Within the past year, four Middle East operators have launched LTE: Etisalat in the UAE; and all three of the mobile operators in Saudi Arabia – STC, Mobily and Zain.
But it is still early days for LTE in the Middle East. Although none of the operators will reveal their LTE subscription numbers, the indications at the LTE MENA conference - which was put on by Informa Telecoms & Media in Dubai on April 29-30 - were that the number of LTE subscriptions in the region is still only in the low thousands.
Of course, the Middle East is not alone in this – LTE is a new technology and LTE subscriptions worldwide at end-1Q12 totaled only about 15 million, of which more than half are accounted for by just one operator, Verizon Wireless in the US, with about eight million LTE subscriptions.
One of the factors behind the low take-up of LTE in the Middle East is – as elsewhere – the lack of LTE devices. The LTE devices that Middle East operators are offering are almost entirely limited to LTE-enabled USB modems (dongles), though Zain Saudi Arabia has recently also introduced a LTE/Wi-Fi router.
However, Etisalat, STC and Zain Group all said at the LTE MENA conference that they are monitoring the LTE device market and are considering forming partnerships with device makers to introduce additional LTE devices, particularly LTE-enabled smartphones and tablet PCs.
Middle East operators are typically much less active in the device market than their peers in Europe and North America. But the arrival of LTE arguably presents Middle East operators with an opportunity, or perhaps a need, to become directly involved in the sale of LTE devices.
The fact that Middle East operators are short of suitable devices to popularize LTE was demonstrated by the recent launch of the new, third version of Apple’s iPad. Middle East operators hoped this LTE-enabled version of the iPad would give a push to demand for LTE connections. But their hopes were dashed because the iPad is, at present, only configured to work with the spectrum bands used for LTE in North America, 700MHz and 2.1GHz – neither of which is being used for LTE in the Middle East.
Operators in the Middle East are also still in the early stages of developing their pricing and promotion of LTE to consumers. There are signs that operators are deciding that they should make LTE more affordable. Etisalat, for example, has this week cut the price of its LTE dongle from 799 Emirati Dirhams (€165) to 599 Dirhams (or free or 159 Dirhams or 359 Dirhams with one of Etisalat’s several six- or twelve-month data plans).
Etisalat is also shifting its marketing for LTE away from a focus on technical terms and features (LTE; 4G; download-speed metrics) that are likely to mean little to potential customers and towards messages that better communicate the benefits of LTE (such as, “Upload 850 pictures while you order coffee.”)
Another notable feature of LTE in the Middle East – as well as a possible problem area – is the wide range of modes and spectrum bands that are being used. In Saudi Arabia, local mobile operators had initially hoped to use the 2.6-GHz spectrum band for FDD-LTE, but this band is not available to them because it is being used by the military.
Consequently, STC decided instead to launch TD-LTE in the 2.3-GHz spectrum band – a choice that the operator says is justified by the fact that this variant of LTE is being used in China and India, large markets that will give it momentum. Saudi number two operator, Mobily, is also using TD-LTE in the 2.3-GHz band. However, Zain Saudi Arabia, the country’s No. 3 operator, is using FDD-LTE in the 1.8-GHz spectrum band.
In the UAE, Etisalat launched FDD-LTE in the 2.6-GHz band, and plans to also launch in the 1.8-GHz band, as well as in digital dividend spectrum when that becomes available. Du, the UAE’s number two operator, plans to use the 1.8-GHz spectrum band for its LTE launch. Bahrain has recently started a spectrum-allocation process that is expected to see the 2.6-GHz spectrum band allocated for the launch of LTE services in that country.
This variety of mode and spectrum selections is almost certainly going to create difficulties for users who are hoping to roam with LTE devices within the region, unless some action is taken by regulators and the industry to co-ordinate spectrum use at a regional level.
Nevertheless, the likely increasing availability of LTE devices, combined with the wider availability of LTE networks as well as further promotion of LTE by the operators, is likely to boost LTE in the region. But it will be some time before LTE becomes a mainstream technology in the Middle East – Informa Telecoms & Media forecasts that the number of LTE subscriptions in the Middle East will be only a relatively modest 15 million at end-2016.
Matthew Reid is a principal analyst at Informa Telecoms and Media. For more information, visit www.informatandm.com/