The advent of 5G mobile service in Saudi Arabia offers a major leap forward in communications quality, which is critically important to the Kingdom’s plans to modernise and develop a diversified, globally competitive economy. A 5G network will be faster, able to handle more data and can do so with lower latency – the delay in processing large numbers of real time data transactions. It will also allow for the connection of a greater number of devices.
However, a key reason for establishing 5G infrastructure goes beyond offering better service to human subscribers: it is widely hailed as the technical gateway to the vast growth in machine-tomachine links associated with the coming Fourth Industrial Revolution. According to US-based technology conglomerate Cisco, more than 50bn devices will be connected to the internet worldwide by 2020, and there will be 1trn embedded sensors by 2022. A large proportion of these connections will be machine-to-machine, rather than involving humans.
Rise of the Machines
A number of innovations are likely to drive sharp growth in machine-to-machine interactions. One of them is the rise of smart cities, where a wide range of services will be based on remote sensors relaying information on traffic, weather, parking, medical services, logistics tracking, and power and utility usage, among other things, which all requires industrial-level data processing.
Autonomous vehicles, for example, need to be able to receive and transmit data captured by their sensors – an example of the growth of the internet of things (IoT). Augmented reality, virtual reality and artificial intelligence applications will also need 5G infrastructure. Mobile operators are welcoming the various uses of IoT because they require increased data handling and transmission at a time when revenues from traditional telecoms services such as voice communications have hit a plateau, or in some cases, are declining. 5G technology offers the significant increase in capacity necessary to handle the projected rise in demand for data.
The transition to 5G networks will not be without its challenges, however. It requires very high levels of infrastructure investment and technical cooperation between different stakeholders, and most experts believe there will be a multi-year period where 4G and 5G technologies will overlap.
UK analytics firm GlobalData, for instance, estimates that by the end of 2020 only 0.5% of all mobile data will be carried on 5G networks. Telecoms companies will therefore face a double pull on their budgets, as they will need to invest capital in 5G infrastructure development while covering the capital amortisation and operating costs of the earlier wave of 4G expenditure.
State Support
The government is making a major financial commitment to supporting the rollout of 5G, seen as a key technical component of the country’s Vision 2030 development programme. Abdullah Al Swaha, the minister of communications and information technology, has stressed Saudi Arabia’s intention to become a world leader in 5G.
Between May 2017 and May 2018 the Communications and Information Technology Commission, the sector regulator, allocated 160 MHz of additional spectrum in the 700-MHz, 800-MHz and 1800-MHz bands to the country’s mobile operators for future 5G use. In May 2018 temporary licences for the 3.6-GHz to 3.8-GHz band were given to operators to conduct 5G trials until the end of 2019. Al Khobar was the first city to undertake 5G service tests that month, with plans that this activity would turn into full licences and spectrum awards by mid-2019. Indeed, in November 2018 Al Swaha said commercial 5G service would begin the following year.
Partnerships
In October 2018 the second-largest mobile provider, Mobily, announced it had signed a memorandum of understanding (MoU) with Chinese telecoms company Huawei, under which the two companies agreed to collaborate on the introduction of 5G in the Kingdom. Specifically, the companies will work together on Network 2023, a five-year plan to upgrade Mobily’s existing infrastructure, with Huawei acting as an adviser for network planning and for the shift to an increased volume of cloud-based operations. Maziad Al Harbi, the chief technical officer of Mobily, told local media that collaboration with Huawei would ensure Saudi Arabia remained at the forefront of the latest trends and technologies in 5G.
Huawei gave a statement on the agreement as well, saying that it aimed to play a leading role in helping Saudi Arabia implement intelligent and agile telecommunications development to meet its Vision 2030 target of becoming a diversified and knowledge-based economy. Mobily has also worked with another global communications technology company, Ericsson of Sweden, to prepare for 5G. Ericsson supplied Mobily with a standalone endto-end 5G system for a demonstration at the Mall of Arabia in Jeddah in August 2018.
The mobile industry’s main player, Saudi Telecom Company (STC), is forming alliances with international tech companies as well, announcing partnerships with Huawei, Nokia and Cisco. Under the terms of its agreement with STC, Nokia will offer its technology to help establish hundreds of base stations in southern and western Saudi Arabia. The STC-Huawei agreement focuses on innovation and joint efforts to create a 5G roadmap. The partnership with Cisco, for its part, will see the US company assist STC to “transform its network to unlock the commercial potential of ultra-modern 5G mobile networks”. Ericsson, meanwhile, is also an important equipment supplier to STC (see overview).
Zain, the third-largest provider with a market share of around 18%, is also gearing up for the transition. In February 2018 it announced a MoU with Huawei, under which the Chinese tech giant would help deploy 4.5G and 5G networks, advise on 5G network strategy and help to “cloudify” its operations.
Regional Scope
The Gulf countries are poised to be among the first adopters of 5G worldwide. In December 2018 the GSMA – the trade body that represents international mobile phone operators – welcomed a decision by the Arab Spectrum Management Group to reserve the 3.3-GHz to 3.8-GHz spectrum for mobile broadband to help accelerate the rollout of the 5G network.
According to “The Mobile Economy: Middle East and North Africa 2018” report by the GSMA, various Arab countries including Saudi Arabia, Qatar and the UAE will launch 5G services in 2019, allowing innovative new applications and boosting economic growth. Bahrain, Oman and Kuwait are projected to be not far behind. GCC countries already have some of the highest data consumption rates in the world, making 5G a real opportunity for further expansion.
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