By Gerry Blackwell<\/p>\n\n\n\n
April 24, 2009<\/p>\n\n\n\n
While operators in “the MEA market” may be very tightly focused for now on using WiMAX for fixed broadband, there is nothing stopping them planning for a future when mobile broadband becomes feasible and demand emerges.<\/p>\n\n\n\n
In the\u00a0fourth installment of\u00a0our series\u00a0<\/a>on WiMAX around the globe, we look at the potential WiMAX has in the Middle East and Africa.<\/em><\/p>\n\n\n\n Making generalizations about \u201cthe MEA market\u201d\u2014the Middle East and Africa\u2014is clearly fraught with peril, no more so than when discussing WiMAX in the region. But we must be brave.<\/p>\n\n\n\n Notwithstanding Sarah Palin\u2019s alleged understanding of the matter, Africa is not a country, but a continent, with 50-odd independent nations, many of them small, developing economies\u2014some not developing very fast, and a few (think Zimbabwe) going in the wrong direction.<\/p>\n\n\n\n The Middle East, of course, has its own unique diversity, and is geographically, culturally and economically a vastly different proposition from sub-Saharan Africa.<\/p>\n\n\n\n So what can we reasonably say about WiMAX in the region? We can say that it\u2019s well-established in both the sub-Saharan and North Africa\/Middle East sectors.<\/p>\n\n\n\n Rethink Technology Research Ltd., a UK-based firm that studies the market, counts 88 significant operators actively deploying WiMAX across the region. And that doesn\u2019t count small independents offering service in a few villages.<\/p>\n\n\n\n \u201cIt\u2019s difficult to count,\u201d admits Rethink research director Caroline Gabriel. \u201cBut there tends to be two or three [operators] per country, more in larger, advanced countries. Kenya has about six, for example. And there are more in Uganda and South Africa.\u201d<\/p>\n\n\n\n WiMAX activity is generally concentrated exactly where one might expect\u2014Egypt, Saudi Arabia, Nigeria, Kenya, Uganda, South Africa. But there are some \u201cslightly surprising\u201d pockets of relatively intense activity in other areas, as well.<\/p>\n\n\n\n While many operators in the region are start-ups, more than a few are multi-nationals with pan-regional aspirations. Some of those are native to the MEA, such as MTN in South Africa and, at the other end of the continent, Orascom Telecom in Egypt. Both are cellular providers first, WiMAX operators second.<\/p>\n\n\n\n European-based multi-nationals\u2014France Telecom\u2019s Orange and UK-based Vodaphone, for example\u2014are also intent on gaining a foothold in the region, and in some cases they\u2019re using WiMAX to help them do it.<\/p>\n\n\n\n France Telecom has done a fair amount in relatively poor west African countries, such as Senegal and Ivory Coast, with which it has colonial ties. \u201cNone are big economies but together they make a sizeable block,\u201d Gabriel notes.<\/p>\n\n\n\n The multinationals often acquire local operators with 2G licenses to gain a foothold, but WiMAX is also an easy way for them to get their feet wet because 3.5 GHz licenses are generally very inexpensive, she points out.<\/p>\n\n\n\n But despite lively competition, or at least jockeying for position, the market remains small.<\/p>\n\n\n\n Gartner reported in November that WiMAX equipment vendors generated revenues of just over $75 million in the MEA region in 2007. Revenues will grow to $367 million by 2012. There were about 160,000 WiMAX subscribers in 2007, with Gartner expecting that number to grow to 6.94 million by 2012.<\/p>\n\n\n\n Such is the poverty of most of the region that growth rates are actually slower than in more developed regions\u2014despite the fact that WiMAX should have, and does have, particular appeal here for the same reasons it does in other under-developed parts of the world.<\/p>\n\n\n\n Eastern Europe, for example,\u00a0which we looked at last month<\/a>, embraced WiMAX because it lacks up-to-date wireline infrastructure for broadband. It\u2019s cheaper and faster for those countries to catch up using wireless technologies. Much of the MEA region, meanwhile, lacks wireline infrastructure of any kind, so WiMAX could be even more important here.