Dubai's new network technologies set to deliver growth

Mobile data speeds in Dubai have increased rapidly in recent years, as the UAE’s two mobile network operators have ramped up spending on telecoms technologies and infrastructure. This is part of an ongoing effort to prepare the UAE for a future in which it is less dependent upon oil. A Cabinet reshuffle in early 2016 was a key step, following longer-term efforts by telecoms firms that were already under way.

Launches 

In late 2014 and the first three quarters of 2015 both the Emirates Telecommunications Corporation (Etisalat) and the Emirates Integrated Telecommunications Company (du) launched 4G long-term evolution-advanced (LTE-A) networks, which are capable of handling data transfer speeds in excess of 2 Gbps, two to three times faster than the standard 4G LTE technology that has been in place across much of the UAE since 2011. In real-life testing both operators have achieved speeds of more than 200 Mbps – still considerably faster than existing installed technology in the country. In addition, 5G LTE is in the works for some areas, with the UAE poised to be the first country to roll out such a network, as part of preparations for Expo 2020.

While widespread uptake of this technology is still years away, as most existing smartphone handsets cannot process data at these speeds yet, the long-term implications are significant. High-definition video, live gaming, live sporting event streaming and phone-based broadcasting are not feasible on currently installed networks, but could grow rapidly at LTE-A speeds. “The amount of investment in LTE-A networks and related technologies by both operators is big and growing: du recently said that 20-25% of its open contracts are for LTE upgrades, for example,” Matthew Reed, Middle East and Africa regional research practice leader at UK-based ICT research firm Ovum, told OBG. As handset technology develops further and Etisalat and du expand LTE-A network coverage, the effects will likely be far-reaching.

Ahead Of The Pack

Over the past 15 years Dubai has gained a reputation as one of the world’s most tech-savvy cities. The UAE’s telecoms sector is at the heart of the emirate’s thriving ICT industry. Etisalat and du have consistently launched new network technologies and services earlier, faster and more widely than other telecoms operators around the world.

Etisalat introduced standard LTE – commonly known as 4G technology – in late 2011, covering around 70% of urban areas in the UAE with some 700 base stations initially, a number which grew to more than 1000 by the end of that year. The operator’s LTE network was the 32nd in the world when it was launched, according to the Global mobile Supplier’s Association, a UK-based industry group. Dubai’s mobile operator, du, launched its own network in 2012, with coverage of around 30% of the UAE’s total population. The two operators have since expanded their LTE networks considerably, both in terms of geographic reach and overall quality. Local subscribers have reaped the benefits of the installation of LTE. According to media information and survey company Nielsen, 77% of the UAE’s mobile subscribers own a smartphone, and this figure is around 81% among subscribers between the ages of 16 and 34.

Handset Market

According to the UAE’s Telecommunications Regulatory Authority (TRA), in the second quarter of 2015, 32.6% of handsets registered in the nation were manufactured by Samsung, followed by Nokia with 31.5%, Apple (14.2%), Blackberry (4%) and Lenovo (2.5%). Smaller smartphone manufacturers present in the local market included HTC, Sony, Huawei and LG. Lenovo, which recently entered the smartphone business, has gained market share rapidly in the UAE. “We are working to grow quickly in smartphone lines,” Mohammed Hilili, the firm’s general manager for the Gulf region, told OBG. “You need a large portfolio of products in a place like Dubai to be able to adapt to the requirements of each segment.”

According to the International Data Corporation, from the first quarter of 2013 to the first quarter of 2014 the sub-$150 smartphone segment grew from 7% to 17% of the Middle East market. In this climate it is not surprising that a handful of new, low-cost manufacturers have moved into the UAE in recent years. These include Obi Worldphone, which was established by John Sculley, a former CEO of Apple; Wiko, a French firm; and Indian manufacturer XOLO. These firms produce smartphone handsets that range in price from Dh400 ($109) to Dh1400 ($381). “We have no interest in saturated markets like North America and most of Europe,” Sculley told local media in November 2014. “We are considering the market going through transition and where the population is largely young people buying smartphones for the first time.”

