Last month the GSMA published its first in-depth assessment of the impact of the mobile industry on the Arab States, highlighting the explosive growth of mobile services in the region. Based on research from Deloitte, the GSMA Arab States Mobile Observatory details strong regional market competition and falling handset prices, fuelling a 32 percent average annual growth in mobile connections over the past 10 years, soaring from 19 million connections in 2002 to 391 million in 2012. While highlighting the extraordinary development of the region over the past decade, the report identifies fundamental challenges that put the continued growth of the sector at risk, including limited spectrum availability, high taxation and stifling regulation. “Mobile communications in the Arab States have transformed society and fostered substantial growth in investment, innovation and productivity,” commented Tom Phillips, Chief Government and Regulatory Affairs Officer, GSMA. “However, there are far greater opportunities that the mobile industry can deliver for the region. Governments need to take action now to increase spectrum availability and stabilize the regulatory environment if they want to continue the momentum and realize mobile's full potential.” The biggest markets in terms of connections are Egypt and Saudi Arabia, which together account for 40 percent of total mobile connections in the Arab States. Saudi Arabia is considered to be a very mature market with mobile penetration forecast to stabilize here at about 220 percent. It might seem that once the connections are in place, that would be the end of growth, but actually, that's just the beginning. With millions of people connected, mobile services can be sold at a significant profit. So much money could be made, and so many jobs could be created that the mobile industry would be a strong contributor to the Saudi economy - a supplement to the petroleum industry. Unfortunately, it appears that the Kingdom will be held back from achieving maximum benefit from the mobile industry due to the nation's unwillingness to harmonize 4G mobile spectrum and standards. Basically, what this means is that the way LTE/4G is set up in Saudi Arabia is according to different standards than those used in neighboring countries. The GSMA pointed out that the Kingdom has allocated fragmented, nonharmonized spectrum in unpaired frequencies. The lack of standardization with our neighbors means that smart devices come to Saudi Arabia later and both our network and devices cost more. “Failure to harmonize could result in additional costs for mobile devices of $162 per device for Saudi Arabia, due to additional production costs,” the report noted. “Furthermore, nonharmonized band plans can lead to limited device interoperability, leading to lower device availability. Regional coordination is needed to ensure consumers can benefit from the latest technologies at more affordable prices.” The report mentioned that Saudi Arabia already has a shortage of 4G spectrum - also called radio frequency bands. With too many connections crammed into the available spectrum, service suffers. Spectrum is the lifeblood of a mobile business, and its availability is critical to network planning and investment decisions. Without more harmonized spectrum, the mobile business in Saudi Arabia will be stifled. This is an important issue. Take the time to be informed by reading the GSMA report at www.gsma.com/publicpolicy/public-policy-resources/mobile-observatory-series.
