In June 2019 Zain Kuwait launched the country’s first fully integrated 5G mobile internet service. Speaking at the launch, Nawaf Al Gharabally, chief technology officer at Zain, told local press that telecommunications services are key to accelerating economic growth and boosting trade. “Obviously, existing mobile networks will not be able to satisfy the future needs of the telecoms sector,” Al Gharabally said. “5G will contribute to the digital transformation and prosperity of Kuwait.” With other players following suit, Kuwait is setting an example for the Middle East in the adoption of this new technology.
The 5G rollout does not come without considerable challenges, however. The current market is one of limited growth for telecommunications firms as the technological cycle quickens and infrastructure becomes more expensive. That said, 5G offers new opportunities for services with its higher speeds and volumes. Kuwait’s championing of the technology is key to its wider goal of becoming a telecommunications and global trading centre.
Zain’s announcement came after several years of trials, with the company successfully testing 5G in September 2017 at a throughput speed of over 70 Gbps on a 2-GHz spectrum. The Communication and Information Technology Regulatory Authority reserved a 3.5-GHz C-band for the new technology, announcing in June 2019 that licences would be available for a one-time fee of KD1m ($3.3m) per operator.
5G offers three main improvements on the existing 4G network. The first is an increase in speed and capacity, and the second is a reduction in latency, allowing more uninterrupted services with high data delivery. Third is 5G’s increased usability for massive machine-type communications (mMTC) given its low power and wide-area utility over many devices. There are inherent benefits for consumers and businesses alike in the technology. It is advantageous for augmented reality, virtual reality and artificial intelligence, and its high speed and capacity and low latency are vital for continuous, secure strategic services. What is more, mMTC capability is important in the development of the internet of things and smart cities as it enables large numbers of machines to be connected over a wide area.
Shift in Business Lines
While there are numerous benefits to the technology, 5G is expected to put fixed-line broadband under pressure. This is a worry for telecommunications companies, which have come to see the segment as one of the few areas of financial growth. Additionally, significant levels of investment are needed to bring the technology on-line. The change to the new generation – which operates on different parts of the spectrum – will require a shift away from 4G’s macrocells towards small cells and multiple towers.
As such, most telecoms companies worldwide have opted for a cautious, phased rollout of 5G technology, and Kuwait is no exception. Zain Kuwait’s 5G services were launched at a number of prominent locations, with a gradual expansion of coverage planned for the future. Ooredoo Kuwait, which conducted the first international 5G call in the region to its parent network in Qatar in January 2019, is following a similar strategy, and also launched its services in June 2019. VIVA, however, is being more assertive. In February 2019 the company announced the rollout of a 1000-site 5G network in partnership with Huawei that will support over 100,000 devices.
The introduction of 5G poses a broader question for the telecommunications industry with regard to how it will adapt to the changing environment. “You cannot continue as a mobile-centric operator,” Kamil Hilali, chief strategy officer of Zain Group, told OBG. “You have to develop and create other areas of value for customers.” Gearing up to meet these challenges will be crucial for the segment in the years to come.
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