Scale is not fate: How the UAE and Qatar created the world's healthiest telecom sectors
A healthy telecoms sector is vital for a thriving digital economy and technological development. Conventional wisdom has long dictated that infrastructure businesses such as telecoms are largely about scale. The argument is simple: a large population generates more revenue and spreads the substantial cost of network roll-outs across a bigger subscriber base, making telecoms operations more…
A healthy telecommunications sector is essential for a thriving digital economy and technological advancement. Despite conventional wisdom suggesting that large-scale infrastructure businesses like telecoms are financially sustainable, New Kearney research reveals otherwise. In their evaluation of 34 major global markets, the UAE and Qatar have emerged as the world's two healthiest telecom markets, outperforming larger and historically technologically advanced countries such as the US and South Korea.
The study found no correlation between market size and sector health, nor a clear link between GDP per capita and sector health. For example, Malaysia, with a GDP per capita ranking 32nd among the markets studied, is ranked sixth in the index due to its well-structured market, coordinated technology roll-out, and active national policy framework.
The UAE and Qatar excel in technology deployment, ranking among the top five in the index. Their median mobile download speeds of 663.5 Mbps and 548.4 Mbps, respectively, surpass even the highest-ranked country outside the Gulf, Germany, which recorded 274.4 Mbps. Both countries also have an equally decisive lead in fixed broadband infrastructure, boasting almost universal coverage and occupying the top two positions globally for customer satisfaction.
The research suggests that market structure, regulation, and policy coherence play crucial roles in the success of telecom markets. Markets with two or three operators consistently outperform more fragmented markets on key financial and technology deployment metrics. In markets with four or five operators, capital may be inefficiently divided, leading to decreased returns on invested capital and diverted funds needed for network quality improvements.
Regulatory certainty, early 5G deployment, and proactive policies have also contributed significantly to the success of the UAE and Qatar's telecom markets. Both countries recognized the importance of telecoms infrastructure early, allowing them to pioneer commercial 5G deployments. The UAE began regulatory preparations for 5G as early as 2015, enabling regional operators to lead global roll-outs.
Qatar opened over 4,860km of government-owned telecom ducts to operators, reducing deployment costs. In the UAE, operators retain network infrastructure ownership, encouraging physical tower site sharing without selling assets.
Written by urgent.news from The National Business's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.