- Deloitte: SMEs expenditure on Information and Communication Technology (ICT) services to increase by over $2 billion in the Middle East in 2014
- Deloitte: Expected 15-20% hike in sports rights in the Middle East in 2014
- Deloitte: 10 million Arabian “Massive Open Online Courses” in 2014
Deloitte launched its second annual Middle East Technology, Media and Telecommunications (TMT) Predictions report at Dubai Media City, revealing the latest trends and emerging issues shaping the TMT industries across the Middle East in the year ahead and beyond.
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:
- Wearables: the eyes have it
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.
- Massive Open Online Courses (MOOCs): not disruptive yet, but the future looks bright
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.
- eVisits: the 21st century doctor’s house call
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.
- SME adoption of ICT services: catching up but still a long road ahead
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.
- Doubling up on pay-TV
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.
- Broadcast sports rights: premium plus
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.
- SMS messaging services versus instant messaging: value versus volume
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
UK seeks G7 consensus on digital competition after Facebook blackout
LONDON (Reuters) – Britain is seeking to build a consensus among G7 nations on how to stop large technology companies exploiting their dominance, warning that there can be no repeat of Facebook’s one-week media blackout in Australia.
Facebook’s row with the Australian government over payment for local news, although now resolved, has increased international focus on the power wielded by tech corporations.
“We will hold these companies to account and bridge the gap between what they say they do and what happens in practice,” Britain’s digital minister Oliver Dowden said on Friday.
“We will prevent these firms from exploiting their dominance to the detriment of people and the businesses that rely on them.”
Dowden said recent events had strengthened his view that digital markets did not currently function properly.
He spoke after a meeting with Facebook’s Vice-President for Global Affairs, Nick Clegg, a former British deputy prime minister.
“I put these concerns to Facebook and set out our interest in levelling the playing field to enable proper commercial relationships to be formed. We must avoid such nuclear options being taken again,” Dowden said in a statement.
Facebook said in a statement that the call had been constructive, and that it had already struck commercial deals with most major publishers in Britain.
“Nick strongly agreed with the Secretary of Stateâ€™s (Dowden’s) assertion that the governmentâ€™s general preference is for companies to enter freely into proper commercial relationships with each other,” a Facebook spokesman said.
Britain will host a meeting of G7 leaders in June.
It is seeking to build consensus there for coordinated action toward “promoting competitive, innovative digital markets while protecting the free speech and journalism that underpin our democracy and precious liberties,” Dowden said.
The G7 comprises the United States, Japan, Britain, Germany, France, Italy and Canada, but Australia has also been invited.
Britain is working on a new competition regime aimed at giving consumers more control over their data, and introducing legislation that could regulate social media platforms to prevent the spread of illegal or extremist content and bullying.
(Reporting by William James; Editing by Gareth Jones and John Stonestreet)
Britain to offer fast-track visas to bolster fintechs after Brexit
By Huw Jones
LONDON (Reuters) – Britain said on Friday it would offer a fast-track visa scheme for jobs at high-growth companies after a government-backed review warned that financial technology firms will struggle with Brexit and tougher competition for global talent.
Finance minister Rishi Sunak said that now Britain has left the European Union, it wants to make sure its immigration system helps businesses attract the best hires.
“This new fast-track scale-up stream will make it easier for fintech firms to recruit innovators and job creators, who will help them grow,” Sunak said in a statement.
Over 40% of fintech staff in Britain come from overseas, and the new visa scheme, open to migrants with job offers at high-growth firms that are scaling up, will start in March 2022.
Brexit cut fintechs’ access to the EU single market and made it far harder to employ staff from the bloc, leaving Britain less attractive for the industry.
The review published on Friday and headed by Ron Kalifa, former CEO of payments fintech Worldpay, set out a “strategy and delivery model” that also includes a new 1 billion pound ($1.39 billion) start-up fund.
“It’s about underpinning financial services and our place in the world, and bringing innovation into mainstream banking,” Kalifa told Reuters.
Britain has a 10% share of the global fintech market, generating 11 billion pounds ($15.6 billion) in revenue.
The review said Brexit, heavy investment in fintech by Australia, Canada and Singapore, and the need to be nimbler as COVID-19 accelerates digitalisation of finance, all mean the sector’s future in Britain is not assured.
It also recommends more flexible listing rules for fintechs to catch up with New York.
“We recognise the need to make the UK attractive a more attractive location for IPOs,” said Britain’s financial services minister John Glen, adding that a separate review on listings rules would be published shortly.
“Those findings, along with Ron’s report today, should provide an excellent evidence base for further reform.”
