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Public Policies Generating ITC Opportunities. Communications and Information Technology Commission Saudi Arabia Casablanca, February 2006. Table of Content. Sector Reform Regulation Framework Liberalization of The Saudi ICT Market ICT Market In Saudi Arabia

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slide1

Public Policies Generating ITC Opportunities

Communications and Information Technology Commission

Saudi Arabia

Casablanca, February 2006

table of content
Table of Content
  • Sector Reform
  • Regulation Framework
  • Liberalization of The Saudi ICT Market
  • ICT Market In Saudi Arabia
  • Enhancing Regulatory Frame work – ICT Policies
  • National ICT plan
  • ICT Initiatives
population economy of ksa
23 Million

GDP Trillion 1.15 SR 306.7 Billion USD

GDP Growth 2005 Real 8.9%

GDP Growth 2005 Nominal 22.2%

Red Hot stock Market (10 Billion USD trading volumes per day)

Population & Economy of KSA
sector reform
Establishment of Saudi Telecom Company (STC) in 1998 and CITC in 2001.

STC has developed the ICT infrastructure.

The legal framework has been established.

Private sector and foreign investment participation

are the focus.

Sector Reform
regulation framework

6/2001

Regulation Framework

Telecommunications Act

Telecommunications Ordinance

Telecommunications Bylaw

The adoption of this legislation has opened the telecommunications market for competition, and has laid the legal framework for the development of a competitive telecommunications sector.

communications and information technology commission citc
Communications and Information Technology Commission(CITC)

June 2001

Establishment of the “Communications and Information Technology Commission”

An autonomous entity that enjoys financial and administrative independence.

Responsibilities Include:

  • Creating enabling environment that is pro competition.
  • Protecting public interest.
  • Securing the right to access public network at affordable prices.
  • Fulfilling its mission with transparency and fairness.
  • Encouraging investment in information technology services .
  • Developing a national information technology plan .
  • Implementing both e-Government and e-Commerce initiatives and encouraging technology usage.
liberalization of the saudi ict market
Liberalization of The Saudi ICT Market
  • CITC has opened the doors forincreased business opportunities for local and foreign investment in:
    • Mobile services
    • Fixed line services
    • Data Services
    • Internet services
    • Other services and advanced technologies
ict market in saudi arabia
ICT Market In Saudi Arabia

Mobile market growth has been tremendous:

  • Sizeable and fast growing subscriber market
  • Potential for high penetration levels
  • (2006, 14 Million Subscribers, Penetration 70%)
  • Attractive demographics
  • Stable macroeconomic environment
slide9

ICT Market In Saudi Arabia(Continued)

  • Internet services commenced in Saudi Arabia in 1998.
  • Today, the number of internet users close to 3 million approximately representing a penetration rate of about 13%.
  • The ISP market is fully competitive, 30 ISPs are currently operating kingdom-wide
  • Further growth in penetration of internet services is expected due to several initiatives that are under way
the saudi ict market is estimated at 2 20 billion in 2005
The Saudi ICT market is estimated at $2.20 billion in 2005

Saudi Arabia as % of global market

Hardware

0.19%

Software

0.12%

IT services

0.13%

Compared to Saudi GDP, which is 0.7% of the world’s total, Saudi Arabia ICT sector is below its potential size

Spending = $1.78 billion

Source: Digital Planet 2003, IDC (2003)

Source: IDC (2003)

This section will focuses on the IT sector, digital content development, and unregulated value added communication services.

Regulated communication services will be covered in a separate section

enhancing regulatory frame work
Telecom Act has been enhanced to include IT and services and development mandate

E-Transactions Law has completed its review cycle and about to be issued

Computer Crime Law is under review

Anti SPAM directives under review

Enhancing Regulatory Frame Work
the national it plan
The National IT Plan

Selected Targets in the 5-year plan

Vision

  • The transformation within two decades into an information society and the attainment of a digital economy so as to increase productivity and provide IT services for all sections of society in all parts of the country and to build a solid information industry that becomes a major source of income
  • Local IT industry: 5 billion SR
  • IT sector will employ 2% of the labor force
  • Establishment of 1 Tech Free Zone, 2 technology parks, 6 incubators
  • Automation of 50% of government procedures
  • Construction of 10 national databases
  • 5% of university students will specialize in IT majors, and graduates will reach 3750 annually
  • 30% of educational curricula will be interactive

2002

Launch

2004

Draft plan is published

2006

What is next?

Components

  • Urgent initiatives
  • Long-term vision
  • 5-year plan
opportunities in the it services sub sectors
Opportunities In The IT Services Sub-sectors

Market size 2003

($ million)

Market size 2008

($ million)

IT services sub-segment

CAGR Growth

Business opportunities

$208

$295

7%

  • SME market
  • Subcontracting from large IT service providers
  • Niche expertise

Hardware & software support & deployment

$50

$105

16%

  • Government training
  • End customer driven training

IT training and education

$205

$307

11%

  • Increased subcontracting by large service providers

System integration

$42

$91

16%

  • Lack of qualified IT staff will push large companies and government to outsource

Outsourcing total

$83

$141

11%

  • CRM and ERP applications for SME

Customization

Source: IDC (2003)

strengths and weaknesses of saudi ict industry components
Strengths and Weaknesses of Saudi ICT Industry Components

