Under U.S. pretense that the Chinese telecom vendor Huawei could expose the Gulf to national security threats, United Arab Emirates (UAE) telco firms are urged by U.S. Lockheed Martin’s F-35 jets and drones’ sales deal to push Huawei from its 5G infrastructure contracts.
The UAE has always held a fierce stance concerning its strong mobile market gripped by its leading telco operators, Etisalat and du, both of which are state-owned and controlled.
Early 2021, telco companies, alongside the government, revealed plans to attract a higher foreign investment rate into both firms, with foreign ownership reaching 49 percent.
While China globally takes the lead with its 5G penetration rate – with anticipation to be adopted as input parameter for business viability, traffic estimation, and network planning for the network’s infrastructure – the U.S. is expected to follow suit as it is currently maintaining its focus on becoming the West’s new driving force in the 5G race of power. At the same time, UAE’s Etisalat and du are currently consummating plans to deliver its users with national coverage by harnessing LTE networks power.
The telco companies’ move created the foundation needed to further grow the mobile broadband sector and initiated a strong development in keeping an open mind and accepting content and applications, especially commercial transactions conducted electronically by mobile phones, also known as m-commerce.
In a bid to promote the fifth generation’s capacity in the Emirates in the upcoming years, and by default sustaining data demand, the government gave the green light for Global System for Mobile Communications (GSM) networks’ termination and all its networks to be utilized and implemented to help optimize 5G strengths by the end of 2022.
GSM is a renowned mobile phone network that helps switch between phones on GSM networks with information stored on a SIM card. It is globally adopted by most countries, except the U.S. who mainly uses Code Division Multiple Access (CDMA) – a type of multiplexing that facilitates multiple signals to occupy one transmission channel to optimize the use of available bandwidth.
In the UAE, Fiber-Optic internet is hastily subjugating DSL in the field of fixed-broadband networks, which plays a massive role in empowering e-commerce, and therefore complementing the government’s plans to transition its economy from a purely oil-reliant economy to a digital-based one.
So, what will be the Emirates’ move to rely on Fiber-optic internet means for its collaboration with Chinese telecom vendor Huawei seeing that it is considered one of the U.S.’ biggest allies in the region.
In a September interview with Gulf News, President of Huawei Middle East, Charles Yang unveiled the telecom vendor’s 5G and cloud computing plans for the region despite U.S. imposed actions.
When asked about the UAE’s 5G infrastructure contracts and whether Huawei sees itself in a powerful position bestowing it with an active role in the Gulf’s recently emerging 5G space, Yang said the following:
“The GCC – Gulf Cooperation Council – in particular, was among the global frontrunners in embracing 5G. Huawei was part of many of the first-phase 5G commercial rollouts in the Middle East and has continued to expand those networks with leading telecom operators. In particular, we see an opportunity to advance the 5G value proposition for business. The real value of 5G transcends the telecoms industry and has transformative implications for the economy as a whole.”
This means that Huawei was eagerly anticipating what could have been its deal of the century for 5G networks with the UAE. However, the Emirates’ move to give power to its local telco vendors will most definitely jeopardize any future 5G contracts the GCC might have with the Chinese vendor.
While the UAE’s maneuver to potentially remove Huawei’s 5G contract from its network, was not an unanticipated move; one that is forced upon by the Biden Administration, who gave the Emirates an ultimatum to choose between China’s 5G network infrastructure or the previously approved-upon F-35 jets deal.
In January, the UAE signed a $23 billion deal with the U.S. to buy 50 F-35 jets and an estimate of 18 armed drones before President Joe Biden took office. Now, the U.S. is leveraging this deal to convince the Emirates to isolate Huawei equipment from its networks for the upcoming four years before acquiring the jets and drones in 2026 and 2027.
In addition to the four-years’ extension given by the U.S., the UAE demanded an undisclosed time period on the given duration to lengthen its ability to find alternative and affordable solutions to substitute Huawei’s 5G infrastructure. Some suggested substitutes were Samsung Electronics Co., Ericsson AB, or Nokia.
