Saudi Arabia’s robust telecommunications industry drives economic progress

Explosive growth expected in smartphones, security software, broadband and internet protocol television as the country’s mobile penetration rate approaches 200%

As the country with the largest telecoms market in the GCC, Saudi Arabia is on course for phenomenal economic growth driven by rising demand for broadband internet, smart devices, mobile financial services and sophisticated telecom services, as identified by the country’s leading telecoms provider, Saudi Telecom Company (STC). Large emerging markets like Saudi Arabia are becoming the new global growth engines as their telecom industries drive economic growth, said leading industry experts in the run-up to GITEX Technology Week 2012 taking place from October 14-18 at Dubai World Trade Centre.

 

According to industry research experts RNCOS, overall IT spending in Saudi Arabia is set to hit USD5.7 billion by the end of 2014, up from USD3.5 billion in 2010. The country’s per capita IT expenditure is expected to amount to USD200 by 2012.

 

RNCOS also identified huge growth potential in smartphones, Internet Protocol Television (IPTV), WiMax, and security software markets, as well as rapid growth in 3G and broadband over the next few years. This potential is demonstrated by the country’s total mobile phone penetration rate of 198 per cent during 2011 with scope to increase beyond 200 per cent, according to a 2012 report by Saudi investment company Aljazira Capital. 

 

Enhancing competitiveness 

“Countries with a healthy, competitive telecoms environment have managed to attract high levels of foreign direct investment and Saudi Arabia is the largest telecoms market in the GCC, strongly positioned to benefit from the next wave of growth opportunities following a progressive liberalisation of the sector in recent years,” said Dr Khaled bin Abdulaziz Al Ghoneim, CEO of STC Group, a new exhibitor at GITEX this year.

“Economic development is enabled through securing efficient employment, attracting foreign direct investment, consistently innovating and having a stable macro-economic growth - the telecommunications industry plays an important role to stimulate this economic competitiveness,” he added.

 

“Businesses and consumers are demanding faster and more immediate connectivity at an increasing rate, which is driving innovation and growth in Saudi Arabia’s ICT sector,” said Trixee Loh, Senior Vice President at Dubai World Trade Centre, organiser of GITEX. 

 

“The demand for this connectivity has driven significant investment, directly and indirectly contributing to the economic performance of the country as a whole through job creation, advertising, SME support and the connection of businesses,” she added. 

 

Growth potential

Saudi Arabia is among the top 20 countries in the world driving growth in telecommunications, according to a white paper released this year by INSEAD Business School in partnership with telecoms, media, and technology advisory and investment firm Delta Partners. These emerging markets are anticipated to drive nearly 75 per cent of all incremental GDP growth until 2016, the white paper stated. 

 

According to Aljazira Capital, the Saudi telecom sector is the largest in the Middle East, with over 56 million mobile subscribers and more than USD20.5 billion in consolidated revenues. Increasing demand for web connectivity at home and via mobile is forecast to lead to a sustained period of revenue growth for the countrys largest telecoms operators, stated analysts at Shuaa Capital.

 

Saudi presence growing 

Now in its 32nd year, GITEX is introducing a host of new features which are expected to appeal to Saudi visitors at the world’s third-largest ICT exhibition and conference, with the number of Saudi exhibitors increasing each year. This year, exhibitor figures jumped by 25per cent with a 15 per cent increase in exhibition space compared to 2011. 

 

Among the Saudi ICT heavyweights at GITEX is Advanced Electronic Company, a regional leader in the field of modern electronics manufacturing, system integration and repair and maintenance services, as well as newcomer Al Elm Information Security, which focuses on secure e-business solutions. 

 

Themed “Where Technology Means Business” this year, GITEX connects more than 138,000 industry professionals and over 3,500 suppliers from 144 countries across five continents, making it one of the world’s top three ICT exhibitions – a reputation only set to soar as the Middle East and Africa and (MEA) region continues to use cutting-edge technology as the fuel for increasingly rapid, era-defining developments.