How the role of telecoms is evolving in the Middle East

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Bart Valkhof, Head, Information and Communication Technology Industry, World Economic Forum, Omar Adi, Partner Lead, Middle East & Africa, World Economic Forum

• The global telecommunications market is expected to grow to $2.65 trillion by 2030; the Middle East is no exception to this growth trend.
• Emerging technologies are changing the way telecoms operate and making the industry more resilient.
• There are many opportunities in the Middle East to help drive sustainable transformation.

The global telecommunications industry is undergoing major transformations. Although discussions about digital transformation seem to be dominated by large language models (LLMs) and artificial intelligence (AI) powered software and applications, all of this is underpinned by hard infrastructure – largely deployed by telecoms. This is leading to sustained growth of the industry. Valued at $1.81 trillion in 2022, the global telecommunications market is expected to reach $2.65 trillion by 2030.

At the same time, emerging technologies are changing the way telecoms operate, positively impacting resilience of the industry. A survey by Accenture finds that 99% of telecommunications executives believe emerging technologies will help their organizations remain resilient on the global stage. For example, by leveraging new technologies such as AI internally, telecoms can decrease network performance problems and critical incidents by 60% and 35% respectively. Moreover, automation can also help reduce energy costs by 15%, and make the telecommunications network more economically and environmentally sustainable.

By integrating new technologies into their service portfolios, telecoms can further monetize its infrastructure investments and diversify their services. For example, telecoms worldwide now offer competitive, innovative solutions to businesses that drive productivity, streamline processes, and contribute to the overall competitiveness of these businesses. Among other things, this involves the provision of robust and reliable communication networks including Network-as-a-Service (Naas) cloud services, internet of things (IoT) connectivity, cybersecurity services, and other technology-driven solutions.

Leveraging regional strengths

The telecommunications industry in the Middle East is no exception to these trends. For instance, the value of the telecom market in the Middle East is forecasted to increase by $20.57 billion between 2021 and 2026.

Especially in the Gulf Cooperation Council (GCC) countries, telecoms leverage strong macroeconomic developments in domestic markets, and a relatively wealthy and tech savvy population to invest heavily in the deployment of 5G, offering a wide variety of services to consumers and businesses alike, and ultimately positioning themselves as important enablers of the digital transformation. As a result, the average monthly mobile data usage per smartphone in the GCC is expected to be 30 GB per smartphone at the end of 2023, ahead of North America and Western Europe.

New technologies and changing business models

The deployment of 5G technology is pivotal to accelerating the shift from a customer-focused approach to a business-centric model and the Middle East has been at the forefront of 5G integration, with 61% of companies in the Middle East planning to invest in 5G-enabled campus networks. The rise of 5G networks represents a seismic shift, allowing for seamless connectivity of a massive number of devices simultaneously, but also enabling unprecedented data speed, and low latency rate.

Recognizing the transformational power of 5G, e& in collaboration with Ericsson recently achieved the world’s fastest 5G downlink speed unlocking, for instance, numerous opportunities for industrial IoT, augmented reality, and digital twins which are becoming indispensable for sectors such as manufacturing and energy. So, how is e&’s evolving business model impacting other industries?

Hatem Dowidar, Group CEO, e&, said: “e& has established itself as a market leader in technology, having implemented one of the fastest mobile and fixed networks globally. We also recognize the need to evolve our business model, as network connectivity is a key enabler for our key services.

“With 5G, we can offer enterprise solutions in autonomous driving, smart city (IoT), and healthcare as well as new consumer services using augmented and virtual reality (AR/VR) and in areas like e-sports where there is a need for high bandwidth and low latency to support our customers.

“These customer centric solutions, which support many other industries, will accelerate the digital transformation of customers in our developed markets, while bridging the digital divide for customers in our other operating markets by leapfrogging through new technology capabilities.”

With 6G technology poised to revolutionize communications and connectivity, adoption plans are moving ahead with the UAE announcing launch for 2030.

Other technologies such as cloud computing, edge computing, and AI are also becoming integral components of telecom offerings, allowing businesses across industries to increase their productivity, predictive maintenance, and data-driven decision-making. Advancing the convergence between telecommunications and technology, Qatar’s leading provider of ICT services, Ooredoo, and Microsoft partnered to provide digital solutions to businesses and make them more efficient, cost-effective and ready for the digital future.

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At The Davos Agenda 2021, the World Economic Forum launched the EDISON Alliance, the first cross-sector alliance to accelerate digital inclusion and connect critical sectors of the economy.

Through the 1 Billion Lives Challenge, the EDISON Alliance aims to improve 1 billion lives globally through affordable and accessible digital solutions across healthcare, financial services and education by 2025.

Read more about the EDISON Alliance’s work in our Impact Story.

Shaping digital transformation through strategic partnerships

Strategic collaborations with industrial organizations are another example of how telecommunications companies in the Middle East are actively seeking to participate in the digital transformation journey of industries and societies. By forging partnerships with key players in various sectors, telecoms are not only empowering industries to embrace cutting-edge technologies but are also leveraging their expertise in connectivity and technology to position themselves at the forefront of innovation.

For instance, recently the STC Group partnered with Hyundai E&C and KT to construct data centres and establish IT infrastructure for a smart city in Saudi Arabia.

Beyond innovation and competitiveness, these strategic partnerships also extend towards a responsible deployment of digital infrastructure. The region is well represented in the World Economic Forum’s EDISON Alliance, which is a collaborative initiative to foster global digital inclusion, aiming to connect 1 billion people by 2025 to essential services like healthcare, education, and finance through digital platforms.

Also, as part of the collaboration within the GCC Telco Alliance, telecoms have announced the establishment of a Sustainability Innovation Hub. The innovation hub project has an objective to focus on climate change in addition to endorsing the availability of affordable and dependable energy sources.

Olayan Al Wetaid, CEO of stc, said: “We prioritize sustainable, secure, and inclusive digital infrastructure to drive the future of connectivity. Our successful efforts in these areas are a testament to our regional and global partnerships. Through these collaborations, we confidently drive innovation, transforming the way we live, work, and connect. This ensures that our digital ecosystem is not only resilient but also empowers diverse communities and enriching people’s lives.”

Future of telecoms in the Middle East

The telecoms industry, particularly in the GCC countries, is uniquely positioned to harness emerging technologies that can drive sustainable transformation. With a focus on strategic partnerships, organizations can leverage cutting edge technologies for wider public good in areas such as healthcare and education. Digital connectivity can help bridge the digital divide and empower communities.