The GSMA has announced that greater allocation of spectrum for Mobile Broadband is vital for the economic and social development of Saudi Arabia.

New findings from a report by Analysys Mason, commissioned by the GSMA, reveal that if the Saudi government was to release internationally harmonized spectrum in the 800MHz and 2.6GHz bands, the Kingdom would stand to benefit substantially.

Peter Lyons, director of spectrum policy, Africa and Middle East, told Arab News that the release of harmonized spectrum would generate an additional SR 358 billion ($ 95.5 billion) in Saudi GDP and create 425,000 jobs between 2013 and 2025.

"This sum could fall to just $ 26 billion if the release of the necessary spectrum is delayed to 2018, and the number of jobs created could be reduced to just 75,000.

Furthermore, failure to use harmonized spectrum would consequently stop the Kingdom from deriving economies of scale and would require equipment to be specially designed for that market. Equipment vendors may be unwilling to develop such equipment, or may charge very high prices for it, as they will not be able to spread their fixed costs over a very large user base, and ultimately this would translate into higher prices for consumers," Lyons added.

He said Saudi subscribers could face a significant reduction in the variety of devices available.

"In particular, many of the most desired smart phones that support Long Term Evolution (LTE) and available internationally would simply not be available in the Saudi market," he said.

He confirmed the current spectrum allocation for LTE in the Kingdom, in the 2.3GHz and 2.6GHz bands, follows a completely non-harmonized arrangement, and as a result, will not deliver the benefits made possible by allocating harmonized spectrum in the 800 MHz and the 2.6 GHz bands.

"The continuation of the current arrangement will have a detrimental impact on coverage across rural areas, in-building penetration and high-capacity connectivity for Kingdom's largest cities," he said.

Broadband coverage to Kingdom's large rural areas, providing education and information benefits to the poorer areas of the Kingdom is vital.

"There is a large spread of population density across the Kingdom's regions as shown in figure. The large spread in density suggests that mobile broadband services in the Kingdom need to have both 800MHz spectrum (which is best for coverage in rural areas) and spectrum over 2.6GHz spectrum (which is good for capacity in urban areas)," he said.

Lyons confirmed that the Kingdom's government continue to shift its focus from creating public sector jobs, and focus instead on enabling environment for entrepreneurs to create companies.

"Saudi job market is concentrated around public services with 37.1 percept of employment deriving. However, while the share from public services is marginally falling, trade and tourism, communications and financial services are increasing in importance, indicating growth in the private sector. We believe the Saudi government should continue to shift its focus from creating public sector jobs, and focus instead on creating an enabling environment for entrepreneurs to create companies, which in turn create higher skill and better paying jobs for citizens in the Kingdom. One of the most important factors in creating such an enabling environment is the access to reliable, cheap, high speed broadband connectivity across the country; the release of harmonized spectrum for LTE will be absolutely critical to achieve these goals," he said.

GSMA report confirmed that international spectrum harmonization is critical in ensuring that new devices, such as tablets, smart phones and ultra books, will be able to work in the Kingdom.

"Failure to harmonize spectrum with the international community will result in the Kingdom being forced to use higher-cost and poorly-performing devices for LTE. In addition, people from neighboring Gulf Cooperation Council (GCC) countries would not be able to roam with their devices in the Kingdom," he said.

Since the launch of mobile broadband services in mid-2006 in the Kingdom, the adoption of this technology has been very successful. With three competitive players in the market - STC, Mobily, and Zain - opportunities for growth are significant, he said.
"However, the examples of regional leaders in broadband development, such as Qatar, the UAE or Kuwait, as shown in our figure, indicate that broadband in Saudi Arabia may have the potential to go much further than the current 48 percent population penetration. The growth in mobile broadband in the Kingdom to date has been fuelled by the availability of spectrum supporting 3G technologies such as HSPA. What is at stake now, is the availability of harmonized spectrum in the Kingdom for the next generation mobile broadband technology, LTE," he said.

He stated that it is possible the 2.6GHz band will be cleared of government users by 2015 or 2016.

"We believe this is a step in the right direction, but there is a significant cost to delay from 2013 to 2016 in terms of good jobs that could have been created. Actually, no progress has yet been identified for the 800MHz band. Clearing this spectrum for mobile broadband should be at the top of economic policy-makers agendas," he added.

He said: "As a key market in the region, we encourage the Saudi government to make the necessary spectrum available to support the growth of LTE services," Lyons continued. "The benefits of widespread next-generation Mobile Broadband connectivity can help the Kingdom diversify its strengths and transition, over time, to a knowledge-based economy. This will create a solid foundation for continued growth, prosperity and security."