ICT

The information and communications technology (ICT) market in the Middle East and North Africa is the third-fastest-growing ICT market in the world, and opportunities for international investors abound in the region. In the Gulf States, expenditure on ICT technologies is expected to rise from the current USD 30 billion per year to USD 45 billion per year by 2010.

Local telecom and communications market to reach USD 2.6 billion

In the United Arab Emirates alone, the ICT market is expected to reach around USD 2.6 billion by 2010, double the USD 1.3 billion recorded for this market in 2005.

Many factors are stimulating the growth of ICT in Dubai and elsewhere in the United Arab Emirates. One reason is that local governments believe that massive investments in ICT technologies are crucial if they are to achieve their development goals and offer a better quality of life for their citizens. As a result of this thinking, the United Arab Emirates now has one of the world’s most advanced telecom infrastructures, and Dubai – one of the first countries in the Gulf to offer public access to the Internet – is carving out a niche for itself as the hub of the regional ICT industry.

E-government initiatives stimulating ICT growth

In Dubai, the financial-services sector, with its demand for the latest and most secure ICT technologies, has been a huge growth factor for ICT, as have government initiatives to bring about full e-government. IBM and Microsoft are two international partners who are helping the United Arab Emirates achieve its e-government goals. H.E. Sultan bin Saeed Al Mansoori, the United Arab Emirates’ Minister of Development for the Government Sector and Chairman of the Supreme Committee for Telecommunications, explains, “We aim to encourage federal ministries to use the latest computer programs to help them keep pace with the rapid development of the United Arab Emirates.”

In Dubai and elsewhere in the region, a focus on upgrading the education and health sectors, both of which demand the latest technologies if they are to improve their facilities and services, has been another reason for the strong increase in ICT spending in recent years. The local private sector has also been quick to adopt cutting-edge ICT technologies in an effort to remain competitive, especially as economies go more and more global.

Local ICT sector open to foreign investment

The increasing openness and liberalization of the United Arab Emirates’ ICT sector has attracted significant foreign investment, as have ambitious sector-oriented cluster developments that target the ICT sector, including Dubai’s Telecommunications, E-Commerce and Media Freezone (TECOM). As Al Mansoori points out, “Dubai Internet City and Dubai Silicon Oasis are anchoring projects for the ICT industry.” Such initiatives have helped make Dubai the regional hub for ICT re-exports.

The United Arab Emirates’ ICT Fund aims to promote further investment in the sector and to help create a true knowledge-based economy. “This fund focuses on research efforts and on projects that are of special value to us, for example software in Arabic, projects to increase local ICT awareness, and projects related to e-government. We welcome foreign participation of all kinds, whether involving individuals, companies, research centers or educational institutions,” Al Mansoori says.

At the recent GITEX 2007 ICT trade fair held in Dubai, representatives from leading ICT firms from all over the world expressed their confidence in the continued growth potential of the ICT market throughout the Middle East-North Africa region. Dubai’s hosting of this event, which attracted 30 percent more participants this year, reflects the emirate’s determination to serve as the hub for the regional ICT sector.

TRA

“The TRA makes decisions pro-competition rather than pro-competitor.”

The UAE Telecommunications Regulatory Authority (TRA), an independent regulatory body established three years ago, is promoting fair competition and adapting to a fast-changing market. Mohamed N. Al Ghanim, TRA Board Member & Director General, explains, “Americans should know that we are a truly independent organization that ensures fair regulation of the local telecommunications sector.”

The TRA was created to ensure that the UAE telecom sector, recently opened to competition, is fair and transparent. The UAE already has state-of-the-art telecom infrastructure with a mobile penetration of around 140 percent and fixed-line penetration of around 70 percent, as well as an established presence of one of its operators in several international markets. As Al Ghanim points out, “The quality of service is already extremely high in the UAE, where there are two licensed telecom operators: Etisalat and du.”
The TRA’s responsibility is to make sure that all licensed operators that enter the market in the future can count on a level playing field in the UAE. “The TRA makes decisions pro-competition rather than pro-competitor, unlike some other regulatory agencies,” Al Ghanim says. He adds, “We are very strict about making sure that any operator that is dominant in any field does not play with prices.”

