IoT growth in MENA impresses

LIVE FROM MOBILE 360 MENA, DUBAI: IoT connections in the Middle East and North Africa (MENA) region experienced a growth rate second only to Asia Pacific, with a CAGR of 16 per cent expected to boost connections from 396 million in 2018 to 1.1 billion in 2025.

A new GSMA Intelligence (GSMAi) report, Realising the potential of IoT in MENA, shows initiatives from governments and the mobile industry are expected to be fundamental in helping IoT revenues reach $55 billion by 2025, an annual growth rate of 19 per cent.

“The commitment to, and innovation in, IoT seen across MENA is also expected to benefit the GDP of the regional economy to the tune of $18 billion in 2025,” up from $8.5 billion in 2018, GSMAi wrote in the report.

[1]In 2019, the consumer and industrial IoT segments have taken equal shares of total IoT connections (see chart left, click to enlarge), but industrial IoT is where most of the growth will occur, reaching 57 per cent of total connections by 2025, driven by an increase in smart utilities, retail and city deployments.

While IoT in the region is still nascent, the analyst group noted its share of global IoT revenues is approaching 6 per cent, significantly ahead of its economic share of GDP, which is just under 4 per cent.

Operators need to generate IoT revenue
The research also highlighted the need for operators to step-up to the task ahead and move beyond just a connectivity role.

“To take a greater share of the IoT revenue opportunity, operators need to move beyond connectivity into strategic partnerships with ecosystem players and even governments to launch new value-added services.”

GSMAi highlighted a number of recent successful operator-led partnerships between carriers and third parties, including Etisalat UAE’s smart fire alarm solution Hassantuk for Homes via a deal with the Ministry of Interior, and operator du and healthcare incubation platform company OLEA showcasing a number of smart health devices.


4G tipped to remain top mobile tech in MENA

LIVE FROM GSMA MOBILE 360 MENA, DUBAI: GSMA Intelligence (GSMAi) noted while 5G launches are making headlines on a regular basis, the technology would likely remain a long-term play in Middle East and North Africa (MENA), with 4G tipped to continue growing over the next few years.

In its The Mobile Economy: Middle East and North Africa 2019 report, the GSMA’s analyst arm noted 4G would surpass 3G as the region’s most-dominant technology in 2021 and maintain this position for the foreseeable future.

The technology became the region’s second-most used earlier this year when it surpassed 2G, leaving it behind only 3G in terms of prominance. In the report, GSMAi wrote adoption of 4G is being “driven by coverage expansion and operator efforts to migrate 2G and 3G users” to the later technology.

“However, device affordability remains a concern for many consumers in low-income brackets,” the analyst group warned.

By 2025, 4G is expected to account for just over half (52 per cent) of the region’s 722 million mobile connections, up from around a third in 2019.

In contrast, there are expected to be 45 million 5G connections across the region at the same point, accounting for 6 per cent of total mobile connections.

[1]GSMAi noted the majority of 5G launches in MENA are still a few years away, although coverage will rise steadily in the period to 2025 (see image left, click to enlarge).

To date, all 5G launches in MENA have taken place in five GCC (Gulf Cooperation Council) Arab States (twelve operator launches in total across Bahrain, Kuwait, Qatar, Saudi Arabia and the UAE).

“The 2020s will see 5G activities become more widespread across the region, with trials and commercial launches expected in non-GCC countries,” particularly Egypt, Morocco and Turkey, the research group added.


Intelligence Brief: Spectrum auctions – when do they pay off?

Since spectrum auctions in the mobile sector first became widespread in the 1990s, they have tended to generate one of two headlines. Either there is a “spectrum bonanza”, where more money is raised than expected, or “Government loses out” by getting less money than it was hoping for. In this respect, the record-setting high prices that UK and German operators paid for 3G spectrum almost 20 years ago still seems to influence some of the expectations amongst governments and industry analysts.

But when analysing spectrum awards, we should not lose sight of the impact on consumers.

A debate on this topic has persisted for years, with lots of discussions about economic theory and sunk costs. Do high spectrum prices – especially those driven by government policies rather than market demand – have an impact on the amount that operators invest in their networks or on the prices they charge to their customers? Or can spectrum awards be used to generate more revenues for public services without harming consumers of mobile services?

In fact, very little evidence has been gathered to determine how consumers are affected by spectrum prices. The research that has been carried out is generally inconclusive. We therefore recently published a study [1] that isolates the impact of spectrum pricing on consumer outcomes, including network coverage, quality and mobile prices. Looking at 229 operators in 64 countries (including both developing and developed markets) over the period 2010-2017, the research presents strong evidence of a causal link between high spectrum prices and negative consumer outcomes. Specifically, we found that:

High spectrum costs played a significant role in slowing the roll-out of next generation mobile networks in both developed and developing countries;
More expensive spectrum reduced network quality, as measured by download and upload speeds and latencies;
Countries that released spectrum early and in larger quantities saw quicker 3G and 4G network roll-out than countries that released spectrum later and/or in smaller amounts;
High spectrum costs are associated with higher consumer prices in developing countries, though this is not conclusive and so further research is needed.

What does this mean for spectrum policy?

