LTE networks light up in Saudi - Saudi operators announce next-generation network launches using TD-LTE technology

Saudi Arabia's three main operators have all launched commercial LTE networks in the last few weeks, with each claiming to be the first in the region to go live with the next-generation mobile technology.

State-controlled STC, Etisalat-owned Mobily and Zain KSA all announced LTE launches this month as part of their existing mobile broadband offerings. CITC, the Saudi regulator, estimates that mobile broadband connections in the country hit 11 million in H1 2011, representing 39 percent population penetration. Over half (7.4 million) of these subscriptions related to dedicated data devices such as modems and dongles.

In all three cases, the operators are deploying the unpaired time-division version of LTE (TD-LTE), as the country’s military owns much of the spectrum required to deploy in the more common paired FDD-LTE bands. This makes Saudi Arabia only the second market in the world to deploy TD-LTE on a commercial basis following an earlier launch by the small Polish operator, Aero2. However, TD-LTE is soon to be rolled out by its main sponsor China Mobile, the world's largest mobile operator.

According to recent GSMA Intelligence forecasts, Saudi is expected to account for more than half of all LTE connections in the Middle East by 2015. By this point, the Middle East is forecast to have over 16 million LTE connections, accounting for about 5 percent of the global total.

Among the Saudi operators, Mobily provided the most detail on its LTE rollout plans. The operator has switched on the TD-LTE network initially in six cities via its 'Bayanat al oula' subsidiary: Najran, Jazan, Al Kharj, Ras tanoura, Algurayat and Aldudamy. This is to be followed by launches in a further four cities by the end of September, and then to the country's largest cities - Riyadh, Jeddah and Damamm - by the middle of November. Mobily is aiming to cover 32 towns and cities in total, which will cover about 85 percent of Saudi's 27 million population. LTE-based services are being marketed as 'Connect 4G' and will be initially available as part of the operator's 'BroadBand@Home' service.

In February, Mobily announced it had awarded two contracts worth SAR450 million (US$120 million) to vendors Samsung and Huawei to build the new network. It also became a member of the China-based Global TD-LTE Initiative (GTI) in July.

Rival Zain has switched on LTE services in Riyadh, Jeddah and Damamm, claiming to support peak speeds of up to 150Mb/s. It plans to expand the network to all of the Kingdom's major cities by the end of 2012. Meanwhile, information about STC's rival offering was supplied by its vendor, Nokia Siemens Networks (NSN). STC's TD-LTE network has launched in three (unspecified) cities in the western part of the country and is accessed via NSN-made dongles. Services form part of STC's 'QUICKnet' mobile broadband offering. According to the latest GSMA Intelligence data, STC led the Saudi market in Q2 on 24.5 million connections, though it continues to face fierce competition from Mobily, which ended the quarter on 22.1 million. Third-placed Zain – which launched in 2007 – is also becoming a major player in the market, growing its connections base by 32 percent year-on-year to 9.1 million in Q2, and recording the highest quarterly net additions of the three operators in Q2 (682,000).

The market maintained double-digit connections growth year-on-year (13 percent) even though market penetration is calculated at almost 200 percent. This high mobile penetration rate reflects both the high levels of multiple SIM/device ownership and the large migrant population in the Kingdom. According to government figures, over a quarter of the population are non-Saudi residents.

Matt Ablott, Senior Editorial Analyst, GSMA Intelligence:

The three-way race to be the first in the region to launch LTE demonstrates a healthy level of competition among the Saudi operators. This is notable for a market that was a monopoly as recently as 2005. Mobily – which broke STC's monopoly when it launched six years ago – has already established itself as a technologically advanced player, launching HSPA back in 2006 and HSPA+ in 2009. This focus on mobile broadband has helped it grow to command a healthy 40 percent of the market – so early migration to LTE appears in keeping with this strategy. However, in the rush to claim a PR victory with the Kingdom's first launch, none of the three operators have been able to provide much detail on pricing and device availability, so it remains to be seen how each operator will position their respective services. Meanwhile, from a technology perspective, the market will provide an interesting test-bed for single-band TD-LTE prior to the larger-scale deployments of the technology in India and China. The biggest barrier to widespread adoption will be the availability of devices, of which there are only a few for TD-LTE - with compatible handsets (rather than dongles and modems) not yet on the market. In the case of STC, its vendor NSN has dipped its toe into the device manufacturing business in order to provide compatible products.

Saudi Arabia mobile connections & LTE launch plans; Q2 2011
Source: GSMA Intelligence