The telecoms industry is broadly optimistic about the prospects for 5G in the Middle East and North Africa (MENA) region, but also cognizant of the challenges, according to a new survey carried out by Omdia and its parent business Informa Tech.
Most respondents expect 5G to have a positive impact on the financial performance of service providers in the MENA region, with 85.7% saying they expect launching 5G to raise revenue for service providers in their market, while 69.3% expect profit margins to rise.
However, 66.2% of respondents expect service providers’ costs to increase as a result of 5G. And while there is overall optimism about the financial impact of 5G, making the business case is also seen as the most common problem area when developing 5G services, identified by 59.6% of respondents as one of the three biggest challenges. Other major challenges when developing 5G include network rollout (identified by 44.9% of respondents as one of their big three challenges); technology (43.8%); spectrum (32.6%); and devices (also 32.6%).
Enhanced mobile broadband (eMBB) is seen as the leading money spinner among 5G use cases, with 69.3% of respondents identifying eMBB as one of the biggest revenue opportunities in MENA over the next five years. Digital media, including video and gaming, came a close second to eMBB, ranked by 66.7% of respondents as one of the biggest revenue opportunities. Fixed wireless broadband was ranked as one of the top revenue opportunities by 52% of respondents, while 45.3% selected smart utilities.
Almost two-thirds (64.7%) of respondents said that the business and consumer sectors offer similar revenue opportunities for 5G in MENA. Of those that picked just one sector, 25.9% said the business market offered the best revenue opportunities, while 9.4% opted for the consumer segment.
In line with the high expectations for digital media use cases, 58.8% of respondents said media and entertainment is one of the three most promising industries for 5G revenue in MENA. The government sector, and the transport and automotive industry, ranked equal second, with both polling at 44.7%. Healthcare also scored highly, selected by 40% of respondents as one of the top three industries for 5G revenue in MENA. Retail was voted for by 28.2%, while financial services, and oil and gas, were both nominated by 23.5%.
There is wide variation in MENA in the pace of 5G deployment. Several advanced Gulf markets launched commercial 5G services in mid-2019, but no MENA markets beyond the Gulf have launched 5G commercially yet. This variation was reflected in the survey: while more than one-third (34.8%) of respondents said they worked for a company that had launched commercial 5G services in 2019, 27% do not expect their company to launch 5G until 2023 or later.
The survey was carried out online within the industry during January and February 2020. There were 116 respondents, of which about two-thirds were based in MENA.
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