ICT’s pivotal role

in post-COVID-19
“new normal”
ICT as a key economic and societal enabler
This report has been developed solely by Roland Berger and has been commissioned
by Huawei. The report is based on publicly available information, which has not
been independently verified by RB, as well as interviews with several key market
participants such as telecom companies and other corporates in the ICT sector,
certain assumptions, general assessments, projections and experience derived from
RB's consulting activities, in each case as at the time of the report's preparation.
 ICT's pivotal role in post-COVID-19 "new normal" 3

Contents
Executive summary................................................................................................................................. 4
1. Macroeconomic impact and changing behaviors....................................... 6
2. Emerging ICT use cases.............................................................................................................. 9
E-consultation....................................................................................................................................................... 11
E-health monitoring............................................................................................................................................. 11
E-learning.............................................................................................................................................................. 13
Automated mining.............................................................................................................................................. 14
Automated safety and sanitation.................................................................................................................... 15
3. Impact on ICT investment...................................................................................................... 16
4. Role of governments and regulators......................................................................... 19
Cover photo: hh5800/iStock
4 ICT's pivotal role in post-COVID-19 "new normal"

Executive Summary
The COVID-19 pandemic is impacting the way people live,
work and play. Consumers and businesses are rapidly
moving online in the strongest digitization push in history.
Digital share of spend has grown fast since the start of the
pandemic, despite the fact that Gulf Cooperation Council
(GCC) countries are expected to show a temporary GDP
decline of between three to seven percent in 2020. To a
large extent, this transformation in the consumer's mindset
will likely be permanent, as people become accustomed
to buying items online – even groceries, which had hitherto
seen only a sluggish uptake in online sales.
The recent increase in online activity, especially due to business hubs and corporate centers faster than ever,
use of remote collaboration tools, such as Microsoft providing "office-like" connectivity in suburban and res-
Teams and Zoom, and higher adoption of video on de- idential areas. Telcos will obviously play a major role in
mand (VoD) and online gaming, has driven IP network providing this connectivity by accelerating rollout of 5G
traffic far above pre-COVID-19 levels. Network traffic and fiber networks. This accelerated rollout is estimated
now appears to be stabilizing at around 30 percent high- to increase telcos' capital expenditure in the GCC, Jor-
er than in 2019, further pointing to the permanency of dan and Pakistan to around 23 percent of revenue by
change that COVID-19 has triggered. To varying degrees, 2021, up from 18–19 percent in 2019. This will enable re-
remote interactions are expected to become the norm mote interactions for a broad swathe of consumers and
for offices, schools, etc., especially as organizations have enterprises, and hence support economic activity and
realized that they can operate remotely, often at the growth. It will also allow telcos to manage the increase
same or higher levels of productivity and cost efficiency. in network traffic resulting from new use cases in infor-
Given this "new normal", high-speed broadband net- mation and communications technology (ICT) as well as
works in the Middle East will need to expand beyond build sufficient network redundancy.
 ICT's pivotal role in post-COVID-19 "new normal" 5

A COVID-19 has triggered sudden & permanent changes, forcing governments to steer
towards a digital economy in the "new normal"
Post-COVID-19 ecosystem interactions

2
New ICT use cases
Emerging new digital-driven
use cases (e.g. e-healthcare)

1
Consumers
Permanent behavioral change
towards digital channels

Trigger
Support ICT

4
Government
Leadership & enablement
of ICT sector to build
a digital economy

3
Telcos & enterprises
Enterprises to invest
in re‑optimizing operating
models; telcos to ensure
sufficient network
capacity & redundancy,