The TRA has developed a strategic plan for the next five years that focuses on keeping pace with the rapidly evolving global telecommunications sector. “We are racing against time. If we are late, our sector is late. If we are fast, we build the sector with us,” Al Ghanim explains. The TRA sense of corporate responsibility is shown in the organization’s efforts to make sure that all UAE residents have access to modern telecommunications services while also ensuring that the country’s natural environment is protected. The TRA recently launched a program to recycle mobile telephones as one of its efforts to protect the environment.

High-potential partnerships

American companies looking to enter the market should consider partnerships. The American company Symantec recently established a long-term partnership with the UAE government, and Al Ghanim says the UAE welcomes more partnerships like this. He adds, “I went to Silicon Valley and met with a lot of firms to see how we can establish partnerships and research centers in the UAE. We have very strong alliances with the United States in terms of harmonization and implementing the best regulations in the world, and we want to have more partnerships with American companies in the future.”

Since the UAE telecommunications sector is the second-biggest telecom sector in the Arab world, partnerships with local telecom and ICT firms have excellent growth potential.

Du

“We will use the convergence of technologies to make a real difference.”

Du is the exciting new quad play telecom operator in the UAE offering multiple communication and entertainment options in mobile phones, broadband, cable TV and fixed line telephony. Since its launch in February 2007, du has introduced many “firsts” in the United Arab Emirates market, including a number booking campaign, pay-per-second billing, mobile TV, a mobile payments system, WoW recharge card – offering customers choice of more credit or more time, differentiated services for individual and corporate customers, video calling and video mail and much more.

Customers have responded positively. CEO Osman Sultan points out, “du’s strategy of proactively launching new services and products resulted in signing up over 1 million subscribers in only 9 months of operation, which is more than 22 percent of the population of the United Arab Emirates.” du recently announced revenues of AED 412 million for the third quarter of 2007, and as Ahmed Bin Byat, du’s Chairman, points out, “du has established itself as a major player in the industry and has built a strong presence in the UAE telecom market in a short period of time.”

Du is owned by a consortium of the government of the United Arab Emirates which has a 40 percent stake and 20 percent each by Mubadala Development Company, TECOM Investments, and public shareholders. du is listed on the Dubai Financial Market. It has been investing significantly in continuing to expand its network and services as well as the number of its shops and dealers. “We are proud of the trust placed in us by our customers,” says Sultan, who previously held high-ranking posts with France Telecom and was responsible for the successful launch of Egypt’s MobiNil in 1998.

du has also made a name for itself as a good corporate citizen through its sponsorship of FREEJ, UAE’s first 3D-animated series in the Middle East, its support for the EnviroFone mobile-telephone recycling scheme (one of the biggest corporate community-service drives in the Emirates to date), its launch of the Emirates National Cultural Encyclopedia, its sponsorship of the United Arab Emirates’ Special Olympics team, and many other projects.

du is helping to promote the United Arab Emirates and its telecom sector. As Sultan points out, “Just by introducing competition, we have changed the face of the game. By fully playing our role in opening the market to real competition, we are helping to make the United Arab Emirates a regional hub. We have a crucial role to play in this promising telecom market.”

Sultan credits du’s success to his customer-focused management team and to du’s innovative services. He says the company aims to continue to provide its customers with new products and services, including more 3G offerings and services based on the convergence of various telecom technologies. “We will use the convergence of technologies to make a real difference,” he vows, adding, “As the market evolves, customers will demand more from their telecom service providers. This is where we come in.” He adds that du recently expanded its 3G/2G networks to new areas throughout the Emirates covering over 90 percent of the populated areas in the UAE.

du launched mobile telecommunication services on 11 February 2007 across the UAE in addition to Internet and pay TV services in some of Dubai’s free zones. Call Select, du’s nationwide fixed line services for voice telephony, was launched in July 2007.

Confident about du’s future, Osman Sultan says, “Our expertise, complemented by a modern and progressive concept, provides a unique advantage for both business users and individual consumers. I want people to see us not just as the challenger of today, but as the leader of tomorrow.”