[2]First, as economists are often fond of saying, “there is no free lunch”. governments that want to maximise revenues from spectrum auctions can continue to pursue this as an objective but they will now do so in the knowledge that it will have a negative impact on the development of mobile services. This is incompatible with other objectives to expand access to 4G and 5G as enablers of economic growth and sustainable development. Ultimately, policy-makers have to make a decision on what trade-offs they are willing to accept.

Second, auctions can deliver inefficient outcomes when they are poorly designed. One example of this is in relation to reserve prices. If these are set too high then precious spectrum may go unsold – as in the case of India (2016), Bangladesh (2018) and Ghana (2015 and 2018) – or force operators to pay more than they would otherwise. Another example is when governments artificially limit the supply of spectrum to operators, for example through set-asides (such as the German 3.5GHz auction in 2019) or large and mismatched lot sizes (such as the Italian 3.5GHz auction in 2018). The lesson from this is that auctions will not automatically deliver an efficient outcome if they are designed to achieve several objectives. Policy-makers must decide what their priorities are.

Lastly, spectrum should be released to the market as soon as there is a business case for operators to use it. In a market where long-term value, innovation and cost reductions are driven through short technology cycles (5G has been launched within ten years of the first 4G LTE networks), unnecessary delays to spectrum awards risk harming network roll-outs and leaving people behind. An up-to-date spectrum roadmap also alleviates uncertainty.

As we move into the 5G era, in many countries the temptation to maximise spectrum revenues will remain – the potential sums involved are often too large to ignore. But if governments want to ensure that spectrum is utilised to support affordable, high quality mobile services for the benefit of citizens, then the best way of achieving this is for operators to pay market-driven prices for spectrum that are not distorted by auction design or other policies.

We’ll know we are moving in the right direction when ‘high’ and ‘low’ auction revenues stop making the headlines and instead generate the same level of media interest as other aspects of spectrum management policy.

Kalvin Bahia – Economist – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Should you care about CBRS?

Last week, the FCC approved five companies to begin initial commercial deployments of the Citizens Broadband Radio Service (CBRS) [1], which introduces a flexible model for spectrum sharing in the 3.5GHz band.

This development represents a major milestone in what has been a huge talking point in the US over the last few years. Nevertheless, CBRS is not widely understood elsewhere even though its implications are potentially wide-reaching. This makes it important to explore what CBRS means for mobile operators, as well as those companies outside of the industry, which will use CBRS as a testbed for deploying their own connectivity solutions.

How does CBRS work?
The CBRS initiative opens up 150MHz of the 3.5GHz band (3550MHz to 3700MHz) using a three-tiered approach to spectrum management:

Incumbents: Includes military, satellite providers and wireless ISPs. These users have the most rights over the CBRS spectrum.
Priority Access Licences (PAL): Holders pay to buy rights to a portion of the spectrum (70MHz), but can only use the spectrum when it is not in use by incumbents. The PAL spectrum auction takes place in 2020 using county-sized licence areas.
General Authorised Access (GAA): Users will be allowed localised access to up to 80MHz of spectrum as long as it does not interfere with incumbents or PAL holders. GAA spectrum will be made immediately available for commercial deployments.

The five companies approved by the FCC to start commercial deployments (Amdocs, CommScope, Federated Wireless, Google and Sony) are Spectrum Access System (SAS) administrators. Their role is to manage requests to use the spectrum at particular times and in certain areas, ensuring there is no interference between the three tiers.

How does CBRS benefit mobile operators?
In GSMA Intelligence’s report Region in Focus: North America (released this week), we look at the latest telecoms and broader TMT trends in the region, including a detailed look at CBRS’s potential impact on mobile operators. One key benefit will be the chance for operators to use CBRS spectrum to boost mobile capacity in congested locations. This is similar to how some operators deployed the unlicensed 5GHz band via Licensed Assisted Access (LAA).

Mobile operators seeking to enhance capacity will benefit from 3.5GHz spectrum emerging globally as a key 5G licence band. This means we can expect to see a steady release of new smartphones compatible with CBRS, including the latest iPhones and Samsung Galaxy devices.

Yet, CBRS’s potential extends beyond smartphones. It presents mobile operators with a chance to deliver home broadband services through fixed wireless access (FWA) technology. These deployments can be expected as early as this year, with AT&T already working with Samsung and CommScope to rollout FWA services using CBRS spectrum.

New opportunities, new players
CBRS will also drive change in other areas. For example, the use of localised spectrum licences makes it easier to deploy a location-specific mobile network, which allocates a dedicated slice of bandwidth for the sole use of a specific customer.

Demand for location-specific networks is likely to come from several enterprise verticals such as the manufacturing sector, which could use CBRS to support the high-speed mobility required by robots and vehicles as part of factory automation. There is also likely to be interest from industries involved in handling sensitive and personal data, attracted by the increased security offered by isolating their data from public networks.

CBRS also enables other solutions, such as neutral host networks. These are most common as localised deployments in busy places requiring ultra-high bandwidth (for example airports, shopping centres and stadiums). Several companies are trialling neutral host solutions including Wi-Fi hotspot operators (for example Boingo), equipment vendors and other localised network providers (Dense Air). CBRS allows neutral host networks to be deployed without mobile operators sharing licensed spectrum, easing commercial and technical obstacles.

