Rapid gains in smartphone use power digital economic growth in Middle East

Mobile Internet is coming to Gulf Cooperation Council (GCC) nations in a big way.

Computer giant CISCO estimates the Middle East will lead the world in growth of new subscribers and usage – predicting a 72 percent increase from 2014 to 2015.

Consumer and media research company Nielsen says the growth will be strongest in Saudi Arabia. The company reports 67 percent of the population older than 16 use a smartphone; the percentage is even higher among youth, at 73 percent for those younger than 15.

The market is showing increased receptivity to mobile ads and e-commerce.

“Consumers and their smartphone adoption have changed the dynamic all over the world, and Saudi Arabia is no exception," Aditya Gokhale, executive director of telecom at Nielsen, said. The opportunity this presents to service providers is immense as they look to maximize data revenues, get into over-the-top partnerships or even build content. For device makers, staying fresh, relevant and most importantly popular will dictate fortunes."

Venture capital firm Middle East Venture Partners (MEVP) is squarely focused on helping tech startups get off the ground. The firm targets entrepreneur-led companies in the early and growth stages throughout GCC nations and the Levant region. The company maintains offices in Dubai, Beirut and in the Silicon Valley, giving the venture capital firm a multinational reach. The company currently holds $75 million in assets under management and claims the spot as the largest venture capital firm in the region.

Walid Hanna, managing partner, was active in venture capital and in new venture development for 15 years before founding MEVP. Before launching MEVP, he was the CEO of Dubai International Capital's venture arm, the Arab Business Angels Network. Before that, he was on the investment management team of Abraaj Capital.

“In recent years, the digital economy has become a major contributing factor in global economic growth and our region is no exception,” he said.

Hanna noted the rapid adoption of the smartphone is powering this growth. There are now more than 150 million Web users and 80 million smartphone users in the Arab world, in addition to thousands of businesses in need of software and digital products. 

"The high smartphone penetration rates and the growing e-commerce sector have made the Middle East and North Africa region a breeding ground for tech startups,” he said.

Timing to launch a high-tech startup in Dubai or Riyadh is perfect, he said.

“The region has a young, middle-class population that is rapidly growing, disposable income is increasing due to economic growth and societies are more aligned with global culture due to higher levels of connectivity,” he said. “Growing smartphone adoption will definitely result in a proportional growth of accessibility to and adaption of e-commerce and content. Furthermore, it will enable a new set of consumers.”