UAE's ICT spending to reach astounding levels

UAE's ICT spending to reach astounding levels
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Published September 23rd, 2013 - 07:22 GMT via SyndiGate.info

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During 2003-2010, the ICT spending has grown at a CAGR of almost 19 percent to reach a value of $12 billion.
During 2003-2010, the ICT spending has grown at a CAGR of almost 19 percent to reach a value of $12 billion.
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World Economic Forum

Kuwait Financial Centre (Markaz) recently published the executive summary of its report on the UAE ICT. In this report, Markaz makes an attempt to understand and analyze the UAE ICT infrastructure development with a focus on market-size, ICT spending and key players. The report also discusses in detail ICT indicators, regulatory environment and identifies potential opportunities for investments.

According to Markaz, the UAE presents the second largest ICT market in the GCC region after Saudi Arabia in terms of capital and volume of spending. In the UAE, ICT market has registered impressive growth driven majorly by investments made in communications sector. During 2003-2010, the ICT spending has grown at a CAGR of almost 19 percent to reach a value of $12 billion. The ICT spending for the period 2013-2015 is expected to be about $40 billion in the UAE, of which approximately $30.4 billion will be in communications.

The UAE has one of the highest mobile penetration rates in the world at 173.7 percent as of March 2013. Youthful demographics and rising per capita income have placed ICT retailers in a favorable position with steady demand for smart phones, gaming consoles and computer systems with advanced configurations.

In the recently released GITR-2013 report by World Economic Forum, the UAE stands at 2nd place in the world and the first in the Middle East and Africa region in the government usage of ICT index. In terms of network readiness index it came at 25th place in the world, only second to Qatar (which is at 23rd place) in the GCC.

At the beginning of 2012, both Du and Etisalat deployed their mobile broadband 4G networks, capable of delivering high-speed, long-term evolution (LTE) mobile data services to their customers. Both operators are claiming that the newly built network infrastructure can provide consumers with speeds more than 100 Mbps. The UAE and Saudi Arabia are the first countries in the region to launch 4G networks. Upgradation of existing networks and telecom operators’ strategy to shift toward tapping data revenues would result in continuous spend in telecommunications category.

The report notes that ICT is a dynamic and ever-changing sector. This is more so in the GCC countries because of the ongoing structural changes. The ICT sector is very crucial to project the GCC as an increasingly preferred region for investors and businesses. While the European and American markets have matured, the GCC is still experiencing fast growth, even slightly better than other emerging markets. During the slowdown of 2008-2009, while Global ICT spending reduced by 3 percent, led by decline in the America (-4.4 percent) and Europe (-6.9 percent), the ICT spending in the Middle East grew by 6.6 percent.

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