5 Economy and relevant industry

Post-COVID-19 digital-driven partnerships
economic growth

Source: Roland Berger

6 ICT's pivotal role in post-COVID-19 "new normal"

These new, digital-driven use cases are emerging in The good news is that governments in the region are
various sectors and include remote healthcare, smart already responding to the pandemic with support for
office / campus, digitized public services, home auto- the ICT industry. For example, they have provided addi-
mation, AI surveillance, etc. The sectors impacted most tional spectrum to telcos on a temporary basis, deferred
strongly include healthcare, education, media and loan payments, discounted utility bills and so on. Gov-
retail, all of which are expected to accelerate their IT ernments now need to build a conducive environment
spend growth by 2–3× over the next five years compared for ICT investment to enable a strong economic recovery
to pre-COVID-19 levels. Other major sectors in the Mid- and ensure long-term growth. We highlight some of the
dle East, such as oil and gas, financial services and the actions that governments / telecom regulators can take
public sector, are also expected to significantly increase towards this goal, including providing temporary mone-
their IT spend ­going forward. tary relief to telcos, driving operational efficiencies, and
Most of the use cases triggered / accelerated by supporting the ecosystem for startups and small and
COVID-19 require low latency and high bandwidth in medium-sized enterprises.
order to provide a seamless experience, something that
5G and fiber are best positioned to deliver. Speeding up
the deployment of capital expenditure may be challeng-
ing for telcos, but it also represents an opportunity for
them to diversify their revenue stream in a way that they
were unable to do during the OTT (over-the-top) wave. In
this report we analyze a few of the emerging use cases,
the potential value chains and the revenue opportunity
in these emerging use cases. We also look at the differ-
ent roles that telcos can play – as strategic investor, pay-
ments enabler, analytics provider, customer acquisition
driver or connectivity services provider – and the poten-
tial value that they can capture.
Governments have a key role to play in leading their
countries through the pandemic. → A Policymakers and
regulators need to recognize that the ICT sector is an
economic enabler: ICT investments have a multiplier
effect. For example, we estimate that the rollout of 5G
could add up to six to eight percent to countries' GDP in
combined direct, indirect and induced impacts. In addi-
tion, broadband is increasingly seen as a human right:
Governments are obliged to provide high-speed Inter-
net connectivity in order to bridge the "digital divide".
This will be especially true in a post-COVID-19 digital
­environment.
 ICT's pivotal role in post-COVID-19 "new normal" 7

1 Macroeconomic
impact and
changing behaviors
8 ICT's pivotal role in post-COVID-19 "new normal"
The COVID-19 crisis has triggered a temporary economic
decline across most markets globally, forcing governments
to announce budget cuts and stimulus packages.
Countries in the Middle East have had to cope not only
with the economic impact of COVID-19, but also the
related fall in oil prices: GDP growth estimates for the
GCC suggest a decline of between three to seven percent
in 2020 with a recovery to pre-crisis levels in 2021–22.
Governments in the region have implemented a combi-
nation of fiscal, monetary and employment measures,
→ B including increasing banking liquidity, offering in-
terest-free loans to companies and contributing to pri-
vate-sector employee salaries.
Organizations have had to change their operat-
ing models almost overnight. Lockdowns have kept
consumers home and sent online traffic and the dig-
ital share of spend soaring. On the consumer side,
increased online activity, especially the use of remote
collaboration tools such as Microsoft Teams and Zoom,
and higher adoption of VoD and online gaming, has
driven IP network traffic far above its pre-COVID-19
levels. Network traffic now appears to be stabilizing at
levels around 30 percent higher than in 2019, evidence
that the changes triggered by COVID-19 are likely to
be permanent. Remote interactions are expected to be-
come the norm in offices, schools and the like, even
post-COVID-19, as organizations realize that they can
operate remotely, often at same or higher levels of pro-
ductivity and cost efficiency.
COVID-19 has not only pushed up consumers' data
use, it has also changed the way they spend their money.
While overall spend has fallen across a range of sectors
(fashion was down 30–40 percent in June 2020 com-
pared to January 2020, for example, and home furnish-
ing was down 35–40 percent), the digital share of spend
has increased (up 18 percent for fashion and 24 percent
for home furnishing). → C This marks a clear change in
the behavior of consumers, and one that is likely to be
sustained.
COVID-19 has thus sped up the adoption of digi-
tal by consumers across the Middle East. Overall digi-
tal spend in the region is forecast to grow from its cur-
rent level of USD 21 billion in 2019 to USD 41 billion
by 2024, driven by increased adoption of e-commerce,
online gaming, distance learning, telemedicine, etc. In
2020 alone, the overall market is expected to grow by a
massive 26 percent compared to 2019. Were it not for
COVID-19, this increase would certainly have been far
more m­ oderate.
COVID-19 has also changed the way companies op-
erate. Businesses have found themselves forced to focus
on remote working and to increase their online presence
and e-commerce activities, leading to new ICT service
requirements and pushing digital transformation. In
the short term, most investments by companies in the
region shifted to cloud-based solutions and collabora-
tion tools, such as Microsoft Teams, to cope with the
need for remote working. Over the medium to longer
term, spending is likely to rise on security services and
other bespoke digital projects.
 ICT's pivotal role in post-COVID-19 "new normal" 9

B The COVID-19 crisis has triggered a temporary economic decline, forcing governments to make budget cuts
GDP growth and government budget cuts [%]

Real GDP growth 2020 national budget cuts4)