Mobile operators are most likely to lead initial CBRS deployments. At the same time, operators can’t assume to be the default providers of connectivity. CBRS lowers the cost of entry to new providers, and many enterprises are taking this opportunity to experiment with deploying their own solutions. For example, Amazon plans to deploy CBRS at its Sunnyvale campus in California, building on a demo at AWS re:Invent 2018 where it showcased real-time surveillance cameras and smart meters.

What to expect next?
The initial commercial deployments of CBRS must run for a minimum of 30 consecutive days. SAS administrators will then report their findings to the FCC, ensuring their systems worked to prevent interference between users. After this, we will be closely watching out for further CBRS deployments as well as other key milestones, including:

PAL auction: PALs come with longer licence terms, larger coverage areas and greater rights than the GAA tier. However, the cost of acquiring PALs is likely to reflect these benefits. As such, the PAL auction will be a true barometer of demand for spectrum from those companies outside the mobile industry, which are deploying CBRS solutions in the GAA tier.
CBRS in 5G: CBRS will initially use LTE, with support for 5G coming later in the CBRS roadmap. This poses a dilemma to companies interested in deploying CBRS: move early on LTE or wait for 5G support? Many customers began planning their deployments when 5G was still a way off (reflecting the significant delays encountered by CBRS). It is therefore unlikely they will wait until CBRS supports 5G to commence deployments. This underlines the strong early demand seen by SAS administrators (such as Federated Wireless), which indicates LTE meets the initial CBRS requirements of most customers.
More spectrum sharing initiatives: If successful, CBRS could lead the FCC to pursue similar initiatives in other frequency bands. There will also be implications beyond the US, with many countries contemplating the merits of spectrum sharing initiatives. Some of these have already come to fruition, albeit in different forms to the three-tiered approach of CBRS. UK regulator Ofcom is enabling spectrum sharing through Shared Access and Local Access licences across four bands, while Germany’s Bundesnetzagentur has a gone a step further through reserving 100MHz of mid-band spectrum for local use.

James Joiner – analyst, Core Mobility Research – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Who would licence Huawei 5G tech?

Last week, following a two-hour interview of Huawei’s CEO and founder (Ren Zhengfei) by The Economist [1], the vendor’s 5G network solutions became the buzz of the mobile tech industry, yet again. For much of this year, those solutions have been in the news because of a potential (and, in some cases, real) prohibition against operators deploying them. The news last week was different.

Over the course of the interview, Ren said he would be willing for Huawei to license its 5G technology (existing patents, code, production techniques), allowing a third party to control and alter the code, building 5G kit based on these assets and ensuring that Huawei would have no control over any infrastructure that results.

And, over the course of the week that followed, various folks weighed in on what this all means. To their credit, the punditry generated a lot of great insight into why Huawei would make such an offer. That’s an important question. But it’s not nearly as important as questions around what comes next and how the market (including operators and other vendors) might react to Huawei’s offer.

What’s the Huawei strategy behind all of this?
This is an easy one, if only because it’s been discussed so much already.

The concept of licensing existing 5G assets (patents, code, technical blueprints) and giving a buyer permission to alter the source code is all about building trust while monetising existing R&D. If another company can leverage Huawei’s core 5G assets in order to build its own solutions, that company can (in theory) ensure that it’s secure. The licensee benefits by capturing business based on Huawei’s 5G know how. Customers benefit from equipment they know is safe (without dependency on a party they don’t trust). Huawei benefits by generating revenue that it wouldn’t otherwise have access to. Win-Win-Win.

There is another angle here too. We’ll come back to that at the end.

Who would buy third party kit powered by Huawei?
Past performance, as they say, is no guarantee of future results. Putting that aside for the moment, Huawei claimed earlier this month that it had secured more than 50 commercial 5G contracts. In other words, there’s a good body of empirical evidence suggesting that Huawei’s 5G kit is compelling, and not just in price sensitive markets. If another vendor could replicate these products, then their offer should be compelling as well.

And if there was ever a time for a new vendor to enter the market with a compelling product offer, that time is now.

[2]In a poll of 100 operators across the globe (think the vast majority of mobile connections and capex), the GSMA Intelligence team checked on whether or not 5G was going to be an occasion to bring on new network suppliers (see chart left, click to enlarge). The verdict? More than half plan to do just that. Just as importantly, only about 20 per cent think it’s unlikely that they’ll bring on new suppliers in their 5G builds.

What’s been holding back operators from introducing new vendors to date? From integration issues to corporate culture and tepid RoI expectations, a plethora of considerations keep incumbents in place. But the number one factor conspiring against new suppliers? Network security concerns. If trust is the issue Huawei is looking to solve with a potential licensing scheme, it seems well-aligned with operator thinking around new suppliers.

Who would license Huawei’s 5G know-how?
Of course, before any product based on Huawei’s 5G assets gets built, there would need to be an interested licensee. On this front, two factors come into play: costs and future R&D.

It’s no major insight to note that a 5G licensing agreement with Huawei would find many more takers if priced at US$5 million vs. US$5 billion. But given the investments (time and money) Huawei has already made in 5G, it’s likely that the vendor would be looking for something closer to the latter sum. And there are only so many companies who would be interested and able to pony up that amount of money.

