How the GCC’s Telcos are Powering Tech Start-Ups

The region’s telecommunications players have understood what’s at stake, and spending on telco services and information and communications technology is expected to rise 2.5 per cent in 2019 to $213 billion across the Middle East, Turkey and Africa, according to research firm IDC.

The telecommunications industry worldwide is at a cliff edge, as the consultant AT Kearney described it, but the GCC’s major players are embracing new technologies to stay ahead of the curve. As consumers in the region’s smart cities demand ever greater connectivity for a range of lifestyle device – whether these are smartphones or health monitors – and businesses begin evolving to meet these requirements, telecommunications majors will increasingly be called upon to facilitate these relationships.

Infrastructure players that fail to meet these requirements will likely lose business while considerably reducing residents’ quality of life. The region’s telecommunications players have understood what’s at stake, and spending on telco services and information and communications technology is expected to rise 2.5 per cent in 2019 to $213 billion across the Middle East, Turkey and Africa, according to research firm IDC.Bahrain’s recent announcement of the 5G roll out scheduled for June 2019, has created waves in the telecommunication industry by being the first in the region and among the first in the world along with China and the USA. Across the region, telco services including fixed-network services, wireless signals and other data-transmission technologies, constitute 60 per cent of overall ICT spending.

Transformative Technologies

Increasingly, this spending is going towards the transformative technologies of the Fourth Industrial revolution. Emerging breakthroughs in a number of fields such as robotics, artificial intelligence (AI), cloud and quantum computing, and the Internet of Things (IT) are expected to supercharge global economic growth in unprecedented ways. Just one technology, AI, could add $13 trillion to the global economy by 2030, lifting economic growth by an average of 1.2 per cent per year, the consultant McKinsey predicts. IOT could deliver returns sooner – up to $8 billion worldwide by 2022, Juniper Research forecasts.

GCC nations aim to harness these technologies for their citizens’ benefit, as laid out in plans such as the UAE 2071, Bahrain 2030 and Saudi Vision 2030. In strategising towards just such a socioeconomic digital transformation, the region’s telecommunications players have emerged among the most innovative in the world.

Bahrain, for example, ranks fourth worldwide in the UN’s global index for telecom infrastructure. Along with the UAE, it is only of only two Arab countries listed for their efforts to improve e-government and to provide public services online. The Kingdom extends its leadership in this sector with the 5G roll out, thanks to innovative approach by national operator Batelco.

Testbed for start-ups

This network will enable the Kingdom to attract new companies, as the nation’s start-up environment becomes more attractive and it consolidates its status as a testbed for enterprises in the technology business. In 2017, Batelco announced its partnership with Brinc MENA, a hands-on Internet of Things (IoT) hardware accelerator, to launch the Brinc-Batelco IOT Hub, which is the first technology hardware accelerator in the Middle East region. Bahrain acts a gateway to the $1.5-trillion GCC region, with cost efficiencies that make setting up business in the ICT sector 16 per cent cheaper than other Gulf countries, according to a report from the consultants KPMG.

More recently, over 100 successful start-ups and 3,000 delegates representing companies in artificial intelligence, blockchain, digital well-being, energy, fintech and investment from all over the world attended Unbound Bahrain 2019 in early March, eager to partner with early emerging market players and reach consumers in the Middle East and North Africa.

Telecommunications companies elsewhere in the region are also realising how state-of-the-art intelligent networks can reduce costs and reignite growth as mobile ceases its long growth spurt and prices drop in the face of competition and internet telephony. The UAE expects to have 5G at its Dubai Expo 2020 site at the end of next year, to cater to the communications needs of the 25 million anticipated visitors. Saudi Arabia, meanwhile, is also building a 5G infrastructure, with a view to create thousands of new ICT jobs by 2030.

As telcos struggle to deliver the same kind of revenues as before, not only can such a widespread embrace of new technology offset declining incomes, the move could also soon propel the region to pre-eminence as global telecommunications services centre.