Key trends

The communications and technology sector in the Middle East is undergoing a fundamental transformation. Liberalization and new technologies and business models have inspired a huge boom in development and continue to drive major trends in these areas:

Policy and regulation

Rapid changes in regional telecommunications markets are encouraging policymakers and regulators to realign their plans and practices; optimize market conditions for customers, operators, and investors; and maximize contributions to social and economic development.

Privatization

Governments in the region continue to reduce their level of direct involvement in the sector, spurring competition, promoting private investments, and leading companies toward greater value creation.

Consolidation

The current wave of mergers and acquisitions is likely to continue. Domestic markets are beginning to become saturated, and only a limited number of new facility-based licenses remain to be issued. This consolidation is leading to the emergence of Middle East–controlled regional and global operators.

Competition

In recent years, all countries in the region have liberalized their facility-based (that is, infrastructure-based) telecommunications markets for both mobile and fixed telecommunications. Focus is now shifting from facility-based to service-based competition development, and the uptake of CS/CPS (carrier selection/carrier pre-selection), LLU (local loop unbundling), and MVNO (mobile virtual network operator) business models will probably accelerate.

Broadband

Although the spread of broadband services has been relatively slow in the region, significant demand for high-speed fixed and mobile access services is expected in the near future. This will offer fresh possibilities for growth.

Disruptive technology

New technologies and business models, including low-frequency wireless-based communication, are rapidly being adopted in the Middle East, enabling novel cross-sector competition as well as improving overall accessibility to communications for the people of the region.

Convergence

With the preferred solution becoming fixed networks for data communications and mobile networks for voice communications, convergence is emerging as the way for telecommunications operators to have a share in both sectors. In addition, telecommunications and media partnerships and combined service offerings are beginning to appear.


How we help our clients

Since the mid-1990s, Strategy& has played an active role in helping policymakers, regulators, incumbents, and new entrants shape the communication and technology sector in the Middle East. We bring our clients an unparalleled understanding of the global industry and regional markets, thanks to a diverse team combining highly experienced strategists and industry experts.

Our approach focuses on turning strategy into actions, and ensuring maximum value creation for our clients. We help our clients through all stages of their transformation and growth programs, from strategy development to detailed design to execution management. We have worked in nearly every country in the Middle East, addressing such issues as:

  • Sector strategy and policy
  • Sector governance and regulation
  • Strategic and business planning
  • Financial planning
  • Economic modeling
  • Investment strategies
  • Mergers and acquisitions
  • Postmerger integration
  • Technology strategy
  • Technology planning and rollout
  • Market-facing strategies
  • New product development
  • Operational models

Current challenges in the ComTech sector

In order to capture the opportunities offered by the rapidly evolving Middle East communications and technology markets, policymakers, regulators, incumbents, and new entrants are increasingly pressured to address a number of challenges:

  • What sector development strategies and policies are needed to continue improving market offerings, attracting investments, and sustaining sector growth and contribution to the economy?
  • What regulatory frameworks and practices are needed to ensure effective implementation of sector development strategies and policies and to balance the interests of various stakeholders in the sector?
  • What corporate and business strategies do incumbents need to sustain their growth at a time when competition is intensifying and traditional markets are becoming saturated?
  • What regional and international expansion strategies should be pursued to ensure profitable and sustainable growth in the long term? What business models and market entry strategies are likely to yield optimal returns for new entrants?
  • What technology, partnerships, and business models would enable successful evolution toward convergence?
  • How can players effectively execute the business and operational strategies at hand while upgrading internal capabilities as well as delivering lasting results?
  • What transformations are needed in governance and operating models to enable execution of corporate and business strategies and, in some cases, geographic expansion?
  • What operational changes are needed to enhance efficiency, improve competitiveness, and enable swift adaptability to evolving market conditions?