ABU DHABI GOING DIGITAL

Abu Dhabi 2019 | TELECOMS & IT | REVIEW

The ICT sector remains on track with strong government support and commitment to turn Abu Dhabi into a truly smart city.

The Middle East region as a whole is expected to maintain its level of ICT spending with forecasts of USD235 billion in 2018, according to BMI Research. The trends in the sector would be following regional investments on the third platform—cloud, big data analytics, mobile, and social, as well as emerging technologies such as the internet of things (IoT), artificial intelligence, augmented and virtual reality, 3D printing, and blockchain—many of which are gaining more prominence in the Middle East.

Among the subsectors, data from the research firm International Data Corporation (IDC) shows that IT services (6%) and software development (4.8%) will be growing at a higher pace in the region, while the growth will be more moderate in the case of servers, storage, and networks (2.3%) and mobile devices (2.2%). IT peripherals and displays (-1.4%) and PC and tablets (-2.7%) will experience a decline.

UAE TRENDS

Looking at the UAE, estimates by Atradius market research indicate that the country's ICT market was valued at USD4.5 billion in 2017. The value added growth of the sector is expected to increase at a rate of 4.3% and 4.5% in 2018 and 2019, respectively, which is slightly above the average sector growth over the past three years (4.7%).
However, the overall local market will be marked by small profit margins and increased competition. Electronics for end-consumers maintained consumption levels during 2017 and are expected to grow in 2018.
Other ICT subsectors will maintain their dynamism across the different Emirates. In particular, Abu Dhabi has been recognized in 2018 by McKinsey & Company as the "Middle East and Africa's most developed Smart City," in terms of technology base, high-speed communication networks, critical mass of smartphones, open data portals, as well as digital sensors.

E-GOVERNMENT AND THE PUBLIC SECTOR

The push from the UAE government toward digitalization has been a major driver for growth of the ICT sector in the country. And efforts are paying off and the country has been ranked sixth in the Online Services Index (OSI) and second in the Telecommunication Infrastructure Index (TII), according to the E-Government Development Index (EDGI) Survey 2018 issued by the UN Department of Economic and Social Affairs (DESA).

These global achievements make the UAE a reference country in the implementation of ICT in government services and set the country ahead of many advanced economies and first in the MENA region.

Commenting on the government-driven opportunities, Shaik Hamdan, CEO of NEXT IT Systems, told TBY: “From a blockchain perspective, it is only recently that the Abu Dhabi Municipality took an actual interest in having the proof of concepts (POC) to implement blockchain projects."

In line with this, an MoU was signed between the Department of Economic Development-Abu Dhabi and Algorythma, a UAE-based technology service company, to push forward the digital transformation agenda. Under the agreement, the Centre at Krypto Labs, in Masdar City, is aimed at enabling best practices and bringing the latest technological developments to the Emirate as part of Abu Dhabi's strategy to support the ICT sector.

SMART CITY SERVICES

Service provider Etisalat will be a key player in driving Abu Dhabi's transformation toward a smart city. The Abu Dhabi-based telecommunication company realizes that to fully exploit the potential of the IoT, it must at the same time develop new capacities and build partnerships across the whole value chain to eventually build an ecosystem where a wide range of applications will serve multiple industries. The sheer scale of IoT means that the ecosystem will be made up of many players focused on different levels of the value chain, some providing niche IoT products for specific verticals and others attempting to provide horizontal, cross-industry solutions.

As such, Etisalat's vision of the network architecture to support IoT takes into consideration the many uses IoT presents, with a recently published white paper focusing on three in particular. The first one concerns smart farms, which will be able to monitor and analyze the soil and environmental conditions as well as third-party data, such as weather information to enable automated decision-making around engaging certain farm systems such as irrigation system, crop treatment, or perhaps harvesting. The second one revolves around increased security and response to incidents on public transportation through automated analysis of CCTV footage. Edge (fog) computing can process CCTV footage from public transport close to the edge of the network to identify instances of disturbance, risk, crime, and more. The third example mentioned in its white paper is around data on field-force workers. This data, captured by augmented reality devices and data on the environment and equipment can be processed locally to ensure a rapid response if a dangerous situation is occurring, ensuring greater field-force worker safety.

E-COMMERCE

According to BMI Research, the UAE is the e-commerce market leader in the GCC, accounting for 50% of regional online sales and is expected to reach USD20 billion by 2020. On the demand side, the UAE's young population and high purchasing power will be the driver for online consumption. About 64% of the country's population is under 31, and the average online purchase in the country is above USD300.

Internet penetration and smartphone usage in the country has also been key to the success of e-commerce. According to 2017 data, 90% of the population in the UAE has access to the internet, while the percentage is only 60% in the case of the whole Middle East region. Additionally, 80% of the UAE population are considered to be active smartphone users.
When buying online, Emiratis show more interest in international websites; online purchases mainly take place on websites from the US (30%), the UK (18%), and India (18%).