<\/p>\n\n\n\n In sub-Saharan Africa especially, copper infrastructure may never be deployed. In countries where governments and companies tried to do it, theft of cabling, even buried cables, was a problem, says Noel Kirkaldy, Motorola Corp.\u2019s manager of direct solutions marketing for the region.<\/p>\n\n\n\n The absence of wireline voice in much of Africa has now been or is rapidly being addressed, with incumbents, new start-ups and foreign multi-nationals building 2G and\u2014to some extent, especially in the Middle East\u20143G infrastructures.<\/p>\n\n\n\n As Kirkaldy notes, building a cell site and posting a security guard makes more sense in poor and often lawless countries than laying copper which can\u2019t be guarded and could be ripped up the next day. That advantage obviously extends to WiMAX too.<\/p>\n\n\n\n That there is considerable pent-up demand for wireless communications is clear. One new entrant in the Ugandan cellular market, Warid Telecom, the subsidiary of a Middle East-based conglomerate, claims it reached one million cellular subscribers in just eight months last year. Warid is also deploying WiMAX in the region.<\/p>\n\n\n\n \u201cA lot of markets in Africa are saturated for voice now,\u201d Kirkaldy says. \u201cSouth Africa has gone over 100%. But less than 5% [across the region] have broadband data. That\u2019s the nature of the digital divide here.\u201d<\/p>\n\n\n\n So it\u2019s also fair to say that, virtually everywhere in the region, WiMAX is being used primarily for \u201cwireless DSL\u201d\u2014to deliver fixed and nomadic broadband data connectivity, not mobile broadband. This will remain true for at least the next several years, for both regulatory and economic reasons.<\/p>\n\n\n\n First, WiMAX is being deployed almost exclusively over 3.5 GHz spectrum because it\u2019s the only licensed spectrum available in virtually all jurisdictions.<\/p>\n\n\n\n Delivering mobile broadband over 3.5 GHz is not impossible, Gabriel notes. But you need more cell sites, so it\u2019s only economically feasible in densely populated urban areas. \u201cAnd a lot of areas in this region are neither dense nor urban,\u201d she points out.<\/p>\n\n\n\n Even where they are, demand for mobile broadband beyond what 3G could deliver will remain weak for a long time simply because economies are poor and undeveloped, and income levels low.<\/p>\n\n\n\n Many jurisdictions do not in any case permit WiMAX to be used for mobile broadband. Regulatory policies, as might be expected, are all over the map. Some jurisdictions do not even allow WiMAX to carry VoIP, Gabriel notes. (Although many do and, according to Kirkaldy, VoIP is \u201ca table stakes application\u201d for operators.)<\/p>\n\n\n\n Some countries, notably the bellwethers in both sub regions\u2014South Africa in sub-Saharan Africa, and Saudi Arabia in the Middle East\u2014talk a good line about removing restrictions, but progress is slow.<\/p>\n\n\n\n \u201cTo make the Middle East really move on WiMAX, you need Saudi,\u201d Gabriel says. \u201cSaudi will set the pace, and it\u2019s very ambitious\u2014but also incredibly bureaucratic.\u201d The situation is similar in South Africa. \u201cThere\u2019s a big gap between intention and reality.\u201d<\/p>\n\n\n\n Nor are governments likely any time soon to allocate 2.5 GHz spectrum, which is more suitable for mobile broadband. Gabriel estimates it will be \u201cthe middle of the next decade\u201d before governments in most of the sub-Saharan region get around to 2.5 GHz allocations, and not much sooner in the Middle East.<\/p>\n\n\n\n That isn\u2019t stopping some operators deploying 802.16e WiMAX equipment which more easily enables mobile services. Motorola, for example, only sells 16e gear, and it has had success even in some relatively poor sub-Saharan countries. (Motorola is also strong in the Middle East, with a major deployment by Etihad Atheeb Telecom in Saudi Arabia, and another announced recently with Mada Communications in Jordan.)