In March 2010 Orange became the first operator to launch a 3G mobile service in Jordan, having acquired a 15-year licence – including a one-year exclusivity deal – the previous year. Zain joined Orange with the launch of its mobile broadband service in March 2011, with a network that uses HSPA+-based infrastructure. Then in January 2012 Jordan’s third full mobile operator, Umniah, said it intended to launch its mobile broadband service before the end of September, also using HSPA+ technology. Umniah, like Orange and Zain, paid the government $70m for its 3G licence.
UPTAKE: While the kingdom might have come late to the 3G party, it is making up for lost time. Uptake was initially slower than expected but subscription numbers are now growing rapidly, likely stimulated by increased competition. According to the Telecommunications Regulatory Commission, the number of mobile broadband users grew from 133,136 in the first quarter of 2011 to reach 312,209 in the fourth quarter, an increase of 135% in nine months. This is having an impact on wider internet access; at the end of 2011 mobile broadband accounted for more than half (50.6%) of all internet subscriptions. With other forms of web subscription stable or falling, 3G accounted almost entirely for the increase in the internet subscription penetration rate from 7.5% in the first quarter to 10% in the fourth.
The bulk of 3G access is through USB keys, or dongles, for use with computers. However, the increasing popularity and affordability of smartphones (SPs) is also driving growth, and recent regulatory developments are likely to accentuate this. According to a 2011 study by the Arab Advisers Group, 42% of cellular handsets used by the respondents were SPs. Symbian dominates the SP segment, with a market share of 62%.
CHANGING STYLES: The popularity of 3G is set to help to persuade Jordanians to move away from the overwhelmingly dominant prepaid segment into post-paid. The success of 3G is also spurring the mobile content industry by enabling much more advanced forms of content provision such as streaming video, an important new niche. In May 2011 Orange announced the inclusion of new channels and the launch of a new platform for its mobile TV service, which began in 2010 and includes streaming of a variety of pan-Arab television networks and music channels. Another use for the mobile broadband network likely to emerge in the near future is machine-to-machine applications, with the health care industry a likely customer for the service.
The mobile content segment faces a number of challenges resulting from the fact that data is not as cheap by regional standards as voice. However, the planned entry of Umniah into the mobile broadband market in September 2012 will increase competition, which should put further downwards pressure on data costs.
While 3G roll-out is not yet complete across all networks, the industry is already looking ahead to the next generation of technologies. In April 2012 Orange Jordan became the first operator in the kingdom to make a concrete commitment to the next generation of mobile internet technology, announcing plans to prepare to build a 4G/LTE network within no more than three years. In March the firm announced it had contracted Ericsson to expand and upgrade both its 2G and 3G networks in the country and to supply it with a RBS 6000 compact site solution. This will improve its capacity to offer products such as mobile TV as well as help ready it for an eventual transition to LTE. Jordanian 3G licences automatically allow operators to launch their own LTE networks, and the other mobile operators are likely to follow quickly behind.
THE NEW STANDARD: In the short-to-medium term at least, 3G uptake seems likely to continue to grow rapidly, in particular given Umniah’s forthcoming entry to the market. If the arrival of a third operator brings the same level of competition to the mobile broadband industry as currently exists in the mobile voice segment, prices look set to fall heavily and penetration rates to grow strongly for the foreseeable future. This should open a wide range of opportunities for companies from across the telecoms and IT industry and beyond.
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