- Buyers Guide
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, 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.