Interview with Ericsson Egypt Country Manager: Mobile traffic growth is predicted to accelerate

The industry’s growth is attributed to the government’s initiatives to develop the country into a telecommunication and technology hub, according to Oxford Business Group’s Egypt 2020 Report.

Furthering its progress, the government has allocated EGP 12.7 billion for its digital transformation projects in the current fiscal budget, Finance Minister Mohamed Maait said in August.

To get a better understanding of the local market’s trajectory, the impact of the shifts in consumer behaviors, and current limitations, Arab Finance interviewed Ericsson Egypt Country Manager Sameh Shoukry.

As one of Egypt’s partners in innovation, Ericsson entered the market in the late 1800s when it installed the country’s first telephone exchange to connect Cairo to Alexandria. Today, Shoukry highlights the company’s efforts to encourage the adoption of 5G technology.

How do you evaluate Egypt’s digital transformation process?

Recent events have emphasized more than ever the importance of global connectivity and continuous innovation. In this spirit, countries are expected to recognize next-generation mobile communication as one of the key drivers of digital transformation.

This is crucial as we emerge from the COVID-19 crisis. Such a move should also aim to preserve industry-led standardization efforts to develop this technology – which will lay the foundation of a more connected, sustainable society.

We aim, by partnering with local service providers, to improve network availability and quality through the use of our innovative technologies, enabling the Egyptian community to advance into a digital future.

And how do you project the health of Egypt’s ICT industry in the coming period?

Over the long term, mobile traffic growth is predicted to accelerate, driven by both the rising number of smartphone subscriptions and an increasing average data volume per subscription that is fueled primarily by more viewing of video content, as highlighted in the latest Ericsson Mobility Report.

Moreover, we expect to see many service providers improve 4G long-term evolution (LTE) networks with increased spectral efficiency significantly while driving down costs. They will play a key role in enhancing networks and paving the way for the next generation of mobile connectivity.

Commercial 5G deployments with leading service providers have taken place in the region during 2019 and 2020, with subscriptions forecast reach close to 1.4 million by the end of 2020, mainly in the Gulf countries. 5G is expected to reach 130 million subscriptions in the MENA region by 2026, representing 15% of total mobile subscriptions, according to the report.

Zooming in on economic reforms, how did they affect the telecommunication market?

Egypt has started in 2015 a very ambitious economic reform program, which has had a positive impact on all fronts. As for the telecom sector, the industry needs mainly two driving forces: spectrum and infrastructure; in other words ease of building sites.

We see great steps have been taken by the government to avail sufficient spectrum and make it available for the service providers so they can continue offering better services to the end-users.

How has COVID-19 impacted the Egyptian market? And how do you see the performance of the local market in comparison to that of other regional markets?

The pandemic has driven adoption and increased usage of many ICT services that have enabled consumers to build a new normal underpinned by connectivity.

Consumers’ communication behavior has partly changed, specifically when it comes to video calling and conferencing services appear to stand out.

There have been drastic shifts in data traffic globally due to COVID-19. For instance, we have seen major shifts in data and voice traffic moving from downtown to suburban and residential areas, as a result of lockdowns, as well as less mobility and movement in cities. We have also seen a significant rise in mobile voice calls, as well as bi-directional services, such as video calls and tools for smart working.

The mobile industry has largely risen to the challenge of keeping individuals and businesses connected during the lockdowns. The massive disruption caused by the pandemic has demonstrated the criticality of the network in today’s society. We are currently working closely with our customers to keep their networks running.

How has the pandemic impacted consumer perception of 5G?

In times of crisis, mobile and fixed networks become a central component of critical national infrastructure. It allows the country to carry out work- and leisure-related activities. Thus, expectations for better network experiences become higher.

Six in 10 smartphone users have a clear positive attitude towards the role 5G could have played during the crisis, and about half of them strongly agree that 5G could have offered both better network capacity and higher speeds compared to 4G. They also believe that society overall could have benefited hugely from 5G.

5G is made for innovation and, as the value of digital infrastructure has been further evidenced during these recent times, 5G investments can play a significant role in restarting economies.

What are the areas of cooperation between Ericsson and the government in the new capital?

Ericsson works with Egypt’s four service providers, namely Telecom Egypt, Etisalat, Orange Egypt, and Vodafone Egypt to provide the latest technologies and innovation in the Egyptian market. Our main focus is to make sure our customers, the service providers, are successful in addressing the technological and innovation challenges and demands in the marketplace where they operate.

