x Abu Dhabi, UAE Thursday 20 July 2017

ICT spending in Middle East to top $96 billion next year

The region’s spending will place it as one of the top three fastest-growing IT markets in the world, surging at a rate of about 7.3 per cent year on year.

Information communications technology (ICT) spending in the Middle East will top US$96 billion next year, according to a report from the research firm IDC, as infrastructure projects across the region spur the need for new technologies.

Leaving aside the telecoms sector, spending on IT projects will exceed $32bn across the GCC, Levant, Iran, Iraq and Egypt. The region’s spending will place it as one of the top three fastest-growing IT markets in the world, surging at a rate of about 7.3 per cent year-on-year, said IDC. It is superseded only by Latin America and central Asia.

Public sector investments to improve government services, education and health care will be the main drivers for growth. The numerous smart-city projects in the GCC in particular will increase machine-to-machine connections by 19 per cent to reach $224m.

Saudi Arabia is the region’s biggest market, accounting for almost $7bn of spending, while Qatar is one of the fastest-growing markets. Egypt will also experience a partial recovery, spending close to $3bn, although less than the amounts spent in 2007 and 2008, the report said.

The UAE’s spending will increase by 4.5 per cent, helped mostly by growth in software and preparations for Dubai Expo 2020, for which some $8bn in infrastructure projects have already been announced.

“The UAE is set to take the lead in smart cities,” said Jyoti Lalchandani, the group vice president and regional managing director for IDC Middle East, Africa and Turkey.

“There is a bigger amount of focus on smart city and the government is leveraging health care, education, transportation and smart economy making significant investments around upgrading infrastructures.”

In smart cities such as Masdar City in Abu Dhabi and Qatar’s Energy City, the mobile platform will become the prime focus. Technology including contactless payment and near-field communication (NFC), which enables the transfer of data wirelessly, will begin to take hold. NFC can be used instead of a Nol card on the Metro, for example.

“Mobile will be a game-changer. There will be a significant amount of mobile enablement and making sure that many government services are available on mobile devices,” said Mr Lalchandani.

Here, almost 40 per cent of government services are accessed online with a high satisfaction rate, and this is set to grow further as more government applications are made available online and on mobile.

Wordwide IT spending, by contrast, will grow 5 per cent next year to $2.1 trillion as sales of smartphones and tablets continue at “torrid” pace, IDC said.

thamid@thenational.ae