Kuwait Information Technology Report Q3 20007

Market Overview

With the government's expansionary budget for FY06/07 having boosted both consumer spending and infrastructure investment, the signs are positive for Kuwait's IT sector in H207. BMI has upwardly revised its IT growth forecast for 2007, and high oil revenues are continuing to drive investment by both private and public sectors. In absolute terms, Kuwait is the third largest computer market in the region, and the total size of the IT market is expected by BMI to increase from US$406mn in 2006 to around US$875mn in 2011.There are a number of large private and public sector projects in the pipeline, with an increase in activity over the same period last year.

Given IT market compound annual growth rate (CAGR) forecast at 17% for 2006-2011, Kuwait is set to be one of the fastest-growing countries in the region. This is due partly to its relatively small but techliterate and wealthy population, which allows it to adapt faster to trends. However, the country is embarking on a major new programme of modernising its oil sector, and the booming property and newly liberalised telecommunications sectors are also providing plenty of opportunities for vendors of IT products and services. Given government investment in the growth and development of IT and communications, most of the elements should be in place for Kuwait to outperform many of its regional neighbours as one of the fastest growing IT markets in the Middle East region over the next few years. All sectors of the Kuwait IT market have growth potential over the forecast period. Plans are in place to deploy fibre networks in 36 areas, a third mobile licence is to be awarded, while the ever-increasing popularity of notebooks, particularly wireless-enabled, is leading spending by consumers and enterprises in Kuwait's booming commercial centres. Oil and Gas companies are looking to optimise cost structures, while in the financial sector banks are implementing solutions to increase business flexibility and introduce new services, including Islamic Banking. The government is also getting in on the act, with a wave of new e-government initiatives launched, and an increasing number of state institutions offering online services.