By: Khalid Athar
The GCC has long had a strong mobile market that has constantly displayed innovation and leadership. Telecom operators had already deployed sophisticated 4G LTE networks that cover most of the population, nurturing an explosion of new digital content and applications. Furthermore, nearly all operators have now launched initial 5G networks and associated 5G-capable handsets.
Even with these commendable developments, the coming years will see an even more rapid rise in 5G connections. Further, the advent of the Covid outbreak, and the resulting remote working/schooling has furthered the cause of digital transformation and is giving a boost to the overall ICT industry. In 2020 alone, the overall market for digital spending in the Middle East is expected to grow by a massive 26 percent compared to 2019[1]. And 5G is riding this growth wave and is expected to experience a phase of rapid adoption.
So while the 5G market and overall subscriber base are poised to really take off in the region, there are numerous trailblazers from which we can take early learnings.
Telecom operators such as Zain, Etisalat, stc, and others, have been flagbearers in driving 5G momentum. Today Zain KSA, for example, has deployed an expansive 5G network spanning all regions of the Kingdom. Analysts have noted that the operator’s ARPU for 5G users is over five times more than that of its non-5G ARPU[2]. In the UAE, Etisalat announced the rollout of its 5G FWA services, allowing users to access innovative digital services such as streaming 4K videos, enjoying cloud-based gaming, and so on[3]. On a similar note, stc Kuwait has created a robust 5G devices ecosystem offering its users a variety of devices, bundled with 5G, to cater to all their entertainment needs[4].
Observing these milestones and others, one major takeaway becomes clear: those that have a clear 5G strategy and deliver on their 5G promises will reap enormous benefits. So while a robust 5G network is a baseline for these achievements, it is not an end in itself. Telecom operators are continuing to learn and evolve as they develop compelling offers that attract a larger 5G subscriber base.
In particular, there are five important strategies that have shown enormous results in progressing the region’s 5G ecosystem and operators’ 5G businesses this year.
Developing a Clear 5G Package & Proposition
5G is a new proposition to many people and businesses, and that requires a special focus on marketing and promotions. Telcos must look at developing these clear 5G packages that are distinct from their existing portfolios. This can make 5G stand out in the eyes of the subscribers and ensure 5G has a brand-recall value. A clear 5G tariff plan also ensures that users know the real benefits that they are subscribing to, and feel motivated to try out the advanced features that 5G technology has to offer.
Improving Affordability of 5G (Lowering Tariffs per GB)
5G network and their maintenance are often agile and thus allow telcos to gain operations efficiencies (as compared to other legacy technologies such as 4G). Telco can do well to pass this benefit to the consumers. This will allow operators to offer larger 5G data bundles at tariff comparable to 4G (by lowering the price per GB in 5G) – which will act as win-win for both telcos and the user. The end users will accordingly be motivated to upgrade to 5G and get better data allowances, while telcos can expand their 5G subscriber base without having an adverse impact on their key financials. This strategy was very successfully adopted by the telcos in South Korea that offered more than 2 times data allowance in 5G (over 4G) at comparable prices[5] – leading to a 5G subscriber boost that propelled South Korea in crossing 9.25 million 5G users within its 1.5 years of launch[6].
Transitioning from “Connectivity” to “Experiences” through Content-Rich Services
5G has the potential to offer a transformative experience to its users. Yet this can only be unlocked if subscribers have access to services such as gaming, AR, VR, 4K-video, and others. These services showcase the true power and superiority of 5G over other technology generations. Telcos that can offer this buffet of services to their users will enjoy higher engagement and will thus lead to better services monetization. It is no longer about just offering high-speed connectivity, but delivering on a digital lifestyle.
Offering Flexibility in Terms of Contract Commitments and Durations
Highly-priced 5G packages and long-duration commitments have been a prime impediment for subscribers in joining 5G, both regionally and globally. To address this issue, telcos need to be creative in the offers they make in terms of contract length, minimum monthly commitments, and included devices.
Cross-Selling to Move Towards Convergence
Historically, telcos have been running their mobile and fixed business as two separate entities with limited synergy. All this changes in the 5G era. Today there is a lot of cross-company and cross-portfolio synergies that are possible. This is a unique opportunity that some telcos are capitalizing on to harness the true power of 5G, and are accordingly reaping rich dividends from it.
The above five learnings can be equally adapted for the smartphone segment. It is an area that can benefit greatly from a focused 5G-centered marketing push, for example. A lot of telcos in the GCC that are currently lagging behind in the 5G smartphone race can now look at these above learnings to help create a 5G proposition that is attractive as well as successful for the end consumer.
Overall, the year 2021 is expected to be another massive steppingstone on the Middle East’s 5G journey. Telcos that can lead this transformation, and apply the best practices of the marketplace, will no doubt find themselves at the forefront of the 5G era in the coming decade.
[1] https://wired.me/technology/technologys-pivotal-role-in-the-post-pandemic-age/
[2] https://www.analysysmason.com/research/content/comments/zain-5g-rollout-rdmb0-rdrk0/
[3] https://www.khaleejtimes.com/business/telecom/15gbps-super-fast-home-internet-service-launched-in-uae
[4] https://www.stc.com.kw/sites/stc/en/m/5g-plan
[5] https://www.analysysmason.com/research/content/comments/south-korea-5g-launch-rdmm0/
[6] https://www.rcrwireless.com/20201102/5g/south-korea-reaches-9-25-million-5g-subscribers-report#:~:text=South%20Korea’s%205G%20users%20reached,mobile%20subscriptions%20in%20South%20Korea.
