Non availability of 3G network and services are likely to
pave way for early adoption of 4G LTE services in emerging telecom markets such
as Saudi Arabia, the U.A.E and India.
First, 3G network is unable to handle massive increase in
mobile data traffic. Second, mobile operators do not have enough spectrum to
roll out quality 3G services. Emerging telecom markets will be in a position to
invest in 4G LTE technology and focus on mobile broadband than in 3G and then
migrate to 4G.
Countries such as Saudi Arabia, the UAE and India can
migrate to 4G technologies with the developing ecosystem and increasing
support from equipment vendors, according to a recent report by Frost & Sullivan.
LTE and WiMAX are two competing 4G technologies that can
drive the mobile broadband growth. Since more technology vendors are behind LTE
and operators are going slow on WiMAX deployments, LTE will emerge as the
future technology.
The surge in use of mobile broadband has been attributed
to the proliferation of smartphones and smart devices and is also gaining
momentum due to seamless demands of mobility and uninterrupted internet connectivity
with the evolution of social networking and blogging tools.
The initial launches in Saudi Arabia and the U.A.E. will
be limited to metros, with operators expected to increase their service
coverage gradually in 2012-2013.
India is one of the fastest-growing mobile markets,
witnessing high subscriber growth year-on-year. Frost and Sullivan estimates a
Compound Annual Growth Rate (CAGR) of 9.7 percent in the mobile
subscriber base, to reach 1,440 million subscribers at the end of 2017,which is
currently around 850 million and mobile penetration reaching 110.6
percent.
With underdeveloped fixed broadband infrastructure, the
Indian Government hopes to achieve higher broadband penetration through
wireless broadband. The initial launch of 4G LTE service is expected in early
2012, with Reliance, Aircel, and Bharti Airtel has already announced commitment
for the same. However, the service launch will be limited to only a few metros
and major cities, with nationwide rollouts expected only in 2013-2014.
In Gulf region mobile market, Saudi Arabia is largest
mobile markets in the Gulf region, with 51.6 million mobile subscribers and
mobile penetration of 186 percent while U.A.E. boasts of a highly saturated
mobile market with 197.2 percent penetration.
The U.A.E. has dynamic subscriber demographics due to
its large expatriate population. Similar to Saudi Arabia, the market has large
youth population, which is driving the demand for mobile services, particularly
mobile Internet and mobile data. Also, with high disposable income, the
penetration of smartphones, laptops, and tablet PCs is high and is expected to
increase further,” said Abhishek Chauhan, senior consultant, ICT Practice,
Frost & Sullivan, South Asia and Middle East.
Saudi Arabia and the U.A.E. are also expected to witness high 4G LTE growth,
with CAGR of 54 and 85 percent, respectively along with India, the upcoming
opportunities for LTE and WiMAX in the next 5-10 years seems progressive. It
might differ in India, Saudi Arabia, and the U.A.E depending on ecosystem
balance of the region.
For instance, India’s mobile subscriber base is crossing
800 million already in India with 71.11 percent wireless density amongst which
34 percent is rural, where mobile usage is still intertwined in SMSs, calls and
internet. To cater 66 percent urban users, 4G LTE might have good prospect.
Amidst there might be a delay in the transition from 3G
to 4G LTE and WiMAX owing to many challenges faced by operators in Indian
telecom industry, like decreasing ARPU, investment issues regarding BWA as BWA
is costly, and ecosystem balance.
In India, besides BSNL, only Mukesh Ambani-led Reliance
Industries’ Infotel Broadband Services has licenses in all the 22 circles.
Among other operators like Aircel got seven slots, Tikona got five, Qualcomm
and Bharti Airtel four each, Qualcomm and MTNL two each and Augere has
one circle.
Handset compatibility is a big challenge. If 3G is
shifted to 4G as projected, not many users will move as 4G compatible handsets
are costlier than 3G or 2G.
When the 3G services were launched in India in 2010, more
than 20 percent of the phones were 3G-enabled. Though this was a boost for the
industry, the availability of 3G phones did not in reflect in the growth of 3G
subscribers.
When 4G will be launched in 2012, the availability of 4G
devices will be less than 5 percent of smartphones. Plus, the device makers
will not be ready to go for a downward revision in LTE device prices.
The success of 4G will depend on the ecosystem being prepared by telecom
equipment vendors such as Qualcomm, Ericsson, Nokia Siemens Networks,
Alcatel-Lucent, ZTE, Huawei and others.
By Rashi Varshney
editor@telecomlead.com
