GCC to spend $7.8bn on IT in 2007

The region's technology spend is predicted to grow by 15% this year - with Saudi and the UAE leading the way.

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By  Ben Flanagan Published  January 24, 2007

The six GCC countries are expected to spend $7.8bn on IT this year, up 15% on 2006, according to a report by market intelligence firm IDC.

Despite the expected surge in IT revenue – attributed to high oil prices and economic diversification – growth is expected to be slightly slower than in 2006, when the market expanded by 19%.

Saudi Arabia, with a 45% share, is currently the region’s biggest spender on IT, with the communications sector dominating. Wider competition could see this trend continue: later this year, the Saudi telecoms regulator is expected to issue two new operator licenses, one for a fixed-line provider and one for a mobile provider.

While its population is just a tenth of Saudi Arabia, the UAE places second, with a 33% share of the GCC IT spend. Here too the communications sector was the single largest investor in IT. Government was the second largest and agriculture, construction, and mining the third largest.

"While the communications sector invested more in IT [...] in the UAE in 2006, the government sector proved more interesting," said Philip van Heerden, program manager, IDC MEA. "[It] is continuing its IT infrastructure drive to support egovernment, including electronic documentation, centralization of records and records management, and integration of payroll and pension systems. The variety of activity means lots of opportunities for vendors."

Bahrain, Kuwait, Oman, and Qatar together represent just over a fifth of IT spending in the region. The banking, process manufacturing, and communications sectors led in terms of IT investments, accounting for half of IT spending in the four countries.

Of the six GCC countries, Bahrain leads in IT investments as a proportion of GDP, and was second after the UAE in IT spending per capita.

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