SME investments to 
drive UAE ICT growth

Quoting from the statistics released by Dubai’s Department of Economic Development, Sabbahuddin Khan, Regional Manager-ME, Allied Telesis, told Khaleej Times that of the 260,000 trading and industrial companies registered in the UAE, more than 200,000 are classified as SMEs.

In Dubai, this equates to a staggering 98.5 per cent of companies operating in the emirate, with more than 61 per cent of the workforce employed within this sector.

“During the recession, SMEs severely restricted their spending, especially on new ICT investments, and focused on leveraging the existing ICT infrastructure. However, the slowing economies of the developed nations and the cooling of demand for ICT products in the traditionally strong heartlands of America and Europe has created more opportunities for emerging economies like the Middle East. Also, as the global economy recovers, SMEs are strategically planning for their next ICT investments,” he said.

As GCC markets become more liberalised and competitive, ICT spending is likely to reach nearly $180 billion over the next three years. According to the recently released Kuwait Financial Center (Markaz) report on the GCC ICT sector, the UAE’s information and communication technologies industry will see $ 45.8 billion spending in the next three years, as a moderate growth of 10 per cent is seen against 18 per cent witnessed in the past five years, Sabbahuddin said.

According to him, despite the budgetary challenges, a relatively high level of growth is expected in the ICT market. As in other emerging markets, it is expected that the government will be the main client for ICT services for 2010.

“Telecommunication is an exciting sector in the UAE. In first nine months of 2009, mobile subscribers have neared 10 million, pushing the penetration rate to 221 per cent. The Internet subscriber base grew at a combined annual growth rate of 21 per cent from 300,000 in 2002 to 1.17 million in 2008. Internet penetration in the first nine months of 2009 grew to 65 per cent, against 59.5 per cent in 2008. Given these optimistic figures, we believe that unified communications, data centre services, and to a certain extent business process outsourcing, will all gain in prominence,” Sabbahuddin said. —ramavarman@khaleejtimes.com