Saudi Arabia’s information technology (IT) is one of the largest in the Middle East. In fact, the Kingdom’s IT sector has earned the distinction of being the fastest growing sector in the entire region. The reasons are many. The Kingdom has a vibrant economy that has generated confidence among businessmen. Entrepreneurial culture and improved quality of education are all elements that contribute to the Kingdom’s rapid march toward advancement and modernization.
Here are some highlights of the rapidly growing communications and IT sector in Saudi Arabia:
The Kingdom’s IT employment sector has maintained a growth of four percent per annum, creating around 8,000 new jobs per year. Three percent of the Saudi workforce, about 200,000, is involved in IT.
The Kingdom plans to bridge the technological gap existing with the leading industrial nations by 2020.
Some 21,000 schools will be equipped with PCs. This growth will lead to increased home demand.
PCs have increased from 860,000 in 1998 to 1.43 million in 2001 and are now present in 39.4 percent of the households.
With the highest penetration of PCs in the Gulf, use of the Internet has also increased from 100,000 subscribers in 1999 to 625,000 in 2002 with 1.38 users.
The Kingdom has made a major investment in the most modern IT and telecommunications infrastructure as a result of increasing demand from both the citizens and expats.
Fixed telecommunications services increased by 73 percent since 1973 to 3.4 million by 2002. With only 15 percent of the total population connected, a huge market potential exists.
The Kingdom anticipates adding between 600,000 and 700,000 landlines annually, with every household connected by 2005.
Mobile phone subscribers increased from 31,000 in 1997 to over 5 million in 2002.
E-commerce is estimated to be worth $7.29 trillion, seven percent of global transactions, by 2004. The Kingdom aims to have a share of this ever-expanding market. Distance learning is on the increase, with PC/Internet as the main tool.
The newly-formed Etisalat Consortium Company that has acquired the license to set up and operate the Kingdom’s second mobile network, plans to launch full-scale GSM services in major Saudi cities providing one million mobile lines within six months. The cell phone service is expected to provide 4,500 jobs over the next five years, with 80 percent of the positions reserved for Saudis. Moreover, there are indications that the new company could cut charges by up to 15 percent.
With the Kingdom’s encouragement of an entrepreneurial culture, a huge upsurge in office environment, both at home and at work, is expected. The Kingdom’s communications have had a checkered growth.
King Abdul Aziz, the unifier of Saudi Arabia, was well aware that an efficient telecommunications system was essential to his plans for consolidating and developing the Kingdom and it was during his reign (in 1930) that the first telephone exchange was installed in Al-Dira. In 1953, the Ministry of Communications was formed and post and telecommunications were among its responsibilities. Within a year, the Saudi Arabian Radio Telecommunication Scheme RT-1 was installed, providing a multi-channel telephone and telegraph network in the holy cities of Makkah and Madinah, and Riyadh, Taif, Jeddah and Dammam.
In 1977, the Ministry of Post, Telegraphs and Telephones, which had taken over PTT responsibilities from the Ministry of Communications, embarked upon an ambitious plan to establish a modern telecommunications network, comprising telephone, telegraph and telex services, for the entire Kingdom.
In May 1998, Saudi Arabia’s telecommunications services were privatized. The new company, known as the Saudi Telecommunications Company (STC), had a capital of more than SR10 billion during the first phase. STC is set to become one of the Kingdom’s largest employers, providing jobs for more than 70,000 Saudis. There are plans to add 1.7 million new telephone lines across the country in the next three to four years.
In May 2003, the Ministry of Post, Telegraph and Telephones was renamed Ministry of Telecommunications and Information Technology.
The growth of mobile telephones has been phenomenal. It was in January 1996, the Global System for Mobiles (GSM) was launched in the Kingdom, with the aim of installing 500,000 GSM mobile telephones. By late September 1996, more than half were in operation. By the end of the project, 45 Saudi cities and towns and all major highways were covered. In 2001, there were 2,528,640 AMT and GSM mobile telephones in operation.
The growth of the Internet service has been equally unique. In 1999, the Internet service became available in the Kingdom with all the connections routed through a state server (Internet Service Provider), sited at the King Abdul Aziz City for Science and Technology. The Ministry of Post, Telegraph and Telephones, as it was then known, provided the external means to access the Internet, making the service available for research establishments, academics and both public and private companies.
By April 2003, there were 21 operational Internet Service Providers (ISPs), providing Internet access to some 1.6 million users.
In July 2001, Saudi Telecom Company introduced ADSL (Asymmetric Digital Subscriber Line) service for the Kingdom. ADSL significantly reduced the cost of the Internet service. STC is also extending ADSL services to Makkah, Taif, Jeddah and Dammam.
All these developments have been possible because of the Kingdom’s rapid strides in satellite communications. In 1985, with the launch of two communications satellites, Arabsat (the Arab Satellite Communications Organization formed by the Arab League in 1976) became operational. The Arabsat satellites are positioned in geo-stationary orbit above the equator.
Communications satellites facilitate the almost instantaneous transmission of many forms of data, including alphanumeric text, voice, still pictures and moving pictures. Their uses in news dissemination, business, entertainment and education are limited only by the imagination and resources of the user. The Kingdom is playing an active role in the development and exploitation of this exciting medium of communication.
The King Fahd Satellite Communications City in Jeddah is the largest such complex in the Middle East. It comprises four ground stations, two dealing with INTELSAT, one with ARABSAT and the other with ANMASAT for maritime communications to provide services to all ships, planes and vehicles. These stations provide telephone, telex, TV and cable services.
Telex, which still occupies important position in the communication system, has now taken a back seat in many activities. It is still the most important mode for banks to effect transfer of remittances from one bank to another, whether locally, regionally or internationally.
The development of telex services in the Kingdom has kept pace with every innovation in telex technology.
From the early days of electro-mechanical devices, through the installation of electronic machines in 1978, to the introduction in the 1980s of the most sophisticated equipment, capable of handling Arabic and Latin text simultaneously, the then Ministry of PTT ensured that the Kingdom’s ever-growing need for efficient telex communication services was met.
The postal service, one of the oldest and organized systems of communication, has grown by leaps and bounds. The development of the Kingdom’s economy has generated a massive increase in the volume of mail, which the postal services have had to handle. In a continuing process of expansion, the Fourth Development Plan provided for five new central post offices (in Madinah, Abha, Buraidah, Jizan and Sakaka) to complement the three main postal complexes in Riyadh, Jeddah and Dammam.
An efficient postal network now covers all the cities and villages of the Kingdom, with 477 main and 185 branch post offices.