2020 2021

–6.8
KSA 3.1 –10

–4.3
Qatar 5.0
–30

–3.7
Jordan1 3.7
0

–3.6
Bahrain 3.0 –30

–3.5
UAE 3 3.3
–20

–2.8
Oman 3.0
–15

–1.5
Pakistan2 2.0
–11

–1.1
Kuwait 3.4
–20

→ Economic recovery is expected from Q4 2020, with

economies recovering to pre-crisis levels by 2021/22
→ Expat population in GCC expected to decline by 5–10%
(esp. in Bahrain, Qatar, Kuwait) with impact on overall
consumer spending, including telcos
→ Socio-economic impact assessments are becoming
more important as a basis for CAPEX investments
Source: Government policy papers; IMF; Roland Berger
1) Minister of Finance announced in April that the budget will not be cut but
­re-allocated
2) Budget cut expected to be around 11%, but Senate rejected proposed budget
on June 25
3) Budget cut in the Emirate of Dubai
4) Percentage change in national budget for fiscal year 2020–21
10 ICT's pivotal role in post-COVID-19 "new normal"

C Digital share of wallet to increase strongly, even with overall spend stable or declining
Change in consumer spending due to COVID-19 [% June 2020 vs. January 2020]

Digital spend Trend1 Total spend Trend1

Groceries +68 ↗ +35–40 →

Electronics +35 ↗ +15–20 ↗

Media +13 ↗ +5–10 ↗

Fashion +18 ↗ –30–40 ↘

Home
furnishings +24 ↗ –35–40 ↘

Travel –42 ↘ –70–80 ↘

Drivers
→ Sudden shift in spending from offline to online due
to lockdowns and general avoidance of public spaces
→ Increase in first-time users of digital platforms
→ Continued low footfall at retail outlets over the
next 6–12 months due to consumer aversion to public
places and customers acclimatizing to digital platforms

Source: Roland Berger 1) Next 12 months compared to pre-COVID-19 spend

 ICT's pivotal role in post-COVID-19 "new normal" 11

2 Emerging
ICT use cases
12 ICT's pivotal role in post-COVID-19 "new normal"

As we saw in the previous chapter, COVID-19 has
changed the way consumers and enterprises behave.
But it has also created ICT-based opportunities for en-
terprises. Some of these opportunities, such as e-learn-
ing and telemedicine, existed even before COVID-19 and
the pandemic has simply acted as an accelerator. Oth-
ers, such as automated safety and sanitation, received
little attention before the crisis.
We created a long list of more than 100 such use
cases across a range of sectors and then short-listed
and assessed around 40 use cases, prioritizing them
on the basis of their feasibility   → D (as indicated by
the availability of the required technology, the cost of
technology implementation, and short-term versus
long-term adoption) and their financial impact (reve-
nue opportunities and savings for services providers,
and socioeconomic impact). By drawing up a prioriti-
zation matrix, we selected five use cases most likely to
shape the ICT environment in the near future. These
areas represent interesting opportunities for ICT and
telcos and include e-consultation, e-health monitor-
ing, e-learning, automated mining, and automated
safety and sanitation.  → E Below, we examine each
area in turn.

D Digital themes encapsulating all spaces of work, life and consumption

Digital themes and use cases

Industry 4.0 Retail & hospitality Healthcare

→ Automated mining → E-commerce shopping → Remote consultations
→ Drones and sensors for predictive → Self-checkout services → Remote health monitoring
maintenance → Analytics and loyalty → RPA/AI for health optimization
→ Factory robotics → Sensors for store management → Cloud health records
→ Remote ops & control → ML-powered diagnosis
→ Shipment tracking → Robotics

Farming & agriculture Government & authorities

→ Logistics optimization → Safety and sanitation

ICT
& analytics → Digitization of public services
→ Smart hardware for animal/crop → AI surveillance and authority
control, optimization support

use cases
Financial services Smart home & entertainment
→ B2C: P2P, wearables, pay-per-use → Automation and surveillance
→ B2B: cybersecurity, retail network, → VoD, gaming, streaming
overhaul, cloud/analytics → Cloud storage

Transportation & logistics Multi-utility Smart office & education

→ Shared & smart public transport
→ Smart hardware for drivers &
road infrastructure
→ Autonomous driving
→ E-commerce smart logistics
→ Smart meter and smart grid → E-learning
→ AI & IoT for grid facility mgmt. → Cloud storage & collaboration
→ Sensors & visual recognition tools
for waste & water management