Start-up 5G infrastructure players? The cost would be prohibitive.
Incumbent 5G infrastructure players? They aren’t exactly flush with cash and the marginal value of additional 5G assets would be questionable.
Webscale and enterprise players? This might make more sense: they’ve got money and 5G solutions could play into virtualisation and enterprise digital transformation trends.

But then there’s the question of future R&D.

If Huawei is only offering up its current patents, code and processes, any licensee would need to be ready to invest heavily in future development. Huawei will certainly be investing on this front; any third party products based on a Huawei license circa 2019 will quickly be uncompetitive without similar investments. This is probably the biggest sticking point in the plan. Given Huawei’s R&D scale, it’s unclear that a licensee could keep their offer competitive going forward. And if the goal is to assuage government fears over security, there’s no real assurance that Huawei won’t alter its code going forward in a way that isn’t transparent – or that third party licensees could be trusted.

Presumably, Huawei and its CEO know all of this and understand the slim odds of this actually moving forward. If so, then the licensing proposal needs to be looked at from a different perspective. Rather than looking at it as a clear, easy, workable solution, it needs to be seen as an attempt at a solution. It might not be a great (or even viable) solution, but it’s a signal that Huawei – in the middle of a seemingly intractable problem – is actively looking for ways to get past current trust concerns and potential geo-political technology splintering. That’s got to be worth something.

– Peter Jarich – Head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Is Germany ready for IFA tech?

Europe’s largest consumer technology show, IFA 2019, has wrapped up for another year in Berlin. Although the show is based in Germany, its focus is global. That said, it is important to understand that while the show is global in scope, local market conditions are an important factor in any analysis of emerging technologies and trends.

So, let’s look at the German market, both because it is the host country and to draw attention to the uniqueness of Germany in the global consumer electronic market landscape.

Most consumer tech ecosystem players were on hand to showcase their latest creations, platforms, and products, giving press and the public a glimpse at the future of connected homes, entertainment, transportation, the latest in gaming technologies and, of course, the latest smartphones. Among announcements from nearly all major consumer electronics brands, several key themes emerged which showed what consumers can expect in the near future, both in Germany and globally.

The next-generation technology was omnipresent at IFA 2019. Discussions around the impact of 5G in 2019 have increased relevance, as numerous countries have launched services this year. And no two companies were more passionate in evangelising the advent of 5G than Huawei [1] and Qualcomm [2] in their respective opening keynotes.

While Huawei emphasised the all-encompassing power of 5G to connect everyone and everything, Qualcomm was eager to note the potential for fixed wireless access (FWA) that could be positioned to eventually replace traditional wired broadband internet configurations in the home and in the workplace.

The potential of 5G to replace fixed broadband is good news for operators and consumers alike: as household devices are increasingly connected, the bandwidth and speeds offered by 5G can enable a seamless smart home (or workplace).

And what does Germany look like on this front? Brand new data from the GSMA Intelligence 2019 Global Consumer Survey suggests only 21 per cent of German consumers intend to upgrade to 5G when it becomes available. Moreover, any attempt to transition to FWA 5G in the home will face fierce competition from legacy players in the fixed broadband market. To generate interest, some operators are considering bundling 5G services with IoT or gaming to entice consumers. Unfortunately, this initiative may have limited impact: found that in Germany, only 10 per cent of consumers would be likely to invest in a 5G subscription if IoT devices were bundled with the offer.

Nevertheless, one clear takeaway from IFA 2019 is that 5G is not only on its way, it is here to stay. Consumers can expect the rapid proliferation of 5G enabled devices in 2020 and beyond.

Ubiquitous connectivity in the home
IFA 2019 is a showcase for connected everything: washing machines, ovens, dishwashers, vacuums, and even a connected closet from Samsung. While each vendor in Berlin seemed fully invested in connected devices in the home, the Consumer Survey data indicates the German market is actually among the slowest to adopt connected smart home devices (see chart, below, click to enlarge).


While in markets such as the UK and the US, connected devices hover around a 50 per cent adoption rate, ironically, Germany, the host of IFA 2019, lags significantly behind. Among the reasons cited by German consumers for their reluctance to adopt connected devices in the home are privacy and security concerns (31 per cent), and a lack of understanding of the value of connected devices (54 per cent). Given consumers privacy concerns and their overall indifference to the smart home, vendors will have an uphill climb in growing the smart home market in Germany.

Another significant takeaway from the chart is that across all the markets shown, adoption of smart home devices has stagnated year-over-year, with no new uptake since 2018. This raises some concerns for vendors at IFA and beyond, which have invested heavily in their “connected everything”.

Digital assistants
[4]The slogans “works with Google Assistant” and “works with Amazon Alexa” may well be my most lasting impression of IFA 2019, mirroring the experience from CES for many people. These slogans were emblazoned across a seemingly unending array of product types, from coffee machines, to dishwashers, televisions and clocks.

When I asked Amazon if it hoped Alexa would be the default access point for connected devices inside and outside the home, my question was met with some equivocation. Yes, basic functionality could be accessed with Alexa-enabled devices, but for more granular instructions to different devices, the proprietary application included with the device in the home would need to be used. The fundamental problem here is obvious: as these connected devices proliferate, each with their own associated application, it will become extremely unwieldy to sort through a dozen applications to find the controls for the device or appliance that a consumer is looking for. This constitutes a major customer pain point.

