Saudi companies are leading the adoption of 5G for digital transformation
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Saudi companies are leading the adoption of 5G for digital transformation

Saudi companies are leading the adoption of 5G for digital transformation

According to a new report commissioned by Nokia titled '5G Business Readiness,' Saudi Arabia is leading the race in 5G maturity.

  • 13% of Saudi companies rated as 5G mature, meaning they have deployed and are planning to expand their 5G networks.
  • The global research, evaluating the ‘5G maturity’ of companies in various markets, has found that 5G-enabled industries have the potential to deliver $8 trillion in global GDP by 2030
  • Globally 15% of the companies have invested in 5G and related technologies while more than a third plan to invest within next 12 months

While 5G adoption and fanfare entering into 2020 has had to take a backseat to the COVID-19 pandemic, many companies have still been looking into the potential it could bring to their businesses. 

Today, Saudi Arabia is at the forefront of this, who for years has been heavily involved in economic diversification efforts. 5G is one step on their path to fulfilling Vision 2030

According to a new report commissioned by Nokia titled '5G Business Readiness,' Saudi Arabia is leading the race in 5G maturity, with 13% of Saudi companies rated as 5G mature, meaning they have deployed and are planning to expand their 5G networks. Overall, 47% of technology decision makers have a long term 5G strategy.

Where Saudi Arabia currently stands in regards to 5G, as per Nokia's data.

The ‘5G Business Readiness’ report surveyed the 5G maturity of companies in various sectors such as mining and energy, public safety, transportation and health, around the world. It found that globally, 5G-enabled industries have the potential to deliver $8 trillion in value to the international economy by 2030. 

The report further lists significant variations by sector in terms of 5G maturity. Globally, those with the highest maturity are healthcare (10%), manufacturing (9%), and energy and utilities (7%), while 94% in transportation and 93% in mining sectors are currently investing or have plans to invest in 5G.

Also, it was observed that companies have accelerated digital investment as their response to the COVID-19 pandemic. Rather than stepping back from technology investment in the wake of the pandemic, most companies have strengthened it. 56% of decision makers surveyed in Saudi Arabia as part of Nokia’s research said they had accelerated their digital transformation programs as a result of COVID-19. 

Infographic: Nokia

This is somewhat in conflict with KPMG data released back in August, which found that in the immediate wake of COVID-19, Global 2000 companies moved to slash funding for emerging technologies, such as automation, artificial intelligence (AI), blockchain, and 5G. 

However, KPMG did note that 59% of executives surveyed say that COVID-19 has created an impetus to accelerate their digital transformation initiatives, though approximately four in 10 say they will halt investment in emerging technology altogether as a result of COVID-19. KPMG found that executives have shifted their focus to must-have technologies, like cloud migration.

Still, the Big Four firm did note that investments were expected to accelerate in the next 12 months, as the world gets accustomed to co-existing with COVID-19. 

As for those that did already invest in 5G, Nokia's report highlights a clear correlation between 5G deployment and business performance. Companies at an advanced level of 5G adoption were the only group to experience a net increase in productivity (+10%) following COVID-19, and the only group able to maintain or increase customer engagement during the pandemic.  

More interesting findings from Nokia's report

  • 54% respondents said they have their CXOs support for 5G implementation in their organization. 
  • New sales opportunities (65%) and improved data management (61%) are the top 2 impacts of 5G for those who have already invested in 5G.
  • Two thirds of technology buyers (65%) are planning to invest more in 5G than they did in 3G/4G technology.
  • 97% of technology purchasers have had their technology requirements impacted by COVID-19. 99% have had their strategic technology planning impacted.

What experts and industry members are saying
Darren Zhao, president for the Middle East and Africa at ZTE, had this to say about the GCC's role in the deployment of 5G, in a conversation with ITP:

“The GCC region has taken an early lead in the commercial launch of 5G. Based on the consideration of the early freezing of the NSA standard (Non-Standalone Access, which rely on existing on existing 4G facilities as opposed to standalone access/SA 5G facilities) and the pace of terminal support, it was inevitable to choose NSA as the first choice for deployment. Indeed, the deployment of NSA has accelerated the commercial process of 5G, but the technical limitations of NSA have also restricted the rapid development of 5G, especially in the deployment phase, the adjustments between 4G and 5G, which restrict and influence each other, greatly increase the cost of network deployment."

Mohammed Soliman, a non-resident scholar with the Middle East Institute’s Cyber Program, recently said the following about the importance of 5G for Saudi:

"A cornerstone of Saudi Arabia’s Vision 2030 initiative is its goal of transforming the kingdom into the region’s digital hub. Given this strategy and Saudi Arabia’s position as a G20 economy and the most populous country in the GCC, Riyadh felt pressure to enter the era of 5G faster and on a larger scale than its Gulf peers. In October 2019, Saudi Arabia’s leading carrier, Zain, partnered with Huawei to introduce the first phase of its 5G network, which covered 20 cities in the kingdom with 2,000 towers and provided Saudi Arabia with the biggest 5G network in the region."

Ryan Grace, a Graduate Fellow with the Cyber Program at MEI, said:

"The deployment of 5G in the Gulf is expected to spur domestic growth and build out the 'central nervous system of the 21st century.' While much of the attention given to 5G is concentrated on glamorous technologies like virtual/augmented reality and self-driving cars, more traditional industries also stand to benefit from 5G adoption. Industrial Internet of Things (IIoT) technology in the oil and gas sector will enable more efficient monitoring and data collection. According to a report from STL Partners, the oil and gas sectors stand to increase their contribution to GDP by nearly 4.9% through the implementation of 5G and IoT technologies."

Author
Mark Anthony Karam

Mark Anthony Karam was an Editor at AMEinfo between 2018-2021. You can get in touch with him on LinkedIn here: linkedin.com/in/m-a-karam/

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