x Abu Dhabi, UAEFriday 21 July 2017

Tech-loving youth expected to fuel regional IT growth

A young population with an unquenchable thirst for new gadgets and increasing demand for better telecoms infrastructure will see IT spending in the Middle East grow 5.5 per cent this year to US$192.9 billion.

A young population with a seemingly unquenchable thirst for new gadgets and increasing demand for better telecoms infrastructure will result in IT spending in the Middle East growing 5.5 per cent this year to US$192.9 billion (Dh708.5bn), according to the research firm Gartner.

The region is set to spend $148.5bn on telecoms services this year, up 5 per cent compared with last year, to build up the fixed and mobile infrastructure as demand for data surges. Global IT spending, meanwhile, is expected to reach $3.7 trillion this year.

Another $29.6bn will be spent on devices such as PCs, tablets and mobile phones, up 7.7 per cent. Spending on mobile phones alone will rise 64 per cent between this year and 2016 to $32.7bn.

"The growth rate in the Middle East is higher than the average globally," said Peter Sondergaard, the senior vice president and global head of research at Gartner. "There is a high level of spending on consumer-based technology and on subscription-based services for mobile voice and data. That is essentially what is driving the market.

The global rate of growth is set for 4.2 per cent this year as IT budgets become more resilient in the face of economic uncertainty.

"There is a very strong correlation between the level of gross domestic product growth and that of spending on technology," said Mr Sondergaard. "Consumerism drives down the price of technology and increases the adoption of new technology. This drives the change that we think will impact government agencies and private companies over the next couple of years."

Greater spending within the banking and government sectors are likely to emerge in the region, Gartner said, as various industries seek to take advantage of the increased reliance on technology.

Despite the rate of growth, the region still lags in terms of investment in software-based technology, which registered no growth last year, while spending on IT services was down 4 per cent.

"Over the next three to four years we will see an acceleration of software spend that will lead to a faster catch-up of what we're seeing in other markets," said Mr Sondergaard. "Investment will be more infrastructure-focused rather than customer-facing over the next few years in the region."

 

thamid@thenational.ae