Saudi Arabia’s Etihad-Etisalat (Mobily) has bypassed regulatory obstacles by rolling out long-term evolution (LTE) technology in the 33 cities through its fixed-line broadband operator Bayanat.

The high-speed mobile connectivity will be ready for commercial launch in the third quarter of this year. It will provide full coverage in each city, making it the largest LTE rollout in the region.

Mobily has resorted to fixed-line coverage since the Communications and Information Technology Commission (CITC) has refused all three mobile operators the 2.6Ghz frequency required for LTE.

“The Saudi government has not yet evacuated sufficient spectrum to enable LTE, but it is not an issue at this stage,” says Sacha Dudler, vice-president of regulatory studies and strategy at Mobily while speaking on the sidelines of the LTE Mena conference in Dubai.

 It is launching what it calls a “portable” LTE instead of a “mobile” LTE, this means that users will only be able to achieve high-speeds on mobile devices through dongles.

 “The CITC may give the frequencies in 2012 or 2013, but we intend to grow our data network for consumers and corporate customers as we feel there will be a paradigm shift in mobility,” Abulaziz al-Tamami, Mobily’s chief operating officer.

The case for LTE is most poignant in Saudi Arabia, where data usage is highest in the region. Mobily is reaching 200 terabytes (TB) of data downloads a day, growing 300 per cent from 62TB a day in April 2010.

The company expects data revenue to exceed 20 per cent in 2011, up from 18 per cent in 2010 and 14 per cent in 2009.

Smartphone sales, one of the key drivers behind the demand for data, will grow by 24 per cent a year from 2010-15 and by 2015 3G and LTE-enabled devices will make up 96 per cent of smartphone sales.

“Spectrum availability is a challenge, it is a scarce resource and there are many stakeholders who all want a particular frequency,” says Jeremy Foster Ericsson’s head of marketing and government relations for the Middle East & Africa.

The main competitor for the frequencies is the Ministry of Defence, which signed a $60bn arms deal with the US government.

Mobily has invested about $400m in its LTE plans. The company reported a net income of SR998m ($266m) in the first quarter of 2011, up 39.8 per cent in the same period in 2010. Revenues increased by 25.2 per cent to SR4.4bn ($1.2bn).

China’s Huawei and South Korea’s Samsung are developing the LTE network for Mobily.