A 5G network promises an internet speed of up to 1.2 gigabits per second which will gradually evolve to reach 10Gbps. AFP
A 5G network promises an internet speed of up to 1.2 gigabits per second which will gradually evolve to reach 10Gbps. AFP
A 5G network promises an internet speed of up to 1.2 gigabits per second which will gradually evolve to reach 10Gbps. AFP
A 5G network promises an internet speed of up to 1.2 gigabits per second which will gradually evolve to reach 10Gbps. AFP

GCC to have the second-highest number of 5G mobile subscribers by 2026


Alkesh Sharma
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5G users will account for 73 per cent of all mobile subscriptions in the Gulf region within the next five years, the second-highest in the world after North America where the adoption rate will be 84 per cent, according to Swedish telecoms firm Ericsson.

Western Europe will trail the Gulf with 69 per cent of its users using 5G, followed by North East Asia at 65 per cent and Latin America at 34 per cent, Ericsson said in its biannual mobility study on Monday.

The Gulf region will have 62 million 5G mobile subscribers by 2026 and is emerging as one of the most “diverse and advanced” markets in the adoption of fifth-generation cellular wireless networks, Zoran Lazarevic, Ericsson's chief technology officer for the Middle East and Africa region said at a media roundtable on Monday.

A 5G network has an internet speed of up to 1.2 gigabits per second, which will gradually evolve to 10Gbps – more than 100 times faster than 4G. Moreover, 5G has a latency of less than one millisecond, compared to 20 milliseconds for the 4G network. That allows for better quality and higher resolution video calls as well as downloads that are delivered faster to smartphones and tablets.

Ericsson said availability of economical 5G-enabled smartphones is propelling the industry's growth. Bloomberg
Ericsson said availability of economical 5G-enabled smartphones is propelling the industry's growth. Bloomberg

Total 5G mobile subscriptions will exceed 580 million globally by the end of this year, driven by an estimated one million new 5G mobile subscriptions every day, according to the survey.

In May 2019, Etisalat – the UAE’s biggest telecoms operator – became the first service provider in the region to announce the availability of a 5G network, supporting smartphones for commercial use. It was soon followed by UAE’s second-biggest operator, du, and Saudi Telecom Company and Bahrain's Batelco.

“The report shows that we are in the next phase of 5G, with accelerating roll-outs and coverage expansion in pioneer markets such as the UAE,” Wojciech Bajda, vice president and head of GCC at Ericsson Middle East and Africa, said.

Nearly 80 per cent of the Gulf's total mobile data traffic in 2026 will be carried by 5G networks, according to Ericsson. The average monthly data usage in the region exceeded 18.4 gigabytes at the end of 2020, followed by India at 14.6GB and North America and Western Europe, which were both at 11GB.

“More than 300 5G smartphone models have already been announced or launched commercially … the cost of devices is going down and, moreover, the phone replacement cycle in the GCC is much shorter than other parts of the world. And most of the new phones are coming with 5G support,” said Mr Lazarevic.

Technicians are roped up as they install 5G antennas. The new network is expected to carry 35 per cent of mobile data traffic globally by 2024, according to Ericsson. Reuters
Technicians are roped up as they install 5G antennas. The new network is expected to carry 35 per cent of mobile data traffic globally by 2024, according to Ericsson. Reuters



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Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

Updated: July 06, 2021, 4:00 AM