Gcc Ict Market Overview

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GCC ICT Sector |
Opportunities Galore, Potential Untapped|
|
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December 01, 2010

Table of Contents

Executive Summary2
GCC ICT Market Overview3
Overview of ICT Projects1
Market Structure3
UAE3
Bahrain5
Qatar6
Saudi Arabia7
Kuwait8
Oman9
Government Initiatives11
Investment Opportunities12
Education (Short Term Option)12
Content development in Arabic (Medium to Long Term Option)13 IPTV (Medium Term Option)14
Key Challenges17
Bibliography18

Executive Summary

GCC ICT Market Overview
ICT (information and communications technology) sector in the GCC region has witnessed a phenomenal double digit growth over the years due to the digitization efforts by the respective governments to keep up with the global pace. This has mainly been possible due to direct government investments and opening up of private sector participation in ICT infrastructure such as Fixed, Mobile, & Internet telecommunication Networks. Total ICT spending in the GCC region in 2008 was US$47.96 bn with Saudi Arabia comprising more than 50% of the overall share.

Table 1: GCC ICT Market Indicators – December 2009 |
| Saudi Arabia (KSA)| UAE| Kuwait| Qatar| Oman| Bahrain| Total | ICT Spending (US$ mn)A| 24,269| 11,966| 4,793| 3,757*| 2,202*| 975*| 47,962| | | | | | | | |
Fixed Line Telephone Subscribers (000')| 4,230| 1,630| 541| 263| 395| 250| 7,309| % Penetration| 16.4%| 35.4%| 18.2%| 18.7%| 13.9%| 31.6%| 19.1%|  | | | | | | | |
Mobile Subscribers (000')| 44,800| 13,330| 3,860| 2,472| 5,569| 1,551| 71,582| % Penetration| 174.2%| 289.8%| 129.5%| 175.3%| 196.1%| 196.3%| 186.7%|  | | | | | | | |
Internet Subscribers (000')| 8,400| 3,193| 1,033| 412| 746| 483| 14,267| % Penetration| 32.7%| 69.4%| 34.7%| 29.2%| 26.3%| 61.2%| 37.2%|  | | | | | | | |
Total Population (000')| 25,720| 4,600| 2,980| 1,410| 2,840| 790| 38,340| Source: InternetWorldStats, IMF, Markaz, Regulator Publications and Agency ReportsA denotes 2008 figures; * denotes estimated spending|

The total number of mobile services subscriptions in the GCC region reached almost 71.6 million by the end of 2009, compared to some 7.0 million fixed telephone lines in the region. All countries in the GCC have a mobile penetration rate of more than 150% while UAE was the first country worldwide to have a mobile services penetration rate of over 200% in 2008. The high penetration in these countries has mainly been due to high number of foreigners entering the country for varying periods of time, relative late introduction of mobile number portability (introduced in KSA & Oman in 2006; while UAE, Kuwait & Qatar are expected to implement from Dec 2010) and market structure of individual countries with higher share of pre-paid customers.

By the end of 2009, the GCC region had one of the lowest levels of average Internet user penetration in the world, with only 19 out of 100 inhabitants using the facility. In a countrywide analysis, only Qatar, UAE and Bahrain have household computer penetration of above 55%. Among all the GCC nations, Qatar has the highest penetration levels which have increased by 38% between 2004 and 2009. About 44.5% of Qatari households possess a broadband-enabled computer by the end of 2009, up from 6.8% in 2004. This places Qatar well ahead of other GCC countries on broadband penetration in 2009, as 26.6% of Bahraini households had broadband connection last year, followed by Kuwait (26% of households), the UAE (18.8%) and Saudi Arabia (8%).

Spending on ICT in the GCC is likely to reach nearly USD180 bn over the next three years. The pace of growth in IT spending has been decelerating since 2004. IT spending in GCC countries is expected to grow 8-10% driven by the larger countries of Saudi Arabia and the UAE, which account for 50% and 25%, respectively,...
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