MENA's ICT growth to decrease by 5% in 2009 (page 1 of 3)

While the previous years were marked by unprecedented growth in PC expenditure wherein Arab countries took advantage of high oil prices and overall economic boom to heavily invest in computer technology, the latest study pointed out that the scenario has since changed, owing partly to the ongoing global financial crisis. The study concluded that the region is likely to experience a 5% drop in ICT growth in 2009 as it eases its IT expenditure.

In terms of computer penetration the UAE has maintained the number one position, recording a 26.44% rate with 1.482 million installed computers in 2007. Led by the UAE, the top five rankings for PC penetration in the Arab World are dominated by GCC countries with Oman lagging a little further at eighth among 18 countries surveyed. Overall, the MENA achieved a PC penetration rate of 5.95% - while this figure indicates enormous business opportunities and huge market potential, prevailing economic conditions and a widely anticipated drop in overall expenditure will be the primary growth inhibitors of PC adoption.

The study also predicts a slight drop in mobile phone penetration, although this particular slowdown is more dependent on the corrections made on population figures in the GCC region. According to Madar Research, previous phone penetration estimates were drawn without having clear statistics about the number of expatriates in the GCC region; with the actual figures now available, a correction in future estimates will be made accordingly.

The effects of the global financial crisis and changes in population statistics notwithstanding, the ICT study emphasised that mobile phone subscription will remain the main driver of the MENA region's steady progress in overall ICT adoption. In particular, the study cited the recent decisions to award second mobile licenses in Palestine and Qatar in 2007 and 2008 respectively - effectively liberalising the two remaining monopolies in the MENA's mobile phone sector - as some of the major developments that will create a long-term impact on the region's ICT adoption rate.

Abdul Kader Kamli, President & Research Director of Madar Research Group, said:

"The ICT adoption index shows that almost all countries in the region have achieved steady progress in the adoption of information and communications technology. It is also clear that mobile phone subscriptions have remained the strongest driving force behind the widespread use of ICT tools across the Arab World. The liberalisation of the industry has certainly played a key role in unlocking its enormous growth potential in various countries. While corrections are expected to cause some short-term changes, we are optimistic of stronger long-term growth rates in the entire region, especially with Qatar and Palestine breaking the monopoly of their respective mobile phone sectors."

Nidal Abou Zaki, Managing Director, Orient Planet said, "Market liberalisation opens considerable growth opportunities and is very influential in boosting the confidence of investors in the MENA region. I believe we are still in a stage of transition wherein Arab economies are adjusting to various corrections and introducing and reinforcing economic policies. However it is already clear that the region is facing very bright long-term prospects as it aims to enhance the economic contributions of the ICT sector."

According to the 2007 Arab ICT Use Index, which gauged the vigour of ICT adoption in 18 countries, mobile phone subscription in the MENA region registered a 40.51% growth in 2007, helping sustain the significant progress in ICT adoption in the 18 MENA economies, whose ICT Use Index increased to 0.83 by end 2007, rising 30.21% from the previous year.