Britain pioneered “sandboxes” to allow fintechs to test products on real consumers under supervision, and the review says regulators should move to the next stage and set up “scale-boxes” to help fintechs navigate red tape to grow.
“It’s a question of knowing who to call when there’s a problem,” said Kay Swinburne, vice chair of financial services at consultants KPMG and a contributor to the review.
A UK fintech wanting to serve EU clients would have to open a hub in the bloc, an expensive undertaking for a start-up.
“Leaving the EU and access to the single market going away is a big deal, so the UK has to do something significant to make fintechs stay here,” Swinburne said.
The review seeks to join the dots on fintech policy across government departments and regulators, and marshal private sector efforts under a new Centre for Finance, Innovation and Technology (CFIT).
“There is no framework but bits of individual policies, and nowhere does it come together,” said Rachel Kent, a lawyer at Hogan Lovells and contributor to the review.
($1 = 0.7064 pounds)
(Reporting by Huw Jones; editing by Jane Merriman and John Stonestreet)
G20 to show united front on support for global economic recovery, cash for IMF
By Michael Nienaber and Andrea Shalal
BERLIN/WASHINGTON/ROME (Reuters) – The world’s financial leaders are expected on Friday to agree to continue supportive measures for the global economy and look to boost the International Monetary Fund’s resources so it can help poorer countries fight off the effects of the pandemic.
Finance ministers and central bank governors of the world’s top 20 economies, called the G20, held a video-conference on Friday. The global response to the economic havoc wreaked by the coronavirus was at top of the agenda.
In the first comments by a participating policymaker, the European Union’s economics commissioner Paolo Gentiloni said the meeting had been “good”, with consensus on the need for a common effort on global COVID vaccinations.
“Avoid premature withdrawal of supportive fiscal policy” and “progress towards agreement on digital and minimal taxation” he said in a Tweet, signalling other areas of apparent accord.
A news conference by Italy, which holds the annual G20 presidency, is scheduled for 17.15 (1615 GMT)
The meeting comes as the United States is readying $1.9 trillion in fiscal stimulus and the European Union has already put together more than 3 trillion euros ($3.63 trillion) to keep its economies going despite COVID-19 lockdowns.
But despite the large sums, problems with the global rollout of vaccines and the emergence of new variants of the coronavirus mean the future of the recovery remains uncertain.
German Finance Minister Olaf Scholz warned earlier on Friday that recovery was taking longer than expected and it was too early to roll back support.
“Contrary to what had been hoped for, we cannot speak of a full recovery yet. For us in the G20 talks, the central task remains to lead our countries through the severe crisis,” Scholz told reporters ahead of the virtual meeting.
“We must not scale back the support programmes too early and too quickly. That’s what I’m also going to campaign for among my G20 colleagues today,” he said.
Hopes for constructive discussions at the meeting are high among G20 countries because it is the first since Joe Biden, who vowed to rebuild cooperation in international bodies, became U.S. president.
While the IMF sees the U.S. economy returning to pre-crisis levels at the end of this year, it may take Europe until the middle of 2022 to reach that point.
The recovery is fragile elsewhere too – factory activity in China grew at the slowest pace in five months in January, hit by a wave of domestic coronavirus infections, and in Japan fourth quarter growth slowed from the previous quarter with new lockdowns clouding the outlook.
“The initially hoped-for V-shaped recovery is now increasingly looking rather more like a long U-shaped recovery. That is why the stabilization measures in almost all G20 states have to be maintained in order to continue supporting the economy,” a G20 official said.
But while the richest economies can afford to stimulate an economic recovery by borrowing more on the market, poorer ones would benefit from being able to tap credit lines from the IMF — the global lender of last resort.
To give itself more firepower, the Fund proposed last year to increase its war chest by $500 billion in the IMF’s own currency called the Special Drawing Rights (SDR), but the idea was blocked by then U.S. President Donald Trump.
Scholz said the change of administration in Washington on Jan. 20 improved the prospects for more IMF resources. He pointed to a letter sent by U.S. Treasury Secretary Janet Yellen to G20 colleagues on Thursday, which he described as a positive sign also for efforts to reform global tax rules.
Civil society groups, religious leaders and some Democratic lawmakers in the U.S. Congress have called for a much larger allocation of IMF resources, of $3 trillion, but sources familiar with the matter said they viewed such a large move as unlikely for now.
The G20 may also agree to extend a suspension of debt servicing for poorest countries by another six months.
($1 = 0.8254 euros)
(Reporting by Michael Nienaber in Berlin, Jan Strupczewski in Brussels and Gavin Jones in Rome; Andrea Shalal and David Lawder in Washington; Editing by Daniel Wallis, Susan Fenton and Crispian Balmer)
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