With the current Third-Generation (3G) networks proving incapable of handling the growth in mobile data traffic, mobile operators inIndia,Saudi Arabia, and the U.A.E. are soon expected to migrate to 4G technologies to accommodate the surge in data traffic. LTE and Worldwide Interoperability for Microwave Access (WiMAX) are the two competing 4G technologies expected to drive the growth in mobile broadband, globally.
This surge in use of mobile broadband has been attributed to the proliferation of smartphones and smart devices, along with the increasing use of social networking and blogging tools, amongst others. Mobile broadband is also gaining momentum because of the users’ need for seamless mobility and continuous Internet connectivity. The increasing popularity of bandwidth-intensive mobile applications has further boosted the use of mobile broadband. To sustain the momentum, mobile operators inSaudi Arabiaand the U.A.E. are progressively committing themselves to LTE technology, thus moving towards 4G services.
According to an upcoming Frost & Sullivan Report, ‘LTE Outlook forIndia,Saudi Arabia, and the U.A.E.,’Indiais one of the fastest-growing mobile markets in the region, witnessing high subscriber growth year-on-year. Frost and Sullivan estimates a Compound Annual Growth Rate (CAGR) of 9.7 per cent in the mobile subscriber base, to reach 1,440 million subscribers at the end of 2017, and mobile penetration reaching 110.6 per cent.Saudi Arabiais one of the largest mobile markets in the Gulf region, with 51.6 million mobile subscribers and mobile penetration of 186 per cent; whereas the U.A.E. boasts of a highly-saturated mobile market, with mobile penetration of 197.2 per cent. The mobile consumers inSaudi Arabiaand the U.A.E. have a strong demand for mobile data services. Hence, operators are progressively upgrading their networks to offer high-speed data services.Saudi Arabiaand the U.A.E. are also expected to witness high LTE growth, with CAGR of 54 and 85 per cent, respectively.
Commenting on the Indian 4G LTE market, Abhishek Chauhan, Senior Consultant, Information and Communications Technology Practice, Frost & Sullivan, South Asia andMiddle East, says, “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 already announcing their firm 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. LTE subscribers in the country are estimated to grow at a CAGR of 258.9 per cent in the next five to seven years. LTE revenues are expected to grow at a CAGR of 220.5 per cent over the same period.”
On the U.A.E. market, Mr. Chauhan notes, “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.”
The initial launches inSaudi Arabiaand the U.A.E. will be limited to only major metros, with operators expected to increase their service coverage gradually in 2012-2013. Though LTE penetration might see a marginal uptake initially, it is expected to rise with gradual coverage expansion and more developed device ecosystem.
The Frost & Sullivan Report indicates that LTE is expected to lead the shift toward 4G technologies inSaudi Arabia, the U.A.E, andIndia, with the developing ecosystem and increasing support from equipment vendors. The Report also recommends commitment and support from equipment manufacturers and mobile operators to drive the growth in the LTE market. It concludes with insights on the upcoming opportunities in India,Saudi Arabia, and the U.A.E in the next 5-10 years.