Technology

Arabic content trails internet's technology advances

There is not enough Arabic content on the internet to take full advantage of newly built broadband networks in the region, says the chief strategist of Etisalat.

David George Cosh

February 09, 2010

There is not enough Arabic content on the internet to take full advantage of newly built broadband networks in the region, says Ali al Ahmed, the chief strategist of Etisalat, the UAE's largest telecommunications company. More people in the Middle East are heading online to read their news, watch videos and engage socially, but only 1 per cent of all content online is in Arabic, creating a void that many media companies are attempting to fill, an Arab Media Outlook report says.

Mr al Ahmed said the UAE was about to complete a Dh5 billion (US$1.36bn) fibre-optic country-wide network this year. Egypt and Lebanon have recently announced significant investments in their own internet infrastructure. "The technology is becoming more developed than the content itself," Mr al Ahmed said on the sidelines of this year's Arab Media Outlook panel discussion. Meanwhile, telecoms companies around the world are increasingly developing their own content or partnering with media producers to offset shrinking revenues from increased competition and voice-over-internet protocol applications such as Skype.

"When we talk about content development, telecommunication companies should not be marginalised," Mr al Ahmed said. "To get to the subscribers we must also contribute to the production stage. If we do not work together on this level, I don't think content will reach people." Ali Jaber, the dean of the Mohammed Bin Rashid School for Communication at the American University in Dubai, said advances in the quality of internet networks in the region had made collaboration between industries developing media content online a necessity.

"When we talk about content, we need ways of communication to convey the idea so that writers in Khartoum can communicate with producers in Lebanon or Dubai," Mr Jaber said. Broadband usage in the region is expected to grow at an annual rate of 25 per cent until 2013, figures from the Arab Media Outlook show. About 6 million internet users in the Middle East - or about 12 per cent of the total online population in the region - have access to broadband networks. Although recent research reports have determined that the Middle East's internet connectivity is among the poorest in the world, methods to improve broadband quality are beginning to materialise.

Both Etisalat and its rival telecoms company du have begun to step into the field of content generation, producing iPhone applications and value-added services such as a music portal that may not yield significant revenue but is aimed at retaining subscribers. Etisalat in October launched Weyak, a multimedia service that lets subscribers buy music and dedicated multi-player video game connections. "Online services constitute less than 2 per cent of revenues for us," Mr al Ahmed said. "But we cannot create them solely by ourselves. Right now we take it out from the shelf and customise it. That needs to change."

Meanwhile, du will help launch an Arab online platform for content providers in the first half of this year. In December, du partnered with Eurosport to develop an Arabic-language sport news website. Other regional operators such as Zain and Saudi Telecom offer subscribers a paid mobile music download service. @Email:dgeorgecosh@thenational.ae

Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.

Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.

“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.

Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.

“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.

Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.

From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.

Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.

BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.

Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.

Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.

“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.

Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.

“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.

“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”

The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”

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