As many of the Gulf states pivot away from oil and gas, they have turned to digital development as a way to attract foreign investment and spur domestic growth. A critical part of these digital transformations is the widespread adoption of 5th generation mobile communication networks (5G). Large-scale investment in 5G rollouts in Saudi Arabia, Qatar, the United Arab Emirates (UAE), and Bahrain reflect this reality. While the promises of 5G are large and potentially transformational, the unknown payoff of 5G investments, the potential for increased cyber vulnerabilities, and the dangerous use-cases of 5G technology could undercut the ultimate value of these investments.
5G technology is expected to be a major upgrade from today’s technology. Compared to its predecessors, LTE and 4G, 5G telecommunications technology promises download speeds hundreds of times faster, expanded bandwidth, and reduced latency, enabling technologies such as telesurgery, self-driving cars, and the continued expansion of the Internet of Things (IoT). These technological feats are made possible by shifting the bulk of the telecommunications infrastructure into cloud-based software. By eliminating hardware chokepoints and allowing IP addresses to become the “lingua franca” of mobile networks, 5G can connect a greater number of devices at faster speeds than ever before.
Other critical features of the shift to 5G are the changing infrastructure and regulatory requirements. The reduced latency and large-scale data transmission made possible by 5G depends largely upon constructing the necessary infrastructure. Building 5G networks will require upgrading existing 4G towers and the widespread creation of new 5G base stations. These investments come at a high price, with the total cost of ownership for telecommunication companies expected to double in the next five years, according to a 2018 McKinsey report.
Moreover, government regulators must allocate new frequency ranges within the spectrum to allow for optimal 5G performance. In particular, the 3.3-3.8 GHz range will form the basis of many 5G telecommunication expansions. However, as services offered over the 5G network expand and more advanced technologies become commercially available, higher frequencies will be required. Therefore, regulatory bodies will need to take on dynamic roles to maximize the potential of 5G investment.
In the Gulf countries, initial steps toward 5G adoption began in the mid-2010s, and in the spring of 2018, Qatar, Saudi Arabia, and the UAE all claimed to have deployed the first 5G network in the region. The movement to develop 5G networks reflects both government-led initiatives such as Saudi Arabia’s Vision 2030 and consumer-driven demand for mobile services throughout the Gulf.
From a regulatory standpoint, the region has taken key steps to enable the transition to 5G. The Arab Spectrum Management Group, an international body representing 22 countries, began to allocate portions of the 3.3-3.8 GHz range for mobile broadband. National regulatory bodies in Saudi Arabia, Qatar, the UAE, and Bahrain have all auctioned off portions of the spectrum to telecommunications providers. These auctions paved the way for rapid deployment of 5G networks in recent years.
The deployment of 5G in the Gulf is expected to spur domestic growth and build out the “central nervous system of the 21st century.” While much of the attention given to 5G is concentrated on glamorous technologies like virtual/augmented reality and self-driving cars, more traditional industries also stand to benefit from 5G adoption. Industrial Internet of Things (IIoT) technology in the oil and gas sector will enable more efficient monitoring and data collection. According to a report from STL Partners, the oil and gas sectors stand to increase their contribution to GDP by nearly 4.9 percent through the implementation of 5G and IoT technologies.
To date, the Gulf states are among the global leaders in 5G implementation and are well positioned to benefit from the transition to the new generation of mobile technologies. However, there are critical factors that may limit the extent to which these states will be able to capitalize on their investments.
Today’s investments in 5G are planning for the future, but it remains unclear if or when those investments will pay off. The limited number of 5G handheld devices available today will constrain the growth of a market for 5G, and many of the most exciting technologies, such as self-driving cars, will not be commercially available for years.
Furthermore, the high cost of implementing 5G base stations could put a strain on telecommunications companies, which may not recoup their investment for over a decade. While government assistance often exists for large corporations within the GCC, smaller telecommunications firms or those operating in niche markets do not always have the same luxury. The high cost of 5G implementation and uncertain returns could crowd out smaller providers, encouraging the consolidation of a market that, in most GCC countries, is already predominantly government owned. In an industry that has previously been criticized for having monopolistic tendencies and poor customer service, the rush to 5G could exacerbate these problems.
