Adoption of the fifth generation of cellular technology (5G) will reach more than 45m or 6.3% of the total connections in the Middle East and North Africa (Mena) in 2025.
According to “The Mobile Economy: Middle East and North Africa 2019” and “Realising the potential of IoT in MENA” reports released by GSMA at Mobile 360 Mena event taking place in Dubai, 4G connections have surpassed 2G to become the second most dominant technology this year but it will attain 52% in 2025 compared to 26% in 2018.
GSMA represents the interests of 750 mobile operators worldwide and over 350 companies in the broader mobile ecosystem.
In the Gulf Cooperation Council (GCC) countries, 5G connections will 17% in 2025 but 4G will reach 74% of the connections compared to 41% of 4G in 2018.
John Giusti, Chief Regulatory Officer at GSMA, told TechRadar Middle East that 5G will be a more robust service than previous networks and will provide new use cases in industries such as smart cities and manufacturing.
“4G and 5G will operate in sync with each other for many years despite having different use cases. There is still a lot of growth potential in 4G,” he said.
About 25% of the 40 global 5G commercial deployments today are in the GCC, he said and added that 12 operators from five markets – Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE – have more than 12,000 live 5G sites with more than 600,000 connections.
4G growth will continue apace in the coming years and is on course to surpass 3G in Mena by 2021.
“4G adoption is being driven by coverage expansion and operator efforts to migrate 2G and 3G users to 4G networks. However, device affordability remains a concern for many consumers in low-income brackets,” the report said.
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Mobile to add $220b to economy
Mobile technologies and services added $191b to the region’s economy in 2018 – equivalent to about 4.5% of regional GDP.
By 2023, mobile’s economic contribution is forecast to reach more than $220b as countries increasingly benefit from the improvements in productivity and efficiency brought about by the increased uptake of mobile services, and 5G and IoT networks are widely deployed.
IoT connections in the region are growing at a rate second only to Asia-Pacific. They are forecast to be 470m IoT connections in the region by the end of 2019, rising to 1.1b by 2025.
By 2025, the region is forecast to account for around 4% of global IoT connections, growing at an annual rate of 16%.
The deployment of IoT is expected to add $18b to regional GDP by 2025.
“Backed by proactive government support, mobile operators, particularly in the GCC Arab States, have speedily deployed 5G technology,” said Mats Granryd, Director General of the GSMA.
Beyond the GCC, he said that the wider MENA region has an opportunity to benefit from the technological developments delivered by 5G and IoT.
In the UAE, the number of licensed cellular IoT connections will almost double to 4.36m in 2025 compared to 2.25m in 2018 while in Saudi Arabia, it is going to increase to 5.72m compared to 4m in 2018.
In Mena, licenced cellular IoT (connectivity options by operators for smart cities, utilities, retail and other verticals) accounted for 5% of total IoT connections in 2018; this will increase to 7% by 2025. The number of licensed cellular IoT connections in the region will grow to more than 70 million by 2025.
“To fully embrace those benefits the region’s governments must support regulatory frameworks and policies that ensure 5G flourishes, including making sufficient spectrum available,” he said.
Operator revenues to increase to $76b
In the Mena region, mobile subscribers will grow from 382m in 2018 to 459m in 2025, at an annual growth rate of 2.7% while SIM connections will increase from 632m in 2018 to 722m in 2025, at an annual growth rate of 1.9%.
The SIM card penetration rate will increase from 105% in 2018 to 109% in 2025.
The report said that operator revenues will increase by about 17% to $76b in 2025 compared to $65b in 2018.
By the end of 2018, nearly half of the 25 countries in the region had unique subscriber penetration rates of 70% or more. For context, the global average at the end of the same period was 66%.
In the more mature markets of the region, subscriber growth has slowed to below 2% annually. However, there are still significant growth opportunities in frontier markets in the region, where subscriber penetration rates remain below 50%.
On average, the region will record an annual growth rate of 2.7% between 2018 and 2025. Over the same period, the number of mobile internet users will grow at an annual growth rate of 5.4%, taking mobile internet penetration in the region above 50% for the first time.
Growth is primarily being driven by the migration of existing 2G subscribers to mobile broadband networks. The majority of new mobile users, especially those in younger demographics, are adopting 3G/4G from the outset.