Furthermore, there is the issue of a digital assistant usage patterns. Our survey showed the proportion of users accessing their digital assistants on a daily basis is, with the exception of the US, very low (see chart, below, click to enlarge).


For digital assistants to become the portal through which a consumer accesses connected devices, these numbers will need to increase in the coming years, which will perhaps be the inevitable consequence of the increasing number of partnerships between Amazon, Google, Apple and ecosystem vendors, as they embed their digital assistants into a multitude of new products.

Final word
As planned, IFA 2019 had something (insights, at least) for everyone. For operators, the prospect of FWA 5G as an alternative to fixed broadband is an enticing new revenue opportunity. For ecosystem vendors, while there remain significant hurdles in adoption for “connected everything”, the industry is nonetheless pursuing this objective, even in markets which are more resistant to new technology adoption such as Germany.

For us at GSMAi, IFA provided a lens through which to view our 2019 Consumer Survey results: look for more from that soon.

Jason Reed – lead analyst, Consumer and Survey Insights – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief:What will make 5G take off in LatAm?

[1]With 18 5G trials across the region to-date and a live 5G-ready network (Fixed Wireless Access) in Uruguay there is a fair amount of 5G activity in Latin America (LatAm). Despite these developments, the reality remains that LatAm will lag behind most regions in the world with a conservative 8 per cent adoption rate by 2025 (see chart above right, click to enlarge. Source: GSMA Intelligence. *Developing APAC excludes China).

LatAm is a large region with a mix of developing and developed markets that can behave as highly volatile economies. Thus, the future of 5G in this region will predominantly lie in the hands of its macroeconomic trends, the life that is still in 4G and the policies its governments set out to create opportunities for investment.

Macro impacts versus 4G
Stagnating economies and hyperinflation make it difficult to justify 5G investment.

Argentina saw a 27-year high inflation rate reaching 47.6 per cent in 2018, while in Venezuela hyperinflation will likely reach 10 million per cent by year-end 2019. Brazil seemed to be the poster boy for LatAm in the early noughties as a fast growing developing market, leading to a boom in foreign investments in the market. But limited progress in adoption of economic reforms caused a deceleration in the economy and slowdown in foreign investments.

These developments, together with mobile service and device taxation, represent a fair indication of consumer purchasing power. Income levels and affordability of newer (and 5G) devices will be likely hampered as a result. Current mobile device pricing as a percentage of GDP per capita is already high across the region, not only in the expected smaller countries but also in the larger economies. Whereas device cost as a percentage of GDP per capita lies at 0.1 per cent in UK and US for instance, it is 2 per cent in Bolivia and Brazil, and 1 per cent in Argentina.

There is still a lot of life in 4G – this is good news!

Whilst those macro impacts have partially resulted in slow LTE growth to-date (44 per cent adoption rate, Q2 2019), MNOs in LatAm are still working on network performance and deployment of 4G and 4.5G.

With 4G still growing, it will remain the dominant technology in the long-term (67 per cent by 2025) and until after 5G is launched. There is a gap of >10 percentage points between smartphone adoption versus 4G adoption rates (2019). This creates an upsell opportunity to operators especially now that 3G pricing has completely vanished from LatAm, allowing for 4G investments to be recouped over the next few years.

Spectrum, spectrum, spectrum – yes we need to talk about it!  
Ok, so 4G still has a lot going for it but we need more spectrum. With consumer readiness in place – nearly 90 per cent of mobile subscribers are mobile internet users – what is lacking is sufficient spectrum dividend per operator i.e. volume of MHz per operator. This remains low in LatAm, impacting network performance (up/download speeds).

With the ignition of 5G, governments and policy makers have the chance to reform policies and help foster investment and innovation in their markets.

To take an example from the largest economy in LatAm, spectrum dividend fares very low in Brazil with almost no change over the last four to five years, according to the Mobile Connectivity Index (MCI [2]). This has impacted network performance over time, keeping Brazil at an “emerging” market level in this category. Any upcoming auction will need to allow for sufficient spectrum dividend as well as consider auction fees and coverage obligations.

Vendors seek opportunities in Brazil
Brazil’s upcoming spectrum auction could potentially become the largest in the world: the national regulator (Anatel) is currently consulting on the 2.3GHz, 3.5GHz frequency tenders next March. There is speculation amongst vendors that 26GHz and 700MHz could be added to the same auction, making it the world’s biggest 5G auction to come. This not only would attract all eyes on Brazil but also could provide higher spectrum dividend per operator, allowing network performance improvements. Further testimony to vendor optimism is Huawei’s plan to invest in an $800-million-dollar factory in Brazil for the rollout of 5G.

With Brazil the obvious foster child, where else in the region can we turn to for opportunities?

Outside of the larger economies, in Peru 4G adoption rate is forecast to reach 73 per cent by 2025 and 4G availability[1] [3], measured by Open signal, shows an impressive reach in excess of 80 per cent. GSMA Intelligence forecasts show a fair growth for 5G by 2025 with 6 per cent adoption (with affordability of mobile services, relevance and availability of local content all faring well in Peru). Further, with growing competition operators have started investing in LTE-Advanced and the majority of upgrade deployments took place across 2018.

But where will 5G use case opportunities sit for LatAm?

