3G subscribers will overtake GSM in UAE

The UAE is set to become the second country after Saudi Arabia where the 3G subscriber base will overtake the Global Sysyem of Mobile (GSM) subscriber base this year, industry experts said. The number of 3G subscribers in the UAE at the end of this year is expected to be 6.99 million compared to 6.31 million subscribers in GSM (2G). The number of 3G subscribers in the UAE at the end of last year is expected to be 4.31 million compared to 8.36 million subscribers in GSM. "3G technology has helped drive the boom in data services adoption over the past few years, but operator 3G networks are becoming strained due to the frequency and volume of usage by end users," Ronda Zelezny-Green, associate research analyst at Pyramid Research, said. He said the emergence of Long Term Evolution (LTE) technology will not only help ease the current jams and congestion, but will also help expand data services and speeds as well as improve the quality of service offered by operators. LTE's simple design, speed, power and efficiency are some of the tremendous advantages over 3G technology. The Gulf countries could potentially become an LTE powerhouse in the short- to medium-term. This is because, he said, these countries already enjoy high levels of mobile phone penetration and most have a base of users with high levels of disposable income and a passion for the latest and greatest technology. Surge in use According to Abhishek Chauhan, Senior Consultant, Information and Communications Technology Practice, Frost & Sullivan, the surge in use of mobile broadband has been attributed to the proliferation of smartphones and smart devices, along with the increasing use of social networking and blogging tools, amongst others. Owing to a fast growing number of cross-border workers, branded handset vendors in addition to white-box handset makers in China, have strengthened their deployments in the dual-SIM smartphone segment, according to industry sources. According to Strategy Analytics, the number of subscribers of dual-SIM smartphones is expected to grow by 80 per cent in the next two years. "LTE and Worldwide Interoperability for Microwave Access (WiMAX) are the two competing 4G technologies expected to drive the growth in mobile broadband, regionally and globally," Chauhan said. Mobile broadband is also gaining momentum because of the users' need for seamless mobility and continuous internet connectivity. "LTE is the technology of choice for most mobile operators, and with strong momentum, we expect it to be the long-term, next-generation network technology of choice," says Jan ten Sythoff, Pyramid Research Analyst at Large. LTE has already overtaken WiMax subscriptions in 2011, and the range of LTE devices has increased elevenfold in the past year. Saudi Arabia is one of the largest mobile markets in the Gulf region, with 51.6 million mobile subscribers and mobile penetration of 186 per cent; whereas the UAE boasts of a highly-saturated mobile market, with mobile penetration of 197.2 per cent. Saudi Arabia and the UAE are also expected to witness high LTE growth. According to Informa Telecoms and Media, the number of 4G subscribers in the UAE is expected to grow to 164,000 this year. In Saudi Arabia, the number of 4G subscribers is expected to be 8,200 last year and growing to 2.07 million this year. GSM subscribers are expected to fall in the years to come while 3G subscribers are expected to increase more than 30 per cent year-on-year growth annually. Matthew Reed, senior analyst at Informa Telecoms and Media, said the UAE is a relatively affluent market so a substantial proportion of consumers can afford 3G devices. By 2015, the number of 4G subscribers in UAE is expected to be 6.12 million, followed by 3G with 55.31 million and 2G with 1.12 million. In Saudi Arabia, the number of 4G subscribers is expected to be 1.57 million, followed by 3G with 12.43 million and 2G with 6.82 million during the same period. Dynamic base On the UAE market, Chauhan said: "The UAE has dynamic subscriber demographics due to its large expatriate population. Similar to Saudi Arabia, the market has large youth population, which is driving the demand for mobile services, particularly mobile internet and mobile data. Also, with high disposable income, the penetration of smartphones, laptops, and tablet PCs is high and is expected to increase further." The initial launches in Saudi Arabia and the UAE will be limited to only major metros, with operators expected to increase their service coverage gradually in 2012-2013. Though LTE penetration might see a marginal uptake initially, it is expected to rise with gradual coverage expansion and more developed device ecosystem.