Deloitte launches the 2014 Middle East Technology, Media and Telecommunications predictions report
19 March, 2014 – Deloitte’s TMT predictions are built around hundreds of discussions with industry executives, analysts and commentators, along with tens of thousands of consumer interviews. The predictions are also tested with clients, industry analysts and leverage Deloitte’s international and regional TMT project experience in the months leading up to their release.
The launch of the Deloitte Middle East TMT Predictions 2014 report was announced in 3 events held concurrently in Dubai, Manama and Doha during March. The forums provided an opportunity to discuss and debate the latest trends shaping the TMT industries with decision makers across the region.
“Whilst the Global Deloitte TMT Predictions report is currently in its 13th edition, for the second year in a row, Deloitte published a version of the predictions with specific relevance to the Middle East region,” said Santino Saguto, Partner and TMT Leader at Deloitte Middle East. “This time we have taken a more in depth view on the region’s most important themes, such as education, healthcare, small-mid size business, sports and how the most cutting edge innovations such as wearables could help business leaders and government authorities drive the Middle East’s evolution and growth,” Saguto explained.
“Deloitte’s Middle East TMT 2014 Predictions report offers valuable insights into the key trends that will shape the technology, media and telecommunications sectors over the near and long term, and we are committed to supporting research and study into the future of our sector,” said Mohammad Abdullah, Managing Director of TECOM Media Cluster. “Dubai’s media industry is thriving, which is testament to the Emirate’s wider economic growth, and I am optimistic that 2014 will be another positive year for the media industry.”
“In light of the latest trends seen in the Middle East TMT space, we have also sought to highlight and reflect on key challenges which could impact the pace of the region’s wider adoption of new technologies and their development across TMT sectors,” added Saguto.
Highlights and details of Deloitte’s Middle East TMT 2014 Predictions include:
Smart glasses, fitness bands and watches should sell about 10 million units in 2014, generating $3 billion in revenues across the world. The Middle East, has seen a remarkable shift towards the adoption of new technologies. This trend is expected to continue as smart glasses become commercially available in the region. However, smart glasses’ relatively high price point may only be accessible to a wealthy niche. Corresponding smart glass affordability and uptake by the wider Middle East consumer base should therefore be more gradual over the longer term.
Student registrations in Massive Open Online Courses (MOOCs) will be up 100 percent compared to 2012 to over 10 million courses, but the low completion rates mean that less than 0.2 percent of all tertiary education-equivalent courses completed in 2014 will be MOOCs. The growing awareness of online education will force educational institutions to increase investment in this area, drive more acceptance of online education as it becomes accredited, and increase adoption by corporate training groups. Over the next few years, the Middle East could see the rise of the Arabian MOOC (AMOOC). New local platforms, in partnership with local professors and universities, may emerge to launch new localized AMOOCs, attended by more Arab users than in 2013.
There will be 100 million eVisits globally, potentially saving over $5 billion when compared to the cost of in-person doctor visits and representing growth of 400 percent from 2012 levels. The total addressable market for eVisits in the GCC is about $2-3 billion and could increase by as much as $230-310 million this year. Although eVisit usage will likely be greatest in North America, where there could be up to 75 million eVisits in 2014; in the Middle East, usage will be more gradual as implementation of national eHealth programs in countries such as Saudi Arabia is planned over a ten-year period. In the meantime, fast developing mobile health (mHealth) will emerge as a more disruptive force in the region’s healthcare systems.
Small-to-medium sized enterprises (SMEs) in the Middle East will increase their expenditure on information and communication technology (ICT) services by over $2 billion to $22 billion in 2014, 10 percent over 2013. In 2014 SME share of ICT spending in the region will be just over 23 percent, driven by ongoing expansion in the number of SMEs and their needs for key ICT services, such as web-presence, e-commerce and cloud computing.
The digital economy of the Middle East is expanding, offering SMEs in the region a better platform for development. A number of economic and SME sector indicators suggest that SMEs across the region represent significant growth opportunities in general and in their ICT needs, especially if provided with the right support. As SMEs acquire and build up their web presence, e-commerce and cloud computing capabilities, they will stimulate the region’s economic growth going forward.
By the end of 2014, up to 50 million homes around the world will have two or more separate pay‑television subscriptions, with the additional subscriptions generating about $5 billion in revenues globally. Over the coming years, the number of households with multiple subscriptions should continue rising, as more content owners make their content portfolios available via subscription video-on-demand (SVOD) delivered ‘over-the-top’ using broadband connections. The pay-TV market in the Middle East is quite small but growth reflects a developing appetite for pay-TV in the region. The fact that viewers in the region, with sizeable online streaming and YouTube penetration levels, have adopted online video in addition to conventional television shows a market potential for SVOD as a secondary viewing service.
The value of premium region-specific sports rights in the Middle East will increase by at least 15-20 percent, exceeding the 14 percent rise of all premium sports rights predicted globally. Premium sports rights from region-specific sports will outgrow those from American and European leagues in percentage terms. Although American and European leagues will maintain most of their overall share of the Middle East’s premium sports rights in terms of value, they will no longer drive overall growth as they traditionally did in the past. With very limited room for Middle East broadcasters to profitably exploit the broadcast rights of top international leagues, we are approaching an important turning point in the region’s sports rights market. Region-specific sports properties are now growing faster, but compared to their European and American league counterparts are still significantly undervalued. Now with higher growth prospects, local leagues will bridge part of this gap.
Instant messaging services on mobile phones (MIM) will carry more than twice the volume of messages sent globally via a short messaging service (SMS). Despite the burgeoning volumes of messages carried over MIM platforms, globally SMS will generate more than $100 billion in 2014, equivalent to approximately 50 times the total revenues from all MIM services. In the Middle East, the adverse impact of MIM on operators’ SMS and MMS revenues will be in the range of 5 to 6 percent in the next five years as higher smartphone penetration makes MIM more ubiquitous in the Middle East than anywhere else in the world. Coupled with increased multimedia sharing in the region, MIM is a stronger driver for data consumption and can expand new revenue streams for Middle East operators.
Full details about the Middle East TMT Predictions report are available here: www.deloitte.com/metmtpredictions2014
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About Deloitte & Touche (M.E.)
Deloitte & Touche (M.E.) is a member firm of Deloitte Touche Tohmatsu Limited (DTTL) and is the first Arab professional services firm established in the Middle East region with uninterrupted presence since 1926.
Deloitte is among the region’s leading professional services firms, providing audit, tax, consulting, and financial advisory services through 26 offices in 15 countries with more than 3,000 partners, directors and staff. It is a Tier 1 Tax advisor in the GCC region since 2010 (according to the International Tax Review World Tax Rankings). It has received numerous awards in the last few years which include Best Employer in the Middle East, best consulting firm, and the Middle East Training & Development Excellence Award by the Institute of Chartered Accountants in England and Wales (ICAEW).