The 4G Fight Begins

With the recent issuance of a 4G license to Umniah, the battle for market share amongst Jordan’s big three mobile operators is set to get livelier than ever. Increased competition should prove a boon for consumers in terms faster Internet speeds and a broader range of services. 

In mid-June, the Telecommunications Regulatory Commission (TRC) granted a 4G license to Umniah for JD71 million, which made it the third mobile operator in Jordan to offer 4G services after Zain and Orange.

The Kingdom’s generally robust ICT sector still faces challenges in terms of infrastructure and financing, with the latter constrained by higher taxes applied to mobile subscriptions. Tackling these and other issues will be vital to fully exploiting opportunities offered  by 4G further down the line.

Zain launched its long-term evolution (LTE) network back in February, making it the first full-service Jordanian 4G provider. With theoretical download speeds of up to 150 Mbps and coverage of all 12 governorates, the new network is the result of a JD200 million investment, with an additional JD100 million to be spent over the next two years.

Orange launched its 4G services in May, with mobile and wireless broadband speeds of up to 70 Mbps. While the network will initially be limited to the capital Amman, the company is targeting nationwide coverage by the end of the third quarter. According to Orange, total investment in 4G network upgrades is set to reach JD250 million, equivalent to one-fourth of its total investments in Jordan since 2000.

The launch of 4G services is good news for Jordanians, who are increasingly conducting their businesses online. TRC statistics from the first quarter place the number of Internet users in the Kingdom at 5.9 million, for a 76 percent penetration rate, while smartphone penetration sits at 65 percent, according to former Minister of ICT Azzam Sleit.

Orange estimates that around 4 to 6 percent of smartphones in Jordan are already 4G enabled, with this figure expected to rise rapidly in the year ahead. Users will benefit from a major leap in speeds as well as a broad spectrum of other services. For example, the new network is likely to boost migration to machine-to-machine communication and smart tools. Jordanians will also have greater access to online tools like e-government, e-education, and e-health, in addition to controlling other electronic appliances, such as household thermostats or security systems, from their mobile devices.

The upgrade to 4G also promises to yield dividends for a wide variety of Jordanian ICT firms and other service providers, ranging from retailers to video streaming sites. Advertisers will have a much more useful and flexible platform on which to operate and exposure is set to grow as penetration rates in the country rise.

Despite the potential offered by 4G connectivity, operators will have to contend with issues like a high tax burden and emerging technologies such as Skype, which routinely piggyback on the sizeable infrastructure investments made by telcos, consuming large quantities of the available data. Moreover, the sector is still being impacted by 2013’s doubling of taxes on mobile subscriptions to 24 percent. According to local media, this resulted in a 7 percent average decline in operator revenues in the first quarter of last year.