5G use cases remain a significant discussion point across many major markets, with the top use cases evolving around enterprise, enhanced Mobile BroadBand (eMBB) and Fixed Wireless Access (FWA) in Europe, US, and China. In LatAm, two in particular could become successful.

Considering low fixed broadband penetration rates, FWA could take up well as it poses an opportunity to replace low bandwidth xDSL and in smaller range spaces, e.g. production plants and hot spots, as well as reach the unconnected.

Further, eMBB could make a good use case considering the high number of mobile internet users in the region as percentage of mobile subscribers, as discussed earlier. Additionally, per smartphone, Ericsson forecasts mobile data traffic growth of 481 per cent in LatAm to year 2024, reaching 18GB per month.

But what is indisputable for 5G success in LatAm is the need for adequate infrastructure, which includes sufficient spectrum as well as tax reforms to support 5G New Radio. Without that, 5G will be a 4G déjà vu.

– Armita Satari, Analyst – Core Mobile Research,  GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] This is not equivalent to population penetration. Instead, Opensignal measures the real-world experience of consumers on mobile networks.


Intelligence Brief: Why nationwide fibre is the ‘backbone’ of India 5G aspirations

With India electing a new government to power, the vision of a Digital India has been given a renewed focus, but with more vigour. All stakeholders are now forging ahead to turn the dream of 5G by 2020 into a reality. Fibre backhaul, in particular, is expected to be one of the key enablers for 5G in India. Its deployment will remain critical to successful 5G rollout, but this journey will not be a smooth one.

As mentioned in an earlier blog  – Will India get 5G in 2020? [1] – the lack of required infrastructure is a major challenge to 5G rollout in India. To that end, it’s worth understanding the Indian fibre story to date.

Where does India stand today?
According to the National Digital Communication Policy 2018, India enjoyed 22 per cent of fibre coverage between the towers as of March 2018. In order to extend world class high-speed internet connectivity, around 75–80 per cent of mobile towers will have to fiberised; this is the case in markets like the US, China, and Japan. Even getting to a 60 per cent milestone by 2022 (which some consider the bare minimum for the satisfactory delivery of 5G) means there is clearly a long way to go.

[2]India’s leading telecom operators are committed to invest in fibre; Jio leads the pack followed by Vodafone-idea and Airtel. The government, in turn, has already taken initiatives (most notably BharatNet) to connect the deep rural pockets with fibre. Earlier known as National Optic Fibre Network (or NOFN), BharatNet was conceived with a specific aim to connect nearly 600,000 villages and eventually enable them with commercial internet access.

Evidently, efforts are being made, BUT…

Indian problems
While the necessity of fibre deployment for 5G is obvious, there is no shortage of challenges which will conspire to keep the pace of rollout slow: terrain hurdles, differing right-of-way norms across states, quality & maintenance issues. All of this is compounded by limited clarity on active network equipment sharing between the operators.

Of course, there’s also the issue of cost. Fibre deployment is expensive and comes on top of spectrum costs – which could be high given a mega 5G spectrum sale (275 MHz) coming up. And this is when Indian telcos are already saddled with a staggering debt of USD62 billion[1] [3] as of March 2019.

Clearly, the hurdles are there but as a worthy mind once said, “where there’s a will there’s a way.” And to find its way through these roadblocks, it’s time for India to look into a few nation-wide fiberisation models pursued across the globe and learn what can help India convert this digital dream into a reality.

Predominant models of fiberisation:
Based on research, predominantly five broad models of nation-wide fiberisation emerged across the globe. The models on the top of the chart below (click to enlarge) are considered more successful by some, as they mobilise public-private partnerships in such a fashion that they tend to be more conducive to faster and sustainable expansion of the fibre network to even the deepest pockets of the nation, yet remaining viable for operators to survive financially.


Unregulated Private investment: In this model, service providers are free to invest in fibre where they deem it profitable. There is little to no regulatory pressure to unbundle to competitors, and regulated prices are not enforced.
Incumbent-led, graded government support: In this model, the incumbent operator, usually still with a tangible government investment stake or a high level of influence, is mandated to roll out an extensive national fibre network. Public money is involved directly or indirectly, and some regulation is applied to create a competitive environment.
Private-led, graded government support: While similar to the above model, the government in this model distances itself from the incumbents. Importantly, the government drives and partially funds a national fibre agenda through all the players in the market.
Government-controlled fibre: In this model, the government takes a full hands-on approach to creating and, in some cases, operating a national fibre network. The agenda behind this is open digital economy, and the objective of policy and regulation is to openly offer and possibly transfer the infrastructure to the communication service providers in the country for commercial service operation.
Private investment with heavy regulation: With its focus on private investment, this model assumes strong competition and easy access to financing. Further, this model then applies open access and regulated price controls so that other, usually smaller, operators can offer services without the burden of heavy infrastructure investment. The intent is to induce considerable infrastructure competition that drives low prices for highly specialised services.

What makes sense for India?
For efficient asset management, Indian operators are already taking noteworthy steps to rationalise the capex required to lay fibre:

Bharti Airtel and Vodafone-idea have spun off their fibre assets to separate entities respectively, to monetise the fibre. They have also been discussing the potential to share their respective fibre networks by creating a joint venture.
Jio is in the process of demerging the fibre assets into a separate company which could then be monetised through an investment trust (InvIT) structure. As of now, they plan to keep the 15 per cent share while potentially selling the remaining 85 per cent to five global investors, including Qatar Investment Authority and Canada Pension Plan Investment Board.