BuddeComm reported that due to the aftermaths of COVID-19 and its residues on the telecoms sectors, chances are any retrieval in the industry in the upcoming year will be driven by network operators and mobile device production to strengthen its current infrastructure – which will not happen without difficulty.
Moreover, a thick shroud of vagueness follows the UAE in determining and predicting future and long-term impacts resulting from U.S. pressure on its telco firms to replace Huawei as its lead 5G network provider.
The only certainty the Emirates currently has is re-farming the 5G spectrum from different vendors to secure its Lockheed Martin F-35 jets and drones’ sales with the U.S. while preserving its future 5G infrastructure for its digital transformation plan in upcoming years.
The vitality of the UAE’s role is critical to the Middle East’s growth and digital development, alongside its alliance with the U.S. However, Huawei has always been the Gulf’s partner company in extending 5G network deals in the region, specifically the collaboration between the Chinese vendor and Etisalat in building the needed telecommunication architecture for future projects, such as Dubai Expo 2020.
The stakes have never been higher for the UAE, as it is stuck in the crossfire between the world’s most dominant powerhouses who are trying to prove and demonstrate their supremacy. Eventually, the Emirates will have to take a stance and choose a side as to which division suits it: a military stance with the U.S. by securing the F-35 jets deal or a telco stance by preserving Huawei’s 5G contract.
China’s 5G smartphone rollout hits 70% in 2021
More than 70 percent of China’s 5G smartphones are driven by the country’s expanded network coverage and ampler models’ options, resulting in an 8.1 percent rise in sales for fifth-generation network devices.
5G smartphones marked an impressive growth in reference to expanded network coverage and diversified bundles of models, a factor highlighted by the ever-growing device manufacturing of affordable varieties.
According to the Shanghai Daily, in September alone, the country’s sales margin hit 21.4 million units, an 8.1 percent decline from last year. However, 5G models marked a distinctive margin with 15.1 million units’ sales, leaping by 8.1 percent and resulting in 70.5 percent of total sales.
The China Academy of Information and Communications Technology (CAICT), in association with the Ministry of Industry and Information Technology, revealed state-owned telco China Mobile reported 956 million mobile users during September, with 331 million being 5G consumers.
In its third quarter, the world’s biggest mobile operator welcomed 10.2 million additional users, with the majority being 5G advocates, the telco said on Thursday.
In parallel, Big Tech giant Apple, alongside smartphones manufacturers Samsung, Oppo, and Vivo, have also initiated their 5G production plans in China.
The rising demand for Chinese manufactured 5G smartphones is merging from its low-cost influence. At the moment, 5G products cost less than $234, a factor that has been playing an influential role in heightening market demand from users, paving the way for a lesser threshold to fifth-generation networks.
In August, China Mobile, alongside the entirety of other local carriers, reported superior half-yearly performance in the last couple of years, as the country sustains a substantial digital transformation shift.
“As an early starter, China is giving mounting attention to 5G development and positioning it as a basis for national infrastructure building. That leaves carriers huge opportunities to expand their businesses,” veteran telecommunication industry analyst, Ma Jihua, informed The Global Times.
The steering impact of vigorous 5G rollout in mainland China is manifesting itself as one of the leading factors to rising profits for the country’s domestic telcos, as long as consumer rate stays on an exponential rise as users take a higher interest in 5G technology.
Vodafone adds 7,000 software engineers to target digital services
Vodafone unveiled plans to add nearly 7,000 software engineers to its expanding European-wide technical workforce by 2025, through a combination of recruitment, re-skilling existing employees and insourcing.
The company said in a statement, that “Expanding its software capabilities will allow Vodafone to build differentiated products and services at lower cost and own the intellectual property (IP) rather than sourcing them through suppliers. Insourcing expertise generates savings of 20 percent, on average, for Vodafone.”
The move is part of Vodafone’s increased investment to meet surging demand for digital connectivity, which is growing by up to 50 percent every year, and has been accelerated by the pandemic.
