Telecoms, Business Culture Hinder Internet Growth in Gulf

Published June 1st, 2000 - 02:00 GMT

Businessmen, bankers and information technology experts are warning that the dual hurdles of telecommunications monopolies and traditional business culture must be overcome for the Gulf to prosper from a headlong rush into the electronic age. 

Saeed Hussein al-Muntafiq, chief operations officer at Dubai Internet City (DIC), said the region had no choice but to adapt to the new age and stressed that DIC would offer a number of Internet Service Providers (ISPs). 

"We did not ask the world to come knocking on our door," Muntafiq said. "We cannot become an island in the seas of change. We must set sail to the direction of the wind and ride the storm with pole position in mind. 

"When and how many ISPs DIC will have is an issue we are currently reviewing," he said, adding that the city would house dotcom start-ups, multinationals, call centers, software developers, multimedia and broadcasting companies. 

Anis al-Jallaf, chief executive officer of Emirates Bank International, the only local bank to offer customers Internet banking, has also urged the breaking of the telecommunications monopoly of Etisalat, the sole ISP in the United Arab Emirates. 

"We want speedy highways, not country lanes," Jallaf said. 

An official from UAE Offsets, a governmental body which oversees economic growth, said Etisalat was "between a rock and a hard place. It is not King Canute who can turn back the encroaching sea of change." 

"For the good of the nation it has to break the monopoly," he warned. Telecommunications remain a monopoly in all Gulf states. 

For many small businesses in the UAE, the enthusiasm generated by grandiose talk of DIC and globalization is mixed with skepticism at the true impact and understanding of the Internet as a tool for business. 

"The biggest problem in the Middle East is the traditional face-to-face side to business, where personal contacts and meetings often drawn out over several months and numerous cups of coffee are expected," an independent information technology consultant told AFP. 

"How can we impose western business values in countries which effectively work a nine-month business year since everyone leaves for the hot summer months?" 

A.K. Mathur, development manager of, an on-line trading house, was scathing of the mindset of Gulf businessmen. 

"They cannot do business-to-business with people they do not know, let alone if they haven't even heard of them. They are nowhere near adopting the idea of e-commerce." 

Mathur also criticized the way e-commerce was being presented in the UAE: "Conferences comprise only government employees, chief information officers from multinationals and I.T. providers." 

"There are never any users present to learn how to develop their potential businesses. Most e-commerce worldwide involves booksellers, travel agents, health and beauty. Where are they in Dubai?" 

Another consultant claimed "most people here think e-commerce is just about getting a website. What it should be is a new business strategy encompassing web-enabled selling, trading and advertising. We are far away from that scenario." 

"I just hope companies don't get bludgeoned into feeling they have to jump on the bandwagon of the new buzzword," he said. 

"The prime example is the clamor by banks for Internet banking merely to follow in the footsteps of the market leader, without any regard for consumer surveys and no review of their overall business strategy." 

Last October Dubai's Crown Prince Mohammad bin Rashed Al-Maktoum announced the creation of DIC, the world's first Internet free-trade zone, at a first-stage cost of 200 million dollars. 

The first buildings at the tax-free site will be ready by October and offer 100-percent foreign ownership, 50-year renewable land leases and world class logistics. 

Sheikh Mohammad announced in April a revolutionary project to propel public service into the Internet age, and warned officials they would lose their jobs if they refused to go electronic -- DUBAI (AFP) 

© 2000 Al Bawaba (

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