As investment in the internet of things (IoT) ramps up in the Middle East, the region’s telecoms operators are assessing the impact this will have on their networks.
A number of countries in the region are embarking on a drive to
create "smart cities", with government and semi-government entities
investigating IoT technologies. Leading the charge are the United Arab
Emirates (UAE) and Saudi Arabia, in which spending on smart city IoT use
cases is expected to grow 19.3% annually until 2019, according to IDC’s
IoT Spending Guide.
Operators in these countries are already taking note of the demands these investments will place on their networks. Paul Black, director of telecoms and media at IDC Middle East, Turkey and Africa, said some of them are looking at how dedicated smart city networks can be used on top of existing infrastructure.
“With smart city communication infrastructure expected to be overlaid
on the country's telecom infrastructure, the existing telecom network
infrastructure will serve as the foundation for the future smart city
projects,” he told Computer Weekly.
Black said regional operators will continue investing in the
extension of Wi-Fi hotspots and small cell networks to extend the reach
of smart city communication networks.
But some countries in the Middle East, such as Kuwait, struggle with
adding services on top of existing networks, simply because existing
networks are already stretched. In these cases, fixed-line services are
not fully developed, and so are overloaded. To cope with this, services
are delivered over mobile networks – but again, these struggle to cope
with the demands placed on them.
Even in more developed markets, such as the UAE – in which operators
have invested heavily in both access and backhaul networks – there are
challenges associated with creating IoT-ready networks.
Read more about smart cities
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Extracting revenues to invest
According to Marwan Binshakar, vice-president for mobile access network and operations at UAE operator Du, one issue lies in sufficiently monetising mobile broadband use to afford investing in the network. He said these investments need not just cover the ongoing maintenance of the mobile broadband network, but also allow for upgrades that might provide IoT and smart city services in the future.The need for operators like Du to extract more revenue out of mobile broadband users is pressing, given projected smartphone growth numbers in the UAE.
“The current forecast for the number of smartphones is to increase 10 times by 2020, compared to 2015. It is clear that the revenue generated by mobile broadband will be the dominant factor,” Binshakar told Computer Weekly.
“Having said that, the biggest challenge will be how to capitalise on such growth in revenue while controlling the capital expenditure needed to expand the network to accommodate such exponential growth.”
Accomodating traffic growth
The growth in mobile data revenue has proved lucrative for the region’s operators, who have seen their traditional telecom businesses stumble. But according to IDC’s Black, mobile data revenue growth has yet to match the investments operators have had to put in to enable the growth in data volumes. As a result, operators are looking for ways to drive greater efficiencies to reduce their costs.CW+
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CW Europe – December 2015
Finally, small cells can overcome capacity issues in the network. But he said the acquisition of small cells is hardly cost-effective – at least at the moment – despite Black’s assertions that operators will continue to invest in them.
“The challenge is the current cost for those small cells, which still haven’t reached a point that would immediately justify the deployment,” he said.
Returns on smart city investment
Outfits such as Du take the view that investing in smart city and
IoT-dedicated networks could lead to alternative revenue streams.
Granted, Du will need to address the requirements of the UAE government
in its push to create smart cities, but Binshakar said the operator
should be able to capitalise on smart city initiatives.
“We are involved in deliberations and actively participating in all
these initiatives and present challenges on how to implement the
networks with the right cost and efficiency variables,” he said.
“We do not see the introduction of the smart city as a burden or a
strain on us, but rather an opportunity for new future revenue streams.”
Du is already making strides when it comes to investing in smart
city requirements. In September 2015, it successfully tested its first
low-power, wide-area network. That infrastructure can relay data from
sensors country-wide. At the time, Du claimed the network’s low energy
consumption prolongs sensor battery life by years.
And with the IoT installed based across the Middle East expected to
grow significantly until 2020, IDC’s Black said other operators in the
region are expected to follow Du’s lead.
“The significance of IoT is already growing fast in the enterprise
domain and, with boundaries being pushed to cover smart cities and
various consumer IoT use cases, there might be a need for IoT-dedicated
networks,” he said.
POST By; http://www.computerweekly.com/