<\/p>\n\n\n\n As Gabriel and Kirkaldy both point out, while operators may be very tightly focused for now on using WiMAX for fixed broadband, there is nothing stopping them planning for a future when mobile broadband becomes feasible and demand emerges.<\/p>\n\n\n\n The only mobile angle in the meantime is the potential for WiMAX to provide 2G cellular operators with a data overlay network, an approach that will become more attractive as dual-mode devices proliferate.<\/p>\n\n\n\n \u201cThat\u2019s an increasingly common model\u2014dual-mode WiMAX and GSM,\u201d Gabriel says. \u201cBut it\u2019s primarily geared to urban markets in bigger African economies, and also Russia.\u201d<\/p>\n\n\n\n And it\u2019s still the exception in the MEA region, she adds. Most roll-outs are straight wireless DSL plays.<\/p>\n\n\n\n They are also mainly targeted at business users. Most consumers simply can\u2019t afford broadband. Where ARPU (average revenue per unit) runs in the $2 to $3 range, it doesn\u2019t make sense for most WiMAX operators to make a consumer play, Gabriel points out.<\/p>\n\n\n\n WiMAX, in fact, could help revolutionize the way companies do business in developing countries by enabling mobile Web services. \u201cThat\u2019s where the opportunity comes for Africa,\u201d Gabriel believes. \u201cThe emergence of Web services and cloud computing as a new paradigm for small business users. It could transform the economy.\u201d<\/p>\n\n\n\n Some commentators suggest that given inexpensive, low-power-consumption wireless devices, even poor farmers could embrace such tools\u2014to check local market prices for their produce, for example.<\/p>\n\n\n\n And further down the line, as African economies gradually evolve and middle-class consumer markets emerge, there is no reason why operators couldn\u2019t use WiMAX for just about anything wireline networks deliver in developed economies today. Including TV, Gabriel says. But that day is at least a decade away.<\/p>\n\n\n\n And Kirkaldy notes that to the extent the MEA market is driven by independent start-ups, the current economic downturn and resulting scarcity of investment funds could slow the whole process.<\/p>\n\n\n\n But ten years from now? Could WiMAX eventually transform the vast unconnected expanses of Africa and the Middle East and bring the region into the first world? It\u2019s a tantalizing and devoutly to be wished for outcome.<\/p>\n\n\n\n Gerry Blackwell is a veteran technology journalist and frequent contributor to Wi-Fi Planet. For more in his WiMAX Around the World series, read “<\/em>WiMAX Struggles to Find a Foothold in Western Europe<\/a>.”<\/p>\n","protected":false},"excerpt":{"rendered":" By Gerry Blackwell April 24, 2009 While operators in “the MEA market” may be very tightly focused for now on using WiMAX for fixed broadband, there is nothing stopping them planning for a future when mobile broadband becomes feasible and demand emerges. In the\u00a0fourth installment of\u00a0our series\u00a0on WiMAX around the globe, we look at the potential … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[7],"tags":[],"featured_image_src":null,"featured_image_src_square":null,"author_info":{"display_name":"Eric Sandler","author_link":"https:\/\/wi-fiplanet.com\/author\/ericsandler\/"},"_links":{"self":[{"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/posts\/2400"}],"collection":[{"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/comments?post=2400"}],"version-history":[{"count":2,"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/posts\/2400\/revisions"}],"predecessor-version":[{"id":3193,"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/posts\/2400\/revisions\/3193"}],"wp:attachment":[{"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/media?parent=2400"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/categories?post=2400"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/wi-fiplanet.com\/wp-json\/wp\/v2\/tags?post=2400"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n\n\n\nMulti-national interests<\/h3>\n\n\n\n
Supply and demand<\/h3>\n\n\n\n
Down the road<\/h3>\n\n\n\n