Exclusive: Roll-out of 5G in GCC country-wide won't happen soon, Ericsson says

Owing to ongoing advancements, UAE telcos to gain an additional Dh12.1bn in revenues by 2026

Ericsson is helping operators in various aspects of the network and digital transformation. Reuters

Swedish telecommunications company Ericsson, which is working with leading telecom operators such as du, Etisalat and Kuwait's Zain Group in the Arabian Gulf region, says it is too early to do a country-wide rollout of the 5G network.

5G is the name used to describe the fifth generation of cellular mobile communications, which is poised to include rapid data transfer rate, energy saving, cost reduction, and widespread device connectivity through Internet of Things.

"Deployment of 5G purely depends on the use-case and telecom operators. Regional telecom operators are making concerted efforts in upgrading their existing infrastructure, testing 5G capabilities and 5G use case. Commercial deployment and monetisation of 5G needs a collaborative effort for business viability," Wojciech Bajda, president of Ericsson in Gulf countries, told The National.

“But on the other hand, if you look at the US market, operators like Verizon and AT&T are rolling out 5G nationally. But they are targeting very specific use-case, which is fixed wireless access that means replacement of fibre.”

The 5G technology will enable digitalisation of 10 industries in particular - agriculture, manufacturing, energy and utilities, public safety, health care, public transport, media and entertainment, automotive, financial services and retail – Ericsson said in a study.

It also added that telecom operators in the UAE stand to gain an additional $3.3 billion (Dh12.1bn) in revenues by 2026, with manufacturing presenting the biggest opportunity.

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Mr Bajda said that all Gulf countries are exploring 5G and some of them are at a very advanced stage to get the spectrum.

“Saudi Arabia is very advanced… the government has already confirmed that they are getting the spectrum for free. This is to encourage the operators to spend money on rolling out the network.”

“However, in the Gulf, there is no commercial usage [of 5G] yet. Many of them [telcos] are also talking about fixed wireless access, the same like the US.”

The telecom sector in the region is anticipated to evolve in the coming years. By 2023, 90 per cent of telecom subscriptions are expected to be for mobile broadband and there will be an 11-time increase in mobile data traffic in the region, according to Ericsson.

Main driving factors behind this shift include a young and growing population with increasing digital skills, as well as more affordable smartphones.

Mr Bajda said that 5G will trigger more opportunities in the region.

“We have to understand that 5G is not only about a new radio set… it requires modernisation of the core network, backup and transmission," he said. "It will activate innovation not only in telecom but in various other areas such as transport, operating systems and security.”

Mr Bajda, who declined to share regional revenue details, said that they are getting new business in the region and forecast solid growth in the coming months.

Business-wise, Ericsson considers UAE its leading market in the region.

“GCC is an advanced market with many opportunities. ARPU (average revenue per user) from the mobile user is around $30 to 35 per month whereas in some countries of Middle East and Africa it is less than $5,” said Mr Bajda.

“The region is quite dynamic and each market is at a different stage with regard to their network preparedness and evolution. We can compare GCC nations with places like Western Europe, Japan and the US when it comes to advancement in ICT.”

In the GCC, excluding Saudi Arabia, Ericsson is working with almost 30 to 40 operators assisting them in various aspects of the network and digital transformation agendas.