Dubai Internet use in the UAE is among the cheapest and fastest in the Middle East, according to a study.
The Dubai Chamber of Commerce and Industry report claims a megabit per second in the UAE costs Dh62 compared with Dh76 in Saudi Arabia, the nearest regional counterpart.
This is lower than Dh82 and Dh96 in India and Egypt, respectively, but more expensive than a number of international markets.
“The UAE is the region’s fastest in terms of download — 10.2 Mbps [megabits per second] and upload 3.7 Mbps. The closest GCC partner — Saudi Arabia — offers speeds of 5.2 Mbps download and 1.2 Mbps upload. Other Mena countries such as Libya offer up to 2.9 Mbps download and 1.7 Mbps upload,” the report said.
Justifying the relatively high cost of internet services in comparison to other international markets in Europe and Asia, the chamber said: “This is primarily because these markets have large populations that lead to lower infrastructure provision costs on a per capita basis as well as lower Mbps costs.”
According to Economist Intelligence Unit forecasts, the GCC population will reach 53 million by 2020. As incomes rise, spending on technology typically rises as consumers tend to become more service-focused.
The study highlights several challenges confronting the sector in the UAE stating that the local IT sector is relatively small and focused on bringing in talent from overseas.
The market is reliant on cutting edge developments, of which India is the biggest supplier from Asia, followed by regional leaders such as Jordan and Egypt.
This is compounded by the fact that the pace of regional innovation risks falling prey to other innovator hubs such as Singapore, and although domestic privacy laws are improving, they are still migrating towards international standards. These challenges are likely to be addressed by both the disparate regulations between the emirates and the national institutions over the medium to long-term, thereby encouraging more foreign direct investment.
The study also claims cloud computing is proving attractive for developers and businesses in the Dubai.
It claims cloud services will become more entrenched in daily lives as the internet speeds and penetration rates in the Mena expand.
Growth in cloud services is also compounded by the fact that profitability for cloud-based services remains high because they are, in comparison to other sectors, relatively easy to increase in scale with very little additional distribution or marketing costs — as is the case with most internet-bound services.