By Daniel Kjellander, VP of Middle East, CSG
For decades, countries in the Middle East have been known for their oil production and distribution. However, a few of its largest and most affluent countries have been working to firmly establish themselves as technological, sporting event and tourism hubs. In Qatar, English footballer and model David Beckham is headlining a new campaign to help the country meet its tourism goal of six million visitors by 2030. Saudi Arabia has also invested heavily in new sporting endeavours, including the inaugural LIV Golf Tour.
As the oil economy has become vastly more volatile in recent years, advanced Middle Eastern markets are investing in digital-first economic drivers that rely on telecom and advanced infrastructure. In fact, Middle Eastern and North African governments were projected to spend $13.3 billion on IT and $3.9 billion on telecom services in 2022. Zooming out, global digital transformation markets were projected to reach $1.8 trillion this year, with $2.3 trillion forecasted for 2023. While the Middle East begins to heavily invest in advancing its digital world in 2023 and beyond, priority use cases have emerged – including transportation, healthcare, smart cities, sustainability and agricultural automation. All of which will be enabled by 5G.
CSPs Getting Creative in an Increasingly Deregulated Market
Agile transformation will be key in Middle Eastern markets, and communications service providers (CSPs) should be positioning themselves to evolve and adapt in the market as regulations change. Where CSPs have an advantage in this region is their access to a gradually deregulating market, allowing for more creative approaches and new entrants than in years past. For example, network sharing has not taken place in the same way it has been in many Western European countries, but CSPs have made it work.
The region has benefited from a mindset of readiness to adapt, demand for the highest quality, a competitive spirit and an interest in being on the cutting edge with technology across sectors. This has, in turn, generated a faster uptake in technology adoption than in other parts of the globe, giving the market a unique ability to “leapfrog” with tech advancements. As a result, we are seeing operators capitalizing on an increasingly deregulated environment with enormous diversity in terms of markets, drivers and demands.
In terms of 5G, we anticipate seeing continued deployments in Saudi Arabia, Qatar and the UAE, with future opportunities for operators in less mature markets, such as Lebanon and Egypt. Across the globe, the COVID-19 pandemic brought into stark relief the lack of infrastructure and models available for people to work from home and continue driving business forward. In the Middle East, many countries are now stepping up automation and digitalization efforts both to ensure they are prepared with digital infrastructure if another pandemic were to arise and to keep pace and compete with the rest of the world.
As the Middle East advances towards more automated and digital processes, local enterprises will find themselves more and more reliant on 5G to power new infrastructure and capabilities.
Factors for 5G Success in the Middle East
Of the countries globally that have rolled out 5G, some of the fastest networks are located in the Middle East, and from the looks of it, the Middle Eastern telecom market will only continue to grow – with an expected increase of $20.57 billion between the years 2021–2026 and a CAGR growth of 3.25%. This positions the Middle East as a pioneer for 5G success and a canary in a coal mine for many other emerging markets.
As other countries begin to roll out their own 5G infrastructures, they can look to the Middle East for guidance on how to approach traditional security issues that arise with digitalization, such as data privacy, digital security threats, network attacks and compatibility issues. With all new technological advancements come risks, and 5G is not exempt. A rise in IoT-connected devices, cloud use and network traffic can also present a cyber threat to networks, which must be thoroughly secured. Autonomous cars, smart roadways and even critical infrastructure are increasingly the targets of cyberattacks and fraud. As 5G infrastructure evolves in the Middle East, it will also require a thoughtful approach with end-to-end security that can immediately detect and deter threats. As enterprises transition to 5G, they should be as up-to-date as possible on the new infrastructure and security demands that come with it.
The Middle East is also a pioneer in private cloud deployment. The market will be able to pilot new and innovative smart city applications – many of which rely on 5G to be deployed – and invest in new business opportunities with the private cloud. For enterprises, opportunities are beginning to emerge in the form of private wireless capabilities and edge networking, as 5G will allow the potential for on-premise and near-premise processing. This will be particularly advantageous for enterprises that span a large geographical area – such as a manufacturing facility, warehouse, agricultural environment, or hospital campus – all of which rely heavily on advanced connectivity needs. Additionally, in these specific sectors, there is a lot of emphasis placed on digital transformation and ushering in new and more connected devices, which ultimately rely on advanced 5G infrastructure.
Another factor in the Middle East’s 5G success is directly tied to the younger generation’s demand for a better online experience. 60% of the population is under 25 years old, making the Middle East the most youthful region in the world. This younger generation is the fastest growing segment, and they will be the ones using online systems the most, directly helping to propel and create the appetite for digital transformation.
As we quickly approach 2023, the Middle East is gearing up to make massive investments in digitalization and infrastructure expansion, poised to unlock the power of 5G. As a result, we will not only see economic success but also more productive and innovative enterprises as well as a more connected consumer.
