October 2, 2012 by Dan Swinhoe
Following our look at opportunities for SMBs in the Middle East, we turn our focus to Qatar and its thriving IT market. While BYOD and the cloud may be the big buzzwords being thrown around, there are many other positives and opportunities when looking at Qatar.
Last year alone the ICT market posted a growth of 21%. Its mature market is looking ahead to the cloud, fiber-optics and replacing their old smartphones. The 2012 Global Information Technology Report saw Qatar overtake the UAE as the second most IT-savvy country in the Gulf, one place behind Bahrain. The report explains how the country “Has managed to create one of the best environments for entrepreneurship and innovation worldwide.” The report wasn’t all complimentary however. “On a less positive note, the low levels of competition existing in the ICT and telecommunications sectors are affecting the overall affordability of accessing ICT, especially in terms of broadband, hindering a wider diffusion and usage of ICT across the different agents in the country, such as broadband Internet subscriptions.”
In order to remedy these problems, Qatar’s state-backed Qatar National Broadband Network Company (Q.NBN) has announced its plans to invest around half a billion dollars upgrading its broadband network, introducing fiber-optics and boosting capacity for new telecom operators. CEO Mohamed Ali Al-Mannai said, “We see there is the potential opportunity for more competitors to come into the market, but in which form this is not clear yet, whether it would be a full telco operator or a small service provider.” With an eye on the 2022 World Cup, the company aims to up high speed fiber optic penetration to 95% from the current 5%, reaching 30,000 homes by the end of 2012 and 300,000 by 2015.
BMI’s expectations of the country are also rosy. “With its booming economy and ambitious ICT investment program, Qatar is expected to be the fastest-growing IT market in the Gulf region over BMI’s five year forecast period.” IT spending is expected to reach $533mn this year, up 15%, and they expect the World Cup “to fuel a new wave of investment, while the government’s ICT-2015 strategy will also create opportunities.” One of the biggest earners from all this has been Samsung; the electronics giant bagged $17.5m worth in sales last year, and has been averaging growth of around 40% for the last few years.
One of the most popular products Qataris are buying is smartphones. Penetration has reached 75%, with the 15-34 year olds buying the majority of the devices. A report by Nielsen shows apps are largely absent, with around 65% of all smartphone users having no apps on their phones at all. The report also noted that of the 25% that didn’t own a smartphone, almost half cited price as the biggest barrier. Clearly cheaper devices and a way to draw owners into using apps are high on the list of requirements.
In this year’s Global Innovation Index Qatar is the highest rated in the MENA region, coming 33rd worldwide. The index ranks 141 countries/economies based on their innovation capabilities and results, and includes some 15 economies from the Middle East and Northern Africa. Though Qatar’s nearest rival is UAE in 37th, the country has fallen seven spots on last year. It seems jobs in the country are on the increase too. According to the Monster Employment Index Middle East, online job opportunities in Qatar were up 34% year-on-year, with tech jobs among the most popular listings.
As with any country, there are problems. The government acknowledges there are connectivity issues, skills shortages and certain business environment challenges, but these are fairly small/ trivial compared to other, less developed MENA countries. But overall, whether telecoms, software, electronics or innovation- Qatar is on the up. Growth across the industry is sky high and with the World Cup coming investment will keep flooding in to the country. Couple this with the government’s dedication to ICT and their 2015 plan and you’ve got a recipe for success.