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Middle East and Africa: Gaining WiMAX Momentum
By Cintia Garza, Market Analyst
Contact the author at
cintia@maravedis-bwa.com
For years, the Middle East and Africa (MEA) has been the least connected region
of the world. However, the lack of wired telecom infrastructure such as cable or
DSL opens up big opportunities for wireless access technologies such as WiMAX to
provide broadband Internet to the many rural and underserved areas in the
region. There are over 1 billion inhabitants in the region, representing around
15% of the global population. However, the region has fewer than 60 million
Internet users, 70% of whom are in the following 6 countries: Saudi Arabia,
Israel, South Africa, Nigeria, Egypt, and Morocco. These countries account for
5.3% of the world’s 1.1 billion Internet users, according to “ITU –
Telecommunication/ITC Markets and Trends in Africa 2007.” There is great
potential to improve MEA’s telecommunication usage and infrastructure, and WiMAX
is capable to address these needs.
By the end of October 2007, our WiMAXCounts Operators Tracking Service reported
a total of 29,000 WiMAX subscribers in the region. This is 3 times the number
reported for the end of 2006, the growth from Q2 to Q3 2007 alone accounting for
38%. The number of WiMAX subscribers in MEA constituted approximately 2% of the
global figure in Q3 2007.
2007 was a very active year in number of WiMAX deployments in the region. MEA
boasted the second most commercial WiMAX rollouts during the year, exceeded only
by Europe. Countries with ongoing deployments include South Africa, Nigeria,
Namibia, Uganda, and Gabon.
Among the most prominent 2007 deployments announced was from Telecom South
Africa, which in 2004 signed a memorandum of understanding (MOU) with Intel to
start WiMAX trials in that country. As of Q1 2007, the company had trialed the
service with 400 customers and in May 2007 announced the official commercial
launch in the city of Gauteng, using BreezeMAX from Alvarion. On June 9, 2007,
MTN Uganda introduced the service in 35 towns, primarily to individuals and SME
customers, also using equipment from Alvarion. Hyperia, which launched the
service in February 2007 in Nigeria, is deploying Ripwave 802.16e equipment from
Navini Networks (which is being acquired by Cisco Systems) in the city of Port
Harcourt. Saudi Telecom Company (STC), one of the largest telecom operators in
the Middle East, chose Redline Communications for its deployment, which started
in March 2007 in the cities of Riyadh, Jeddah, and Dammam. At present, it is
unclear whether fixed or mobile WiMAX will be offered by STC. In January 2007,
Bayanat Al-Oula signed a contract with Samsung to provide Mobile WiMAX services
in Saudi Arabia. The company has launched in four major cities: Riyadh, Jeddah,
Dammam, and Makkah. Many other operators deployed in 2006, such as Ghana
Telecom, Meditel (Morocco), and Teledata (Mozambique). A significant number of
MEA’s operators have launched WiMAX pilots; Neotel (South Africa) and MTN
(Cameroon) are among the operators that are currently trialing and have plans to
launch their networks in early 2008.
WiMAX residential ARPU in MEA is among the highest in the world, with
WiMAXCounts reporting an average monthly figure of US$52.00. Some of the
operators that reported the highest monthly figures are Netsys (Armenia), with
WiMAX plans starting at US$77; MTN Uganda, starting at US$66; Telecom Namibia,
starting at US$89; and Web Runner (Kenya), at US$60. However, the impact of the
high residential ARPU in some countries is offset by very low ARPU figures of
operators such as Telecom South Africa, at only US$35.
In contrast to its residential ARPU, MEA had the lowest ARPU for the business
segment, at US$99.84. This is consistent with the transmission rates offered in
this region, which are typically between 512 kbps and 1 Mbps. The highest ARPU
reported for the region was US$149.50, which corresponded to Armenian operator
Netsys.
In comparing the regional residential ARPU for WiMAX and DSL, DSL’s is slightly
higher. According to research firm Point Topic, MEA’s DSL ARPU for residential
is US$60.00, becoming the second highest in the world, after Latin America.
Thus, WiMAX represents a more attractive and affordable solution for customers,
at similar speeds that DSL offers.
WiMAX is providing the opportunity for new entrants in the Middle East and
Africa to compete and build networks that will efficiently and cost-effectively
address the great need for personal broadband Internet among the many
underserved communities in this region. One can expect to see even stronger
WiMAX activity during 2008, as more players are added and currently deployed
WiMAX networks gain maturity.
For more information you can contact the author:
cintia@maravedis-bwa.com
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