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Africa and Middle East to reach 18m LTE users by end of 2015
13 December 2011
Demand for LTE services in the Middle East is just starting and Africa will follow in 2012. After that, writes James Bennett, growth rates will outstrip those for LTE in the rest of the world
Africa will have more than 11 million LTE customers by
Africa market share by spectrum and transmission type in
The Middle East will have nearly 7.5 million LTE customers by
Middle East market share by spectrum and transmission type in
LTE is rapidly gaining momentum in the Middle Eastern region.
LTE subscriptions will grow at an average annual growth rate of
197%, with subscriptions already expected to reach 110,000 by
the fourth quarter of 2011, according to research by SNS
Global LTE subscriptions are racing ahead of initial
expectations. They have already passed 3.7 million in the third
quarter of 2011, spanning over 36 worldwide networks.
There have been commercial network launches in Saudi Arabia -
from Zain Saudi, STC, Mobily - and the UAE, from Etisalat, in
September 2011, and over 26 LTE commitments. As a result the
Middle East has initiated a major push towards commercial LTE
adoption, besides pioneering in the commercial release of
TD-LTE user devices.
Like many Middle Eastern markets, both Saudi Arabia and the UAE
are sparsely populated outside of the major cities, and
operators are unlikely to deploy fibre infrastructure from
broadband beyond major urban and industrial areas as economic
activity is typically highly concentrated in these
Rural broadband services
Connecting remote areas using fixed broadband technologies such
as DSL or fibre will be prohibitively expensive and will have a
very low return on investment. However, technologies such as
LTE could serve as a relatively cost-efficient option to deploy
high-speed broadband services to smaller towns and villages
across the country, which operators attribute as the major
reason to early LTE adoption both the countries.
By the fourth quarter of 2011, it is expected that there will
be over 6.6 million LTE subscriptions worldwide, with the
Middle East region accounting for a 1.7 % market share with
over 0.11 million.
With commercial LTE launches by all three major incumbents,
Saudi Arabia is not only leading LTE adoption within the Middle
East, but it is also pioneering TD-LTE adoption globally by
becoming the first country to commercially offer TD-LTE user
Driven by early deployments, attractive free trial packages
such as those offered by Saudi Arabia's STC, bundled 3G/LTE
pricing models, and the increasing demand for high-speed mobile
broadband access in rural locations, Saudi Arabia will lead LTE
subscriptions throughout the region with over 70,000
subscriptions by the fourth quarter of 2011 and over 0.39
million by the fourth quarter of 2012, representing a
year-on-year growth of 457%.
By 2015, Saudi Arabia is expected to account for over 5.44
million subscriptions representing a compound annual growth
rate of 197%, a figure that is much higher that the worldwide
CAGR of LTE adoption at 180%. Worldwide there will be 410
million LTE customers by 2015.
Etisalat commercial launch
The UAE is also likely to follow suit, with commercial LTE
devices for Etisalat expected to be launched in December 2011,
following a pre-commercial network release in September. Rival
operator Du is also expected to commercial launch its LTE
network in due course, leading UAE's LTE subscriptions to hit
40,000 by the first quarter of 2012.
From a spectrum perspective - although the 2.3 gigahertz TDD
spectrum is likely to retain the highest market share, driven
by Saudi network deployments - re-farming is also expected by
2013, which will make 1800 megahertz the most sought after
Meanwhile LTE deployments in Africa are also gaining momentum.
While no commercial network deployments are presently in place,
a number of prominent operators have begun trialling LTE
technology. Among these are three operators in Egypt -
Vodafone, Etisalat Misr and ECMS - plus three in South Africa -
MTN, Cell C and Vodacom - as well as Globacom in Nigeria.
As the operator-preferred 2.6 gigahertz band has not yet been
auctioned in most countries, a number of operators have
deployed their initial trial networks at 1800 megahertz, such
as the MTN South Africa trial network.
Vodacom and MTN are expected to carry out early commercial
launches before the second quarter of 2012, taking African LTE
subscriptions to 0.35 million by the end of 2012.
By 2015, it is estimated that the Middle East will account for
7.49 million LTE subscriptions, while Africa will account for
11.15 million subscriptions, representing global market shares
of 1.8% and 2.7% respectively.
While LTE is gaining a much quicker uptake than initial analyst
predictions, there still exist a number of unanswered questions
to the commercial success of LTE deployments in the Middle East
and Africa - such as the complexities in pricing plans, the
lack of the sub-spectrum below one gigahertz in the Middle
East, plus regulatory issues, as well as interoperability
between devices operating in different frequency bands.
The lack of spectrum below one gigahertz in particular is
likely to remain a major hurdle along the way to LTE rollouts.
Although the 2.3/2.6 gigahertz bands presently used in the
Middle East are widely backed by device manufacturers and
equipment suppliers, this band does not penetrate buildings as
effectively as spectrum in the lower frequency bands, which is
a considerable disadvantage.
Without sub-gigahertz spectrum, Middle Eastern operators will
struggle to offer true high-speed services in the areas of
greatest demand. In the UAE nearly three quarters of its mobile
traffic originates inside buildings. GTB
James Bennett is an analyst at Signals and Systems Telecom, a
market intelligence and consultancy firm. The results were
published as part of SNS Telecom's study: LTE in the Middle
East & Africa: Contracts, Operator Reviews, Spectrum
Strategies, Subscriptions, Pricing and Forecasts
or visit www.snstelecom.com
Further reading from Global Telecoms Business:
Smart offers LTE for beta testing in
Manila 29 Nov
Du to launch LTE in December
2011 06 Oct
Qatar Telecom launches LTE
project 05 Oct
Telkom unit set for South African
LTE 28 Oct