Early Adopters

In April 2014 Etisalat partnered with French telecoms equipment supplier Alcatel Lucent to carry out the Gulf region’s first test of LTE-A technology. In a process known as carrier aggregation, the new technology allows a mobile operator to combine their spectrum assets, dramatically expanding transfer capacities. Etisalat’s LTE-A network combined 1800-MHz and 800-MHz spectrum bands, allowing the carrier to achieve data speeds of up to 700 Mbps in laboratory testing conditions.

In October 2014 Etisalat announced that it had begun to upgrade its installed 4G LTE network with LTE-A technology. The network will eventually support peak download speeds that are three to four times faster than 150 Mbps, which was the top speed of the existing 4G LTE network. “While our 4G network is well prepared to respond to the growing demand for mobile data, to ensure that we are able to accommodate new opportunities and strengthen our services, we will continue to build capacity and expand through investments in our networks and resources,” Saieed Al Zarouni, Etisalat’s senior vice-president of business planning and technology evolution, told local media.

That same month, du also announced that it had achieved speeds of up to 900 Mbps – among the fastest in the world – during tests of its own LTE-A network. Like Etisalat, du’s technology was based combining the 1800-MHz and 800-MHz spectrum bands. In June 2015 du said it had begun to install the new technology across its network. As the operator pointed out, the combination of a low band (800 MHz) and a high band (1800 MHz) allows for high-quality calls and data transfer rates both indoors and outdoors. The LTE-A network from du is being rolled out in conjunction with Nokia Networks, a wholly-owned subsidiary of the Finland-based telecoms giant Nokia. The operator promised data transfer speeds of up to 225 Mbps once the technology is up and running.

Speed Constraints

Both du and Etisalat faced a variety of technological hurdles in their effort to install LTE-A technology across the UAE. Most existing mobile handsets are outfitted with category-three (cat-3) antennas, which can handle LTE speeds of up to around 100 Mbps – well below LTE-A capacity. Increasingly, newer handsets come with cat-4 or cat-6 antennas, which are capable of data transfer speeds of 150 Mbps and 300 Mbps, respectively. Cat-4 phones include the iPhone 6 and 6S, various Samsung Galaxy handsets and Google’s Nexus 5, among others, while cat-6 phones include Samsung’s Galaxy S5 and S5 Plus, Huawei’s Ascend Mate 7 and some versions of LG’s G3. Many of these handsets are currently only available in certain markets.

Furthermore, the 200-Mbps-plus speeds reported by both du and Etisalat over the past year are only possible in a laboratory setting. Outside the lab, a wide range of real-world circumstances negatively affect data transfer speeds, including weather, other wireless technologies and load – the number of people using a given network at the same time. While a standard 4G LTE network is theoretically capable of handling speeds of 150 Mbps, most users will be lucky to achieve regular transfer rates of 20-30 Mbps.

In a study published in May 2015, the TRA reported the results of tests it ran on the 4G LTE networks operated by du and Etisalat. du’s network had average download speeds of 7.5 Mbps, and upload speeds of 900 Kbps, while Etisalat’s network typically facilitated downloads at 12.7 Mbps and uploads at 2.1 Mbps.

Linked Up 

A fixed-line infrastructure-sharing agreement recently agreed by du and Etisalat has the potential to affect mobile data transfer speeds in the UAE. In development since 2009 and finalised in August 2015, the deal will allow du to provide calling, broadband and television on Etisalat’s fibre, and vice-versa. While implementation of the infrastructure-sharing agreement began in mid-2015, it is not expected to be completed until the end of 2016. However, both du and Etisalat are moving ahead with additional investment in network infrastructure. In July 2015 du said that it had signed a memorandum of understanding with Chinese telecoms firm Huawei to develop the operator’s LTE-A network further and prepare for even faster future network technologies.

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The Report: Dubai 2016

ICT chapter from The Report: Dubai 2016