By Håkan Cervell, Vice President and Head of Ericsson Saudi Arabia and Egypt
The Kingdom of Saudi Arabia is ushering in a new era of digitalization, guided by the ambitious goals outlined in Vision 2030 to drive modernization, diversification and a brighter future through technology. With Vision 2030 aiming to increase non-oil GDP to 50% this decade, the nation has been making significant investments to improve its digital landscape and create a conducive environment for growth. The upcoming LEAP 23 tech convention serves as a testament to the country's dedication to digitalization and its efforts to stay at the forefront of technological advancements.
With the advent of the digital era, the Kingdom stands on the cusp of a new economic revolution, and I believe that three key factors will be instrumental in unlocking potential and creating a more connected and prosperous future for the Kingdom.
Network Investments - Leading the Way in Digital Transformation
A vital element in digital transformation is network investment. As the backbone of digitalization, networks provide the foundation for all digital services and applications. To meet the growing demand for faster and more reliable internet connectivity, investments in next-generation networks like 5G and fiber-optic networks are crucial. These investments will enhance user experiences and enable the adoption of innovative technologies such as IoT and edge computing. In line with Saudi Arabia's plans to diversify its economy, the government last year announced a $6.4 billion investment in its tech sector.
Our investments in cutting-edge technologies, such as 5G, IoT, network slicing and cloud-native solutions, are aimed at keeping Saudi Arabia at the forefront of technological advancements and leading the way in digital transformation. In the coming years, our focus will be on expanding network coverage, increasing accessibility to digital services and providing equal opportunities for all to benefit from digitalization.
5G and Digital Technologies at the Forefront of Industry Evolution
Through new collaborations and investments, the Kingdom aims to maintain its 5G market position and fulfill the goals set under the Saudi Vision 2030 initiative. The vision aims to increase the GDP by $16 billion through investment in research, development and innovation by the year 2030. The Ministry of Communications and Information Technology has taken significant steps to prepare for the widespread implementation and utilization of 5G, including implementing reforms in the telecommunications sector.
One of the key pillars of Vision 2030 is the digitalization of industries, which is a megatrend that is already starting to take shape. To achieve this objective, the country is taking advantage of cutting-edge technologies enabled by 5G, such as artificial intelligence (AI). In its efforts to promote the adoption of AI, Saudi Arabia is building AI-friendly ecosystems and supporting the implementation of data analytics solutions and smart city initiatives, such as the ambitious project of NEOM. A report by PricewaterhouseCoopers (PwC) projects that AI's contribution to the Kingdom's gross domestic product (GDP) is expected to reach 12.4%, amounting to US$135.2 billion by 2030.
By investing in cutting-edge network infrastructure like 5G Core technology and cloud solutions, Saudi Arabia is laying the foundation for digital transformation across key sectors like manufacturing, health, transportation, logistics and energy. According to the November 2022 Ericsson Mobility Report, the adoption of 5G in the GCC region is expected to grow rapidly, with subscriptions forecasted to increase from 15 million to 71 million by 2028 at an average annual rate of 30%.
Partnerships for Progress - Collaborating to Realize Saudi Vision 2030
Realizing Saudi Vision 2030 requires a collaborative effort, and partnerships serve as a vital catalyst in bringing together the resources, expertise and knowledge of various stakeholders to drive digital transformation and socio-economic development. They are essential in fostering innovation and creating new opportunities for businesses and entrepreneurs, while also ensuring that policies and regulations align with the needs of the market for optimal resource utilization.
We recognize the importance of partnerships in driving innovation and growth and have actively cultivated an ecosystem of collaboration that brings together private and government entities, as well as academia. One notable example is our ongoing R&D collaboration with King Abdullah University of Science & Technology (KAUST), which aims to advance next-generation communication systems, such as 6G. This partnership is set to enable government-backed digital initiatives and lay the foundation for future research in communication technology, ultimately positioning Saudi Arabia as a leading innovator in this field.
Navigating the Road Ahead
Through strategic funding, Saudi Arabia is embracing technology and the digital economy while striving to build an agile regulatory framework that supports emerging sectors. With a 98% internet penetration rate among its 36 million population, the country is poised for transformation. The Digital Government Authority is spearheading this change, with plans to create smart cities, improve digital healthcare, enhance infrastructure, implement autonomous transport and blockchain technology, and create a thriving e-commerce market projected to be worth over $13 billion by 2025. Additionally, the government has launched a $1.2 billion initiative to enhance the digital skills of 100,000 students by 2030, with a focus on cyber-security and programming.
Saudi Arabia is on the threshold of a new era, where the potential for growth is vast and the opportunities are endless. As digitalization continues to gain momentum in the nation, a strategic emphasis on network infrastructure, 5G technology and partnerships will be instrumental in ensuring the realization of a more interconnected and prosperous future. By fostering collaborations and investing in the development of world-class network infrastructure across the country, we remain committed to supporting Saudi Arabia in this journey.