In addition, we will continue to work hand-hand with all our local partners within the new capital project as well as other projects that aim at building the local telecom infrastructure while offering the best network performance.

What are Ericsson’s current priorities, both locally and globally?

Ericsson’s ideas, technology, and people have created a monumental impact and real turning points that have transformed lives, industries, and society as a whole.

We introduced many firsts in the Middle East and North East Africa (MENA) including some of the global systems for mobile communications networks; the third and fourth generation networks; we are also on the road to 5G. Our longstanding presence in Egypt reaffirms our commitment to this key market.

Globally, Ericsson will keep investing in new technologies like 5G, artificial intelligence, the internet of things (IoT), edge computing, and the cloud. Our goal is to unleash the creativity and innovation to fully leverage and propel the new generation of wireless technology in the region. This will not only help develop new 5G-based applications and business models, but also contribute towards achieving economic prosperity and Industry 4.0.

Furthermore, we want to spend a lot of time promoting local talents and leveraging our long-standing experience and expertise in the field of the 5G-networked industry to contribute towards mapping the digital future of countries.

What are your investment plans in the coming period?

As the MENA region races towards commercial 5G services, Ericsson has achieved significant milestones with leading service providers on the road to making a new global wireless standard a reality.

Our increased investments to secure technology leadership in 5G, IoT, and digital services have enabled us to reach 34 5G contracts with unique operators, of which 24 are live networks. In the coming years, we will see the new service networks going live around the region. The technologies that we are investing in are fundamentally changing the way we innovate, collaborate, live, and do business.

Some experts don’t think that Egypt needs 5G at the time being, instead, the country can further maximize its usage of 4G. What’s your opinion on the matter?

Telecom infrastructure is critical to inclusive socio-economic development. Provisions should be made to encourage the organic growth of the telecommunications sector, to prevent any hindrance to technology-driven innovation. However, 4G and 5G networks will coexist for the foreseeable future hence prioritizing 5G absolutely does not imply a de-prioritization of 4G/LTE.

The development of LTE and 5G digital infrastructure is an integral part of Egypt’s growing economy and has proved to be an essential driver of an inclusive information society that integrates digitization in all critical aspects of life, such as education, transport, health, and energy.

4G networks are evolving to deliver increased network capacity and faster data speeds. In the MENA region, around 30% of mobile subscriptions are estimated to be for LTE at the end of 2020. The region is anticipated to evolve over the forecast period, and by 2026, almost 80% of subscriptions are expected to be for mobile broadband, with LTE as the dominant technology with more than 50% of the subscriptions, according to Ericsson Mobility Report.

The evolution of 4G into 5G could be a powerful economic growth engine, particularly as this advanced mobile technology is deployed looking into improving productivity in key vertical industrial sectors.

Speaking of 5G, when do you think Egypt will roll it out? What are the needed steps and preparations the government and the market still need to take?

Egypt should be joining the 5G countries soon to leverage the early adaptor advantage and also actively participate in the innovation ecosystem the new technology brings.

5G is the next generation of wireless technology and is key to empowering new services and use cases for people, businesses, and society at large. As an augmentation of current mobile technologies, 5G could consequently ensure signi?cant economic advantages for Egypt’s citizens. If leveraged for good, the introduction of 5G and expansion of LTE networks can accelerate this process exponentially.

Ericsson is working with key service providers across Egypt, helping them create new services, new customer bases, and new digital ecosystems. As a partner, we are deploying next-generation technology with built-in customizations and innovations to deliver a rich consumer experience while building a robust, future-proof network.

Three of the four telecom operators recently obtained new frequencies? How will this impact the market and will operators need more frequencies?

The recent licensing of additional spectrum in Egypt is indeed a very positive step. This will help cater to the immediate coverage and capacity needs of the operators.

However, the spectrum is the lifeblood of the mobile industry, and to ensure effective coverage, capacity, and reliable quality of service for networks, operators need a mix of low, mid, and high bands with ample contiguous bandwidth of regionally harmonized spectrum. Depending on the use-cases the required bandwidth would be 40-60 megahertz (MHz) in sub 1 gigahertz, 100-300 MHz in mid-bands, and 400-1000 MHz in high-bands (mmWave).

It is all about the efficient use of scarce resources and allocation of new spectrum to the highest societal benefit. It is also about global or regional coordination and harmonization of spectrum usage to decrease the cost of technology by increasing economies of scale hereby maximizing the affordability for all users.

By Julian Nabil