ICT Opportunities in Saudi Arabia

Saudi Arabia aims to become a regional leader in an information society and the field of Information and Communications Technology (ICT). This will be achieved through the Kingdom’s 20-year ICT plan which aims to conclude the ICT’s Home PC Initiative as well as nurture strong allianc¬es with global leaders in this field.

According to Research, the main drivers of growth in Saudi Arabia ICT sector are:

- The convergence of telecommunications and the media
- An improving regulatory environment
- Largest Middle East IT market with spending of 2.3 billion dollars in 2005
- IT Market is estimated to reach US$3.8 billion in 2010.
- WTO accession is expected to increase ICT market growth
- A high demand for e-services from both the public and the private sectors
- Heavy investment in creating a leading ICT economy
- Development of Smart Cities
- One Billion SR for e-education projects

ICT Promotion

In addition to market liberalization and regulation, many government agencies have engaged in a number of Public-Private partnerships and initiatives to boost ICT usage and development.

Increase computer literacy and penetration in the Kingdom
- Enabling families to obtain computers through easy affordable process
- One Million over for the next five years

International partners

- Impressive rise in computer sales in 2006 to $1.5 billion

Promote the adoption of ICT products and services to improve productivity

- Managed Services - Service creation, channel development
- Development - ICT capacity building and education
- Enablement - B2B and G2B services to simplify information exchange

Transform Saudi Cities to connected, digitally enabled information islands with ubiquitous access and e-Services

- WiFi/WiMAX mesh on shopping district in Riyadh
- Unwired Arab Open University buildings
- National projects like; e-Sadad, Smart Cards, e-Umrah, e-trade, e-tax,…

THE MARKET

In terms of revenue, Saudi Arabia is already the largest telecommunications market in the Middle East and North Africa (MENA) region, constituting 30% of the overall market share as follows:

- Largest Middle East IT market with spending of US$2.3 billion in 2005 
- Total fixed line subscribers is 4.0 million
- Mobile subscribers are 12 million and is expected to increase by nearly 40% to 16.8 million
- The PC installed base is 2 million and is anticipated to see a rise to 3 million by 2010
- Current Internet subscribers are 1 million and broadband usage is a miniscule
- Initially 3 billion Riyals allocated government investments for e-Transactions services
- Saudi Arabia accounts for 64% of B2B commerce in the GCC
- Saudi Aramco plans a major expansion
- SABIC and the private sector have 79 petrochemical-related up-comming projects 
- The telecommunications sector is undergoing progressive deregulation 
- Power and water projects with a value in excess of US$260 billion
- IT and telecommunications Manufacturing is set to grow
- Venture capital funds targeting creative local startups and knowledge transfer


BUSINESS OPPORTUNITIES

Given the Saudi Arabia government’s heavy investment in education and the nurturing of the entrepreneurship culture as well as its dedication to creating jobs to meet the demands of the youthful and growing population, the estimated growth seems highly attainable. With today’s booming economic environment in the Kingdom and Middle East, these considerations should be linked to the major growth being experienced across the economy:

Manufacturing of ICT hardware and the development of software are already features of the market and these are set to expand further. For example, with SAGIA’s initiatives, a VC Company has been set up as a public private partnership with a capital of US$100 million aiming to invest in technology companies located in Saudi Arabia. This is an indication that there is potential for international companies to participate in the ICT expansion alongside global operators already acting as advisors or investors or even to establish other similar companies.

In a highly fertile environment, substantial foreign investment opportunities are anticipated in the Kingdom’s ICT sector. In IT, e-learning, e-commerce, training, content developments in Arabic for some software application, website domains, e-libraries and e-commerce, and the manufacture of hardware are all deemed high potential investment opportunities.

The Saudi Arabia ICT market has high potential, especially since the Kingdom’s attainment of the WTO membership, opening the opportunities to international investors.

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