It is important to remember that the winners of the transition to 3G and 4G were not necessarily the early adopters. Rather, the companies and countries that profited the most were those that used the infrastructure to create new products and services on the platform, such as the relationship between social media, smartphones, and 4G. To fully reap the benefits of 5G adoption, the Gulf states will need to ensure their most productive sectors, oil and gas, benefit from the new technology as much as the flashier, more consumer-driven aspects of 5G.
A second point of concern regarding 5G adoption is the exacerbation of cybersecurity risks. The growing number of IoT-connected devices (roughly 26 billion today), which is expected to explode with the advent of 5G, is a steadily increasing threat. IoT devices are diverse, ranging from “smart fridges” to security cameras, and typically lack uniform security solutions. Vulnerabilities in IoT devices came to light in 2016 through the deployment of the Mirai botnet. The botnet, which consisted of mainly IoT devices, brought down the websites of many major companies, such as Twitter, CNN, and Netflix. The predicted increase in IoT devices with 5G will create a myriad of new attack vectors for malicious actors, potentially in critical sectors such as oil and gas.
Compared to previous telecommunications networks, 5G is considered to be more secure than its predecessors, but it still has some key flaws. As 5G is adopted in certain areas but does not reach nation-wide coverage, users will be susceptible to downgrade attacks, which force victims to rely on older, less-sophisticated modes of operation. Once operating on an older data transmission standard, like 3G or 4G, vulnerabilities such as the SS7 weakness and fake base station attacks can be exploited.
These growing vulnerabilities come at a time when the Gulf states are exposed to significant cybersecurity risk. While the Gulf states have invested heavily in cybersecurity in recent years, they are largely “consumers of digital technologies and not innovators,” leaving them with a shortage of cybersecurity professionals. Moreover, as technology is rapidly adopted and upgraded, security often struggles to keep up with the rate of change. This will leave the Gulf states in a position of acute vulnerability as 5G adoption continues. While countries have invested heavily in education and grooming top cyber talent, these initiatives will take years to come to fruition.
Existing cybersecurity regulatory and legal models in the Gulf states also leave them open to attack. According to a Chatham House report, the Gulf states have largely favored a centralized approach to cybersecurity that limits unwanted foreign influence and domestic dissent. This method comes at the expense of cyber-readiness in other areas, such as critical infrastructure and the financial sector. Moreover, cybercrime legislation has been adapted to limit forms of online speech and critiques of the government while failing to address the unique technical aspects of cybercrime cases. As former FCC Chairman Tom Wheeler put it, “to build 5G on top of a weak cybersecurity foundation is to build on sand,” and the existing flaws in Gulf states’ legal and regulatory frameworks could create serious vulnerabilities in the future.
Surveillance and human rights
Lastly, the use-case of Huawei’s 5G technology in Xinjiang highlights the potential for strengthened surveillance states in the Gulf. The spying capabilities enabled by 5G are astounding, “a system built on millions of cell relays, antennas, and sensors offers previously unthinkable surveillance potential.” The Gulf states have dedicated extensive resources to managing the information environment within their borders through the implementation of vague cybersecurity laws, disinformation operations, and the explicit targeting of journalists and dissidents. With the introduction of 5G, these operations can be expected to grow even further at the expense of individual privacy and civil liberties.
In conclusion, the adoption of 5G, especially in critical sectors such as oil and gas, has the potential to further the digital transformations underway in the Gulf. However, the high cost of implementation and exacerbated cybersecurity risk could undercut the economic value of 5G, while also enabling the construction of repressive surveillance states within the region.
Ryan Grace is a Graduate Fellow with the Cyber Program at MEI. He is currently pursuing a Master’s degree at Johns Hopkins School of Advanced International Studies, where he concentrates in Middle East Studies. The views expressed in this article are his own.
Photo by Asad/Xinhua via Getty Images
The Middle East Institute (MEI) is an independent, non-partisan, non-for-profit, educational organization. It does not engage in advocacy and its scholars’ opinions are their own. MEI welcomes financial donations, but retains sole editorial control over its work and its publications reflect only the authors’ views. For a listing of MEI donors, please click here.