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Kuwait 2018 | TELECOMS & IT | REVIEW

Kuwait's mobile penetration rates are among the highest in the world, and the government is working to establish a tech start-up ecosystem.

Kuwait has seen mobile and internet penetration rates increase as the population has become one of the world's wealthiest. High levels of investment in telecommunications infrastructure have given the Kuwaiti population connectivity rates on par with OECD countries, and government leaders are looking to take the next step by integrating this increased technological literacy into the larger economy. Increasing knowledge-based economic output has long been central to the country's diversification plans, and new initiatives aimed at increasing the ease of establishing IT-based businesses and building connectivity with international firms hold the potential to transform the sector in the years to come.

Kuwait's mobile penetration rate is upward of 90%, well ahead of the average of 76% within the GCC and among the highest rates in the world. The overwhelming majority of these are up to par with the fastest global standards; broadband connections accounted for 87% of mobile connections in 2017, and this number is expected to hit 95% by 2020. Kuwait was one of the first GCC countries to install a LTE network in 2011, and it expects to see over 40% of total connections reach 4G speeds by 2020. The mobile market is fairly mature, with three well-established telecom operators. Ooredoo, Viva, and Zain all hold market shares of more than 30%, making the market remarkably competitive. Viva is the newest and fastest growing of the three; since its arrival in December 2008 the Saudi Telecom-owned provider has used an all-IP network to offer speeds of over 100Mbps. As of 2016, it was the second-most popular network, with a 31% market share and 34.5% market revenue.

Spurred on by competition and the high demands of Kuwaiti consumers, Kuwait's mobile providers have been at the forefront of pushing new network upgrades and adapting to new technologies. Zain, the market leader at 38% of customers and 41% of revenue, announced in September 2017 that it had successfully tested 5G technology capable of achieving speeds of more than 70Gbs. According to Viva, Kuwait's mobile usage demand is the highest per capita rate in the world—the average Kuwaiti uses five times as much data as users in South Korea and Hong Kong. Industry leaders believe that boosting the strength of the mobile network will do more than just give consumers faster data speeds; the goal is to leverage Kuwait's connectivity to develop more efficient management systems. Government leaders have discussed the prospect of smart cities powered by Internet of Things initiatives and better data tracking of traffic and waste management flows to improve quality of life and offer new options for Kuwaiti industry. The speed and utility of 5G mobile networks are at the core of these ambitious plans.

Kuwait's regulatory environment has undergone improvements in recent years, but a lack of clear structure and inconsistent government direction remains a frequently cited obstacle to growth. In 2014, a governmental decree established the Communication and Information Technology Regulatory Authority (CITRA), which replaced the Ministry of Communications as the oversight body for the telecommunications sector. CITRA issues licenses, manages spectrum allocations, and mediates disputes between providers and consumers. Its position as a recently formed regulatory body and its wide-ranging powers in what has become one of Kuwait's most important sectors has made it a lightning rod for criticism at times; providers have urged it to focus on further liberalizing the telecoms market by giving private operators more ability to invest in infrastructure. Work on establishing a stable regulatory framework is underway, however, and private industry leaders have expressed confidence that CITRA will help bring about new growth once it has found its footing.
With the needed infrastructure in place and improving rapidly, Kuwait is focusing on using technology to bring about new economic opportunities. The country's technology industry, though still small, has seen strong growth in recent years thanks to government and mobile provider-funded accelerator programs that have worked to use international knowledge transfers to solve Kuwait-specific problems. Kuwaiti start-ups are eligible from funding from the Kuwait National Fund, which uses its KWD2 billion of capital to help finance SMEs. Mobile provider Zain recently launched a tech entrepreneur program that brought young Kuwaitis to London and San Francisco to make connections in some of the world's most vibrant technology hubs. The impact of these initiatives will not be felt immediately, but by laying the foundation for a knowledge-based economy, Kuwait is working to turn its well-connected population into an economic driver.