectrum auction tracker. 1 For further details, see The Middle East and North Africa telecoms market: 2014 interim forecast update Available at Figure 1: Summary of report coverage [Source: Analysys Mason, 2014] Geographical coverage Regions modelled: Middle East and North Africa Countries modelled: Algeria Egypt Israel Kuwait Morocco Qatar Saudi Arabia UAE Major KPIs Forecasts are provided for LTE s share of the following mobile market metrics up to 2018: Handset connections (both regional and country level) Broadband connections Service revenue Handset data traffic Broadband data traffic LTE operators discussed in this report Alfa Algérie Télécom Batelco Cellcom du Etisalat Menatelecom Mobily Nawras Omantel Ooredoo Orange Pelephone Regional Telecom Saudi Telecom Company (STC) Touch (Zain) VIVA Vodafone Zain

3 Number of LTE networks LTE in the Middle East and North Africa: status and prospects FD-LTE over 1800MHz is the most common configuration in MENA, but operators are also seeking to use sub-1ghz digital dividend spectrum 1800MHz is the most frequently used band for LTE across the region (see Figure 5). It offers a good balance between coverage and throughput, provides the ability to reuse assets from 2G and 3G, and has a large device ecosystem. FD-LTE has emerged as the most widely adopted technology in MENA, representing 85% of current operational LTE networks, up from 53% in September LTE offers better spectral efficiency than previous network technologies, with the ability to refarm spectrum assets. For example, Mobily and STC complemented their TD-LTE network in 2013 with FD-LTE on refarmed 1800MHz spectrum bands. However, demand for additional spectrum will continue to grow. As in other regions, the digital dividend spectrum bands (700/800MHz), which can be employed for LTE, are still used in MENA by the military, broadcasters or operators for 2G or 3G networks. MEA countries agreed at WRC-12 to co-allocate spectrum between mobile and broadcasting in the 700MHz band, which could be made available by regulators before See Analysys Mason s LTE roll-out in the Middle East and North Africa: status and prospects. Available at 2 DigiTAG (Geneva, Switzerland, 2012), WRC-12: allocating terrestrial frequencies to mobile services. Available at Figure 5: LTE networks by frequency band, Middle East and North Africa, August 2014 [Source: Analysys Mason, 2014] MHz 1800MHz 2.3GHz 2.6GHz 3.5GHz The regulator in the UAE (the TRA) was the first in ITU Region 1 (which includes Europe and MEA regions) to announce its intention to use both 700MHz and 800MHz bands for mobile broadband in The TRA is working with broadcasters to clear the 700MHz band and make it available for mobile services in Regulators in other countries have yet to specify a timeline for the release of this spectrum. Operators will need to lobby the regulators to speed up the implementation process and free up the 700MHz spectrum.

4 28 About the authors Karim Yaici (Analyst) is a lead analyst for Analysys Mason s The Middle East and Africa regional research programme. His primary areas of specialisation include operator strategies, telecoms market developments and consumer trends in MEA. He is also a regular speaker and moderator at regional telecoms events. Prior to joining Analysys Mason, Karim was an associate analyst at Informa Telecoms & Media, where he authored reports on mobile accessories and mobile applications. Earlier in his career, he worked as a research engineer in the Centre for Communication Systems Research (CCSR) and Vodafone. Karim holds an MSc in Information Systems Management from the University of Southampton and a PhD in human computer interaction from the University of Surrey. Chris Nicoll (Principal Analyst) is the lead analyst for Analysys Mason s Wireless Networks and Spectrum research programmes. His primary areas of specialisation include wireless access technologies, wireless traffic forecasting, mobile infrastructure and operator strategy. Chris has more than 20 years of expertise as a leader in defining telecoms strategy. Prior to joining Analysys Mason, Chris held Principal Analyst positions at ACG Research and Nicoll Consulting, where he developed marketing strategy and positioning for leading telecoms operators. At Yankee Group, Chris was a member of the Yankee Group Research Council and provided thought leadership to the research organisation. At Lucent and Alcatel-Lucent, Chris was director of strategic marketing, overseeing the company s corporate positioning and messaging, including public affairs and analyst relations. Chris also led the Telecom Infrastructure team at Current Analysis, where he developed a global analyst team, as well as oversaw consulting engagements and managed client relationships. Chris has also held marketing and network engineering positions at Netrix, Tymnet and Visual Networks. Chris holds a BS in Communications with minors in Computer Science, Psychology and Marketing from Florida State University.

5 29 About Analysys Mason Knowing what s going on is one thing. Understanding how to take advantage of events is quite another. Our ability to understand the complex workings of telecoms, media and technology (TMT) industries and draw practical conclusions, based on the specialist knowledge of our people, is what sets Analysys Mason apart. We deliver our key services via two channels: consulting and research. Consulting Our focus is exclusively on TMT. We support multi-billion dollar investments, advise clients on regulatory matters, provide spectrum valuation and auction support, and advise on operational performance, business planning and strategy. We have developed rigorous methodologies that deliver tangible results for clients around the world. For more information, please visit Research We analyse, track and forecast the different services accessed by consumers and enterprises, as well as the software, infrastructure and technology delivering those services. Research clients benefit from regular and timely intelligence in addition to direct access to our team of expert analysts. Our dedicated Custom Research team undertakes specialised and bespoke projects for clients. For more information, please visit

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