ICT segment

Strengths

Limitations

Business opportunities

  • High market growth
  • Home PC plan
  • Hydrocarbons industrial base. May require customized hardware
  • Lack of large anchor industries
  • Relatively high production cost
  • Limited innovation
  • PC assembly
  • Niche applications (military, etc)
  • Customized computer hardware

Hardware

  • High market growth
  • Limited and expensive skilled labor pool
  • Limited innovation
  • E-Government
  • Hydrocarbons industry specific applications

Software

  • High market growth
  • Well established, well staffed, and internationally affiliated players
  • Limited labor pool
  • Opportunities in public and private sectors, large and small corporations
  • Subcontracting

IT Services

  • Large and growing retail market
  • Major government initiatives in e-learning
  • Saudi advantage in religious and Arabic
  • Relatively low PC and DSL penetration
  • E-learning
  • E-entertainment
  • Mobile value added services

Digital Content

current it initiatives
Saudi Home Computing Initiative (SaHCI)

Sold 10,000 PCs in 3 months

PC+MS office &MSW + Internet + training @ $26.6 USD/month

E-Government Initiative

SMB automation initiative

DSL for 2 years, server, desk top PC, 2 Laptops, training, WLAN, Emails, Printer, web presence $400 USD/month

Current IT Initiatives

Grass Root Initiatives– Through PPP

slide16
E-government initiatives will be worth around $5 billion, and will be an opportunity to develop locally some e-government platforms

2

Saudi IT Opportunities

Opportunities for Saudi IT companies

GCC Country

Current phase

E-gov Global

Readiness rank

Budget

($ million)

  • Large contracts to leading IT service providers
  • Subcontracting by leading vendors to smaller IT service providers
  • Development of customized solution by smaller IT companies to some Saudi government agencies
  • IT training for public sector employees (both large and small players)
  • Outsourcing of some government functions to both small and large players)

Saudi Arabia

Phase I

105

5000

UAE

Phase II

38

1000

Kuwait

Phase II

90

450

Oman

Phase I

98

250

Qatar

Phase III

77

200

Bahrain

Phase III

46

150

Source: Madar Research (2004))

current it initiatives1
Saudi CERT – Security Initiative

Smart Cities Initiative

Riyadh transformation into a digital city

B2B exchanges

Current IT Initiatives

Grass Root Initiatives

current it initiatives2
Three Technology Parks are under way

Three VC funds established (300,200, 5o Million USD) Alll private

The new vision for the City of the future King Abdullah Economic City

Current IT Initiatives

Leading to New opportunities

Requiring Industry development efforts

to push Innovation, Entrepreneurship

and Growth; Therefore :-

providing arabic content is one of the best opportunities for existing and new saudi companies
Providing Arabic content is one of the best opportunities for existing and new Saudi companies

2

Internet Content in Saudi Arabia

Preferred Language on the Internet

The unmet need

76% of those who prefer Arabic content think that there is limited Arabic content on the internet

What is missing in Arabic content ?

% stating

Entertainment

52%

Educational

39%

International news

34%

Religious content

34%

Local news

30%

Sports

19%

Arabic websites 1.2% of total

Source: Arab Advisors / Connexus Survey of 1037 individuals, 2005

and in e learning
… and in e-learning

2

E-Learning Opportunities

E-Learning in Saudi Arabia($US million)

Business Opportunities for Saudi Companies

Non Comprehensive

Out of the box content customized & arabized to KSA

  • Representation of international e-learning publishing houses with limited customization of content

Locally developed e-learning content

  • Children
  • Adults for continuous education
  • Professional education and certification
  • Religious

Content developed to educational institutions and government

  • Converting official educational curricula (GCC common curricula)
  • Development of a complementary e-learning curricula for existing educational institution
  • Religious university and degrees

Delivery of content

  • Online universities that may be affiliated internationally or regionally.

Services

  • Common services offered to schools
  • Certification services

CAGR= 32%

Global market (2003) $20 billion

Source: Madar Research (2003)

to sum up many business opportunities present themselves in the saudi ict sector
To sum up, many business opportunities present themselves in the Saudi ICT sector

2

Summary of Opportunities

Business

Investment size*

Business

Investment size*

Hardware and software support & deployment

Medium

Entertainment content development

Medium

IT training & education

Small to Medium

Entertainment service delivery over the web or mobile

Small to medium

System integrators

Small to medium

E-learning content

Medium

E-learning services

Medium

Outsourced government and large local company functions

Small to medium

E-learning service delivery platforms

Medium

Omra and Hajj e-travel services

Medium

Investment Size Legend *

  • Small: Less than $1 million
  • Medium: $1-10 million
  • Large: More than $10 million
national ict scene future
National ICT Scene. (Future……)

Fixed Line Penetration 

Cellular Penetration 

Internet Penetration 

PC penetration 

E-applications 

Prices 

E-Readiness Improving

Broadband Expanding

Universal Service Coming Now

conclusion
Conclusion

It is essential for developing economies that the Governments Plays an important role as a Regulator, Facilitator, and Partner To the Private sector to realize growth In Significant ways

thank you

Thank you

Dr. Ahmed A. Sindi

asindi@citc.gov.sa

Dr. Suliman Mirdad

smirdad@citc.gov.sa