Source: Roland Berger

 ICT's pivotal role in post-COVID-19 "new normal" 13

E Several digital-enabled use cases to emerge / accelerate post-COVID-19

Use cases priorization

Feasibility

E-learning

Mobile gaming
Console gaming Automated mining
Collaboration solutions
VoD
Smart meters Self-checkout E-consultation
Cloud storage E-health monitoring
Live streaming Safety & sanitation
Remote ops (drones) AI surveillance
AR/VR video RPA/AI
Cybersecurity
P2P txns.
Shipment/tracking
Wireless/smart grid
E-commerce logistics
Back office ML diagnosis
productivity
Home automation Online shopping
Factory robotics
Proximity farming Pay-per-use insurance
Inventory optimization

Healthcare Multi-utility Smart home & entertainment Farming & agriculture Retail & hospitality Financial impact
Government Transportation & logistics Smart office & education Financial services Oil & gas

Colored text: 5G / fiber required

Source: Roland Berger

 14 ICT's pivotal role in post-COVID-19 "new normal"

E-consultation 2024. Based on our estimations, telcos could access up

E-consultation involves the provision of a platform for
physicians or hospitals to offer initial doctor consul-
tations to patients. Though E-consultation has been
around for more than a decade, COVID-19 has accelerat-
ed its adoption exponentially, with both physicians and
patients flocking to available online platforms during
lockdowns. There have already been multiple announce-
ments in the region of e-hospitals being set up, such as by
UAE's Ministry of Health and Mulk e-hospital in Sharjah.
Based on our estimations, e-consultation could
represent a USD 1 billion market opportunity by 2024
in the GCC. → F This forecast reflects increasing service
penetration, with e-consultation accounting for more
than 280 million outpatient visits across the region by
to USD 400 million of this total value pool by providing a
range of services such as connectivity via fiber / 5G, IaaS
(­infrastructure as a service), data analytics, customer
acquisition (by leveraging their telco subscriber bas-
es), and payments (by leveraging Direct Carrier Billing
(DCB) or mobile wallets). Telcos also have the opportu-
nity to invest in these businesses to access this growth
potential and further diversify their revenue stream.
E-health monitoring
E-health monitoring refers to the ecosystem for remote
patient monitoring via sensors and smart hardware,
such as glucometers, blood pressure monitors and oth-
er vital monitoring systems. To this is added a software

F E-consultation will represent a potential of USD 1 bn by 2024 – Telcos can address up to USD 400 m of this
Value chain breakdown and size of potential [USD m]
Market size [USD m]
Segments Business model 2022 2024 Telcos' role

Insurance providers Provide insurance coverage (incl. remote consultation) to patients Included in existing plan; no addi-
tional insurance premium required
Hospital/physicians Provide healthcare services; receive payment from patients or insurance 350 550

Payment Integrate with platform to enable seamless payments for a fee 10 20

Data analytics Analyze data to extract insights for hospitals and insurance companies 30 40

Customer acquisition Develop commercial partnerships to push consultation service adoption for a fee 30 50
Service owner

Service provider Provide platform to match demand & supply for remote medical care 150 230

IaaS & data platform Provide computing power & storage for remote consultation providers 5 10

Hardware Offer tablets to hospitals via a range of sales channels 5 10

Connectivity Ensure lease line connectivity & upgrades for broadcasting video 40 60
for remote consultations
Total 620 970
Source: Roland Berger
Service currently provided by telcos Service that could be provided by telcos Not a focus area
 ICT's pivotal role in post-COVID-19 "new normal" 15

and data analytics layer providing insights for hospitals
and physicians. E-health monitoring would reduce the
time a patient would be required to spend in a hospital
by enabling doctors / hospitals to monitor them remote-
ly, such as providing post-hospital care.
COVID-19 has boosted confidence in technology
and remote care, making this an attractive segment with
market potential in the GCC estimated at USD 1.4 bil-
lion by 2024. The value pool addressable by telcos in this
use case could be as high as USD 460 million. → G
Connectivity is mission-critical, especially connec-
tivity in the patient's home. Patients would require mul-
tiple smart hardware devices connected simultaneously,
with constant low latency requirements, beaming their
data to hospitals and sending out alerts in the event of
anomalies. The primary opportunity for telcos would
be to connect households with 5G / fiber networks to
enable this high-speed data transfer. Telcos can also
leverage their data analytics competencies to provide
hospitals and insurance companies with patient / ser-
vice insights. Further, IaaS and data platforms also offer
interesting prospects, as vast troves of patient data will
need storage and computational power in order to pro-
vide useful insights. System integrators will play a key
role, consolidating edge data lakes into reports, on the
basis of which hospitals and physicians can take neces-
sary action. The business model could also require some
increase in insurance premiums given additional pay-
ments for smart devices to be set up at patients' homes.
System integrators / service providers could potentially
intercept around 30 percent of revenue on a subscrip-
tion-based revenue model, with hospitals accounting
for the remaining 70% revenue share.