By bringing more software skills in-house, Vodafone is driving forward its strategy to transform from a traditional telecommunications company to a new generation connectivity and digital services provider of scale across Europe and Africa.
Johan Wibergh, Chief Technology Officer of Vodafone, said: “Vodafone is rapidly shifting up the gears to support the dramatic digital transformation that businesses and society are undergoing. We are building a global software brand with a diverse and inclusive culture, providing superfast connectivity and powerful digital products – however and wherever customers want to use them.”
By 2025, more than 50 percent of all employees within Vodafone Technology will work in software engineering. Vodacom, part of Vodafone Group, is also adopting a similar strategy through the extension of digital and financial services across Africa.
Software engineers at Vodafone will benefit from the company’s new technical career path, designed to recognise and develop technology experts into senior roles within Vodafone. They will be given the freedom to experiment and invent new services using cloud native digital architecture which will be made available to 300 million mobile customers, 28 million fixed broadband and 22 million TV customers via platforms built by Vodafone Technology.
With the springboard of a major investment of $9 billion in the last financial year, Vodafone Technology is already well advanced with its plans, based on its Tech2025 strategic blueprint
Overcoming telecoms industry challenges: Tackling the key problems
According to analysis by Digital Commerce 360, 81 percent of buyers used digital channels to make telecom-related purchases during COVID-19, and 36 percent plan to use digital channels more in 2021. However, the rise of digitalisation presents telecommunications with both opportunities and challenges.
Telecommunications is an industry battling constant change. A lack of connectivity in rural areas, hurdles to the full fifth generation (5G) rollout and the impact from the pandemic are just some of many challenges it must overcome in order to thrive.
And that’s not all. In an increasingly competitive market, customer demands for a faster and more personalised service mean that telcos of all sizes are constantly needing to adapt to stay ahead. To help telecommunications companies navigate an ever-changing landscape, software provider Mobilise, which has worked with service providers including Virgin and Red Bull Mobile, has shed light on some of the key challenges telcos face in 2021.
Digitalisation, competition between operators and the use of data analytics all need to be understood and overcome. Firstly, digitalisation impacts every step of the customer journey. eSIMs, for example, will be compatible in 60 percent of smartphones by 2025 and represent a significant opportunity for providers.
Mobilise provides eSIM as a service, supported by Mobilise’s M-Connect digital platform, to help service providers accelerate eSIM adoption while minimising costs, time to market and project risks. Onboarding customers with eSIMs, in place of traditional SIM cards, allows instant onboarding to encourage a more streamlined activation process. In addition, telcos can reduce logistics costs and can target the wider market for eSIM-enabled devices. Without seriously considering eSIMs, telcos could risk losing customers to other providers.
In addition, telcos must consider how customer expectations are changing. They want more flexibility, personalisation, and more meaningful interactions with providers. Competition between mobile network operators (MNOs) and mobile virtual network operators (MVNOs) is fierce. Smaller MVNOs are trying to keep up with their larger counterparts, and as customer expectations change, MVNOs must define their niche.
In addition, the M-Connect platform supports several other customisable services that can help MVNOs to better position themselves in the industry. The interface enables customers to buy and manage subscriptions independently and permits sales and customer service staff to manage customer demands with greater agility. “With M-Connect we’ve seen companies improve their net promoter score (NPS) by 25 percent.
M-Connect also enables advanced data analytics, an area that has thus far seen slow adoption across the industry. Previously, analytics, reporting and data management have largely been regarded as ’add-ons‘. However, we believe that analytics should be mandatory.
Analytical tools can be used to monitor how customers interact with a telecoms service, providing opportunity to enhance the user’s experience. This can incorporate technologies including artificial intelligence, which can be used to predict and prevent churn and improve customer retention.
Telcos must pay attention to changes in industry and the shifting expectations of their customers. Integrating technologies such as eSIMs and predictive analytics offers many operational and user benefits that could be key to overcoming common challenges.
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