While a case can be made for all the models in India, a “Private-led, graded government support” model suits the most. This resonates with the recent recommendation by TRAI (Telecom Regulatory Authority of India), especially for extension of internet and fibre networks to rural India. Subsequently, DoT has recently proposed to tie-up with the country’s three private operators to ensure connectivity to every India village. DoT plans to work with the private operators by providing 100 subsidies on Capex incurred on extending the connectivity to 43,000 disconnected villages, and have also agreed to subsidise the operating costs for the next five years.

Finally, to tackle the biggest bottleneck – RoW (Rights of Way) – the right policies for permits is a must. There should be cooperation between central and local authorities, where the centre could help in resolving issues like enforcing advance notification of civil works for infrastructure deployment (e.g. road, sanitation, energy, telecoms) and creating a single point of information for granting permits. The state government on the other hand should change its approach to take a proactive stance on dealing with the RoW issues and treat the RoW approvals as social-economic enablers instead of a direct revenue source.

Bottom line – A lot is being done to make 5G a reality, but adequate infrastructure remains the most essential piece of the puzzle in order to become truly ready. Hence, it is important for the operators to continue to invest in additional fibre deployments as building blocks for 5G.

– Aryan Jain – Research Manager, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] [5] Source: Crisil


Intelligence Brief: Why are the days of IoT numbered?

Last week, IoT blogger and journalist Stacey Higginbotham tweeted a fairly innocuous query. “Serious question: Do you think a printer is an IoT device?” What resulted was a prime example of Twitter at its best. Across a few days, the tweet generated an impressive conversation. It generated decent insights, some funny retorts, musings on whether or not hot dogs qualify as sandwiches and a marginal share of utter nonsense. Oh, and it wouldn’t be Twitter without a sprinkling of well-worn memes.

Serious question: Do you think a printer is an IoT device? If no, what would you call it?
I feel like this is kind of a “Is a hot dog a sandwich?” question.

— Stacey Higginbotham (@gigastacey) August 6, 2019 [1]

Reviewing the responses, there were a number of common themes about how to define an IoT device. Some make sense. Some don’t. In the end, however, they provide a clear explanation for why, at some point in the not-too-distant future, we will cease talking about IoT as market segment.

Understandably, this last comment (the end of IoT as we know it) might seem a little startling. In any case, I’ll return to it. Promise. But, first, let’s look at some of the arguments made around printers and IoT which hold water.

Connected versus not connected. This is an easy one. Without some form of connectivity, you don’t really have a network, internet or otherwise. You simply have a thing.

Connection: internet or local. This one is a little tougher. A number of folks said the device had to be reachable over the internet. The public internet. If you are taking the I in IoT literally, this makes sense. But, if you are thinking about real-world use cases, then there are many IoT devices we’d never want touching the internet. Industrial modules and devices, for example, which are mission-critical and don’t need to be accessed by anyone outside the enterprise. They might form part of a local, regional or global network, just not be connected to the internet. Do we discount those?

Connection: wireless against fixed. This is another easy one. Some of the replies to the original question argued that a Wi-Fi or Bluetooth connection would make the printer an IoT device. A wired connection, however, would mean that it’s not. This is silly. While (networked) connectivity is critical to IoT, the type of connectivity shouldn’t be. There are plenty of sensors that we’d consider part of IoT that are connected with wired media. And there are plenty of IoT use cases which may require the performance (latency, bandwidth, coverage) of wired connections. Industrial automation via 5G? Yep, it’s commonly cited as an IoT use case. But if it needs to be done with a wired connection? Would that mean it’s not IoT?

Existing or new creation. Among the answers to Higginbotham’s query was: “Printers have existed as a category of devices for years, long before IoT came into being”. For some, this simple fact removes printers from the realm of IoT. In theory, the same should hold for smart TVs, connected cars, and fitness trackers (anyone remember the pedometer?). The legacy, or age, of a device category doesn’t make sense as an IoT qualifier.

General purpose or single function. In an effort to deal with things like tablets or smartphones (which most people wouldn’t count as IoT), the multi-purpose nature of a device was suggested as an IoT litmus test. With sensors, smart locks and location trackers in one camp (IoT) and PC-like devices in another (not IoT), it works. Now, throw in smart watches, smart TVs (with app stores), or multi-function printers, and it gets a little fuzzier.

Hackable to mine cryptocurrency. Okay, this was my favourite. While obviously tongue-in-cheek, there are a few implications here: connected, running an OS of some sort, open to security threats. Pretty comprehensive and elegant if you think about it.

Regardless of how you categorise connected printers, or how you define IoT, there’s a bigger-picture message here. The definition of what’s included in the IoT is not black or white. It’s fluid. And, it’s going to get even more fluid as time goes by and we connect legacy categories of devices, we connect things with all manner of access technologies and we stop thinking about whether or not something is connected at all, because almost everything that can be connected will be.

I understand that this won’t be happening any time soon. But when it does, IoT will simply be part of how we run our businesses and daily lives.

