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Middle East may overtake Europe in LTE deployment

June 13, 2010 12:14 pm

UAE telecoms operator Du has revealed that it is considering the best time to take advantage of LTE. The technology was only first introduced worldwide in December last year and to date has not had a wide scale roll out in the Middle East.

LTE is seen as a step towards the 4th generation of radio technologies and has become a buzz word in the telecoms industry. “Of course we are looking at this technology and we are talking to the vendors who have this technology available to them and we are seeing when is the best time to introduce this to our customers and how,” Du CCO Farid Faraidooni tells AMEinfo.com.

Gulf suffering from absence of widespread fixed broadband infrastructure

The Gulf region has shown a good appetite for data services, and the absence of widespread fixed broadband infrastructure has forced most subscribers to rely on mobile technologies for their internet needs, according to the Pyramid Research report.

“We expect LTE adoption in the region to reach 6.1% of all mobile subscriptions by 2014, due to strong growth of demand for data services, the region’s existing reliance on mobile rather than fixed access technologies and the increasingly competitive approaches of the telecom regulators,” states Kerem Arsal, research analyst.

“Among the region’s LTE pioneers – specifically Saudi Arabia, UAE and Bahrain – we project LTE adoption to reach 11.1% of all subscriptions by 2014, which surpasses our forecast of a 7.7% LTE adoption rate in Western Europe,” Arsal adds.

HSPA+ networks encouraged for Middle East

While LTE may still be some way off in the Middle East, there has been encouragement from some quarters to deploy HSPA+ networks in the mean time. There are six commercially live HSPA+ networks in the Middle East, with Kuwait’s Zain being one of the first mobile operators to deploy the technology.

Fabricio Martinez, Aircom services director of product management, tells AMEinfo.com that HSPA+ has advantages over LTE: “Deployment of HSPA+ is quicker and more cost-effective than LTE, as it is easier – and more palatable – for operators to upgrade a network than to deploy a significant amount of new hardware. The main advantage of deploying HSPA+ now over LTE is the deferring of significant investment to a time when the cost of LTE equipment will have reduced by as much as 50%, and the amount of available devices will have increased.”

Martinez adds that HSPA+ can deliver a return on investment in three years and offers a clear migration path to LTE when the time is right.

According to Pyramid Research, that time may be closer than expected as the Middle East market, and in particular the Gulf area, has recently experienced huge leaps in mobile broadband demand, creating the most suitable setting for LTE. The firm also states that, taking Saudi Arabia as an example, mobile data revenue has grown by 70.9%.

“Rich Gulf nations have already developed much expertise in upgraded 3G networks. This will make the transition to LTE easier. Despite criticisms of lacking liberalisation, regulators in the Middle East are increasingly becoming adept at managing competition. In the cases of Saudi Arabia and Bahrain, we find regulators that have successfully created fully competitive settings without price wars,” reveals Arsal.

With the introduction of LTE technology, the Middle East has an opportunity to overtake the more traditionally advanced areas such as Europe. With this opportunity in mind, it seems only a matter of time before HSPA+ becomes more widespread and then LTE takes over.