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Information Technology – SNP ADVISORS

Information Technology

Radiotelephony:

The Kingdom of Saudi Arabia telecommunications connectivity includes nearly 4 million fixed line connections and 52.7 million mobile/cellular sets in use. The telecommunications network is modern and combines microwave radio relays, coaxial cables, and fiber-optic lines. Mobile and cellular subscriptions continues to increase rapidly. The Kingdom is connected to Asia, Europe, the Middle East, and the United States via submarine cable networks SEA-ME-WE 3 and 4 and FLAG. For satellite communications the country has five Intelsat, one Arabsat, and one Immarsat in operation.

Broadcast and Media:

The Saudi media sector appears set for strong growth due to continued population growth and economic development. The media market in the kingdom is diverse, with 12 daily newspapers and over 130 specialist publications on offer at newsstands. There are nine government controlled TV stations and six broadcasting stations. Although restrictions still remain, media outlets have been debating more social issues in recent years, including women’s rights and the treatment of children and servants. The sector remains hampered by a lack of proper figures for radio and TV viewers and print circulation, though publishers are becoming better at targeting different segments of the population. There are nine government controlled TV stations and six broadcasting stations. These entities are managed and overseen by the Saudi Ministry of Culture and Information, the Saudi Broadcasting Corporation and the Saudi Commission for Audiovisual Media. The Saudi General Commission for Audiovisual Media is a newly established entity has a monitoring role over the visual content displayed through websites like YouTube in compliance with local customs and social values. The Commission plans to set new conditions that impose greater control over contents of “YouTube.”

The local TV channels remain state-owned and are not widely popular, but Saudis have become avid viewers of, and investors in, pan-Arab satellite channels. Internet penetration in the kingdom is at around 60 percent, though this is likely to rise in the future and represents a strong potential market for media outlets. Private TV stations cannot operate from Saudi soil, but the country is a major market for pan-Arab satellite and pay-TV. Saudi investors support major networks such as the Middle East Broadcasting Center MBC.

The MBC Group, based in Dubai, is the first private free-to-air satellite broadcasting company in the Arab World, based in Dubai. Bahrain-based Orbit Showtime and Rotana Group in Dubai are yet other networks. Rotana Group, also known simply as Rotana, is the Arab World’s largest entertainment company.
There were 17.4 million internet users by 2014 (Internetlivestats.com). The NTP has a five year goal to increase the percentage of internet users from 64 to 85 percent in the next five years and provide broadband services across the country. The authorities openly acknowledge that widespread filtering takes place. It targets “pornographic,” Islam-related, human rights and political sites. Changes to the press law in 2011 brought all forms of electronic publishing under its scope.
Major suppliers of broadcasting and related subsystems are Harris from the United States and Thomson from France, and King Abdul Aziz City for Science and Technology (KACST), and the major satellite operators are Arab Satellite Communications Organization (intra-Arab entity), Nile Sat (Egypt) Suhail (Qatar) and Thuraya (UAE).

Note on Social Media:

Saudi Arabia is one of the largest social media markets in the Middle East. The popularity of social media has been boosted by the high rate of smartphone ownership. With 2.4 million users, Saudi Arabia is home to more than 40 percent of all active Twitter users in the Arab region, says the Dubai School of Government (2014). Among the top Twitter users are clerics and members of the royal family. The country also accounts for 10 per cent of all Facebook users in the Arab region and has the highest per-capita YouTube use of any country in the world.

Broadcasting Services of the Kingdom of Saudi Arabia is a state-owned broadcaster that operates four TV networks, including news channel Al-Ikhbariya. Channel 1 is an Arabic language station and Channel 2 is in English. The English channel provides full-length films, short features and programs from European and American television sources. Saudi TV Channel 2 is a 24-hour news and entertainment channel that broadcasts reports and stories from all over the world. Channel 3 is a sports channel, Channel 4 is a satellite news channel. Saudi Radio Station broadcasts a range of programs in Arabic, English and French.

Sub-Sector Best Prospects

Saudi Arabia is expected to need a significant amount of technology, software and hardware to create the new digital infrastructure that the government is seeking to develop.
Best Prospects include:

  • DSL access switches, enabling multi-service transmission equipment;
  • Fiber-optic satellite links;
  • Wideband transceivers;
  • Network protocol software and systems;
  • Broadband wireless access systems “ Wi Max with 2.5 and 3.5 GHz “ with two type 16D and 16 E; and
  • Education and training in satellite technology systems, repair/maintenance of telecom handsets, hardware/software development.

Opportunities

KACST, a government owned science and research entity, is gearing up to invest heavily to expand Saudi Arabia’s growing satellite industry and has already launched several satellite manufacturing ventures and space research projects. It has reportedly earmarked $2.14 billion for new investments in science, technology and innovation in the Kingdom.  Saudi Arabia has successfully launched more than 12 satellites, all of which were built domestically by local scientists.  According to KACST the region’s satellite revenues reached over $1.3 million in 2014-15.

KACST has been involved in the manufacturing of satellites for the past ten years. Six satellites were successfully launched from the Baikonur base in Kazakhstan on a Russian-Ukrainian missile in 2007, bringing the total number of Saudi satellites in orbit to 12.  The country’s first two communication satellites were launched in 2000.  The NTP highlights the following initiatives Saudi Arabia intends to carry out in this sector over the next five years:

  • Provide broadband services to all regions;
  • Increase percentage of internet users in KSA from 64 to 85 percent; and
  • Double the IT industry’s contribution to non-oil GDP.

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