Does that mean IoT will cease to exist as a distinct concept? Yes. Connectivity and analysis of things will continue, but will simply be part of the fabric of our businesses and everyday lives. For many people, this is already the case. As a colleague recently suggested, the winemaker using sensors and a wireless network (public or private) to monitor grape production doesn’t call what they’re doing IoT, it’s simply modern farming. Of course, for anyone marketing, selling, and writing about IoT, this might seem sad. It’s not. It’s a sign that IoT will finally have achieved its full potential, backed by the access technologies, platforms, silicon, and analytics solutions being deployed and perfected today.

– Peter Jarich – head of GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.


Intelligence Brief: Will sub-Saharan Africa get 5G?

Sub-Saharan Africa has been conspicuously missing from the global 5G story so far, and for good reason. 2G is still the dominant technology in the region, at least until the end of this year, while 4G, which accounts for just 8 per cent of total connections compared to the global average of 46 per cent, is far from mass adoption. There is also the issue of device affordability, which has stymied 4G adoption. With the first wave of 5G devices likely to target the top end of the market, it is not hard to imagine the impact device costs could have on 5G adoption in the region.

Against this backdrop, it is easy to see why the notion of 5G in sub-Saharan Africa may come across as an oxymoron to some people. But is it? 5G attracted a lot of attention at this years’ Mobile360 Africa [1] conference, with numerous mentions on the conference stage and side chats during coffee breaks, even though the subject was not officially on the agenda. I quickly noticed that more people talked about the prospects for 5G in the region at this year’s event, compared to 2018, where 5G and Africa were hardly used in the same sentence.

So, what has changed? Nothing much in terms of Africa’s readiness for 5G or actual 5G-related activities. However, there was a realisation that 5G, as a natural progression from previous generations, will one day become a reality in the region. This in itself raised several pertinent questions among participants, for example when will the 5G era will arrive in the region; which markets will lead the transition to 5G; how should stakeholders, including policymakers, operators and vendors, prepare for the 5G era; and what would the 5G the business case for the region look like, given the network deployment requirements and consumer peculiarities?

An earlier blog [2] captures the contrasting views of operators and vendors to some of these questions at the event.

GSMA Intelligence’s new report 5G in Sub-Saharan Africa: laying the foundations [3] directly addresses these other issues more deeply. The report reflects the perspectives of policymakers, operators, and vendors, and lays out key expectations and considerations for the 5G era, some of which are highlighted below:

5G mass deployment and adoption is not likely until the second half the next decade – Most people agree that 5G in Africa is a question of when rather than if. However, it will not be until mid to late 2020s before 5G network deployment and adoption becomes more widespread across the region. Only a handful of countries, including South Africa, Kenya and Nigeria, are expected to have commercial 5G services before 2025 (see chart, below, click to enlarge).


Enterprises will lead 5G adoption in Africa – 5G will play a key role in addressing the connectivity needs of enterprises, given the challenges around access, cost and reliability of existing solutions, such as fixed broadband and satellite. However, deployments will need to be localised and targeted, as opposed to ubiquitous and mass market, considering the cost implications for the requisite cell densification. Beyond connectivity, 5G can enable new business processes to drive productivity and efficiency in closed ecosystem environments, particularly in large, consolidated sectors such as mining and manufacturing. However, our research shows a lack of awareness and understanding of the potential of the technology among enterprises. For operators and their vendor partners, the challenge will be to increase awareness and develop relevant use cases.
The consumer segment will be a long-term play – Affordability will be a crucial factor for 5G adoption in the consumer segment. At around $1,000 on average, the cost of 5G handsets today is way beyond the reach of most consumers in the region. While this is expected to fall over time, it is not certain when the market will see sub-$100 devices, the price point at which mass adoption can begin to take place, given the experience of 4G. Meanwhile, immersive use cases such as AR and VR, for which 5G’s low latency capability is well suited, are still underdeveloped in the region. This means that 3G and 4G will remain the primary consumer mobile broadband access technologies for the foreseeable future.
Ecosystem collaboration will be essential to ease the transition to 5G – Given the cost burden of network deployment and the need to address consumer barriers to broadband adoption, our research identified four areas where ecosystem collaboration could facilitate the transition to 5G. These are: content creation to stimulate demand for connectivity; solutions for cost effective network deployment; initiatives to bring affordable devices to market; and development of 5G use cases for local enterprises. Take network deployment, for example, operators could collaborate on active network sharing, which has been shown to deliver much higher levels of both capex and opex savings compared to passive. Vendors can also explore new ways of financing network investment, such as the lease-to-own-model, to reduce the upfront capital outlay for operators.

As governments and enterprises across Africa increasingly use technology to tackle the biggest challenges faced by society, and digital trends point to growing demand for enhanced connectivity, 5G will no doubt play a key role in the future connectivity landscape. The technology will support the implementation of transformative technologies, such as AI and IoT, that can improve industrial processes and generate significant social and economic benefits for individuals and communities.

While this scenario is still several years away for most countries in the region, now is the time for ecosystem players including policymakers, operators and vendors, to begin to put in place the necessary building blocks on spectrum, network modernisation, consumer and enterprise use cases, and other relevant areas to maximise value in the 5G era.

– Kenechi Okeleke – senior manager – GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.