G E-health monitoring will be worth USD 1.4 bn by 2024 – Telcos can address up to USD 450 m of this
Value chain breakdown and size of potential [USD m]
Market size [USD m]
Segments Business model 2022 2024 Telcos' role

Insurance providers Collect incremental premiums from elderly patients for e-health monitoring (need to buy 640 660
hardware and cover for service subscription)

Hospital/physicians Provide medical care to patients based on e-health monitoring data (additional analysis); 80 150
payment via insurance

Data analytics Analyze vast amounts of data for hospitals to extract insights for a fee and insurance 5 10
companies
Service owner

System integrators Consolidate data points gathered in patients' houses with a readable software layer; 40 60
potential subscription service

IaaS & data platform Provide computing power and storage for e-health monitoring and data storage 60 100

Hardware Provide sensors/smart hardware for remote monitoring (e.g. glucometers) with variable 100 160
pricing on device requirement

Connectivity Ensure fiber connectivity to sensors and smart hardware for remote health monitoring 170 290

Total 1,195 1,430

Source: Roland Berger Service currently provided by telcos Service that could be provided by telcos Not a focus area
 16 ICT's pivotal role in post-COVID-19 "new normal"

E-learning USD  1.2  billion market opportunity by 2024 as pene-

E-learning refers to the virtual education space, includ-
ing both B2B (business-to-business) and B2C (busi-
ness-to-consumer) solutions. On the B2B side, K-12
schools can run operations remotely, broadcasting
lessons and conducting student assessments online.
Already schools across the GCC are considering oper-
ating with a lower capacity in each physical classroom,
with students alternating between home-based learning
and classes in school on a weekly basis, thus requiring
e-learning solutions. On the B2C side, tutoring and pro-
fessional training courses offered via the Internet are
already available, and COVID-19 is expected to further
increase adoption of such online courses. COVID-19
has definitely boosted the adoption of e-learning and
this sector is forecast to represent an approximately
tration within schools rises, switch to online teaching
becomes mainstream and demand for online training
by professionals grows. Here also, telcos could play mul-
tiple roles in the value chain and could potentially ad-
dress up to USD 300 million of this market by 2024. → H
As more educational institutions and professionals
adopt e-learning, demand for low latency, high band-
width connectivity is expected to rise, driving demand
for 5G / fiber services from telcos. In addition, IaaS and
data platforms can provide value by enabling storage
of required content such as learning videos, notes, as-
sessments and so on. Given access to the end-customer,
telcos can also play a significant role in customer acqui-
sition, especially on the B2C side, targeting students'
parents and employed professionals for online tutoring
and professional courses respectively. Lastly, given the

H E-learning will represent a potential of USD 1.2 bn by 2024 – Telcos can address up to USD 300 m of this
Value chain breakdown and size of potential [USD m]
Market size [USD m]
Segments Business model 2022 2024 Telcos' role

Data analytics Data analysis to extract insights and tailor education to learners' needs 5 10

Customer acquisition Develop commercial partnerships to push e-learning adoption for a fee 35 50
Service owner

Learning platform Provide platforms for profession education (B2C), student tutoring (B2C) and schools offering 120 180
e-learning (B2B); variable fees apply

Education content Provide online curriculum, receiving either fixed fee or share of revenue 400 600

IaaS & data platforms Provide computing power and storage for e-learning providers 20 40

Hardware Tablets and/or desktops for individuals using e-learning services 250 320

Connectivity Ensure lease line connectivity & upgrades to schools for broadcasting video for e-learning 10 20

Total 840 1,220

Source: Roland Berger Service currently provided by telcos Service that could be provided by telcos Not a focus area
 ICT's pivotal role in post-COVID-19 "new normal" 17

B2C nature of this opportunity, telcos could consider
investing directly in this sector and expanding their rev-
enue streams, similar to the fintech services currently
offered by a number of telcos in the GCC region.
away from the actual drill site, driving cost efficiencies
while operating with a high level of accuracy and limited
downtime. Automating oil wells involves the automatic
calibration of flow from oil wells, controlled using data
gathered from sensors installed at the wells. In total,

Automated mining
Across GCC countries, the oil and gas (O&G) sector ac-
counts for a significant share of countries' GDP, so auto-
mated mining represents an interesting opportunity for
industry players. While a drive towards automation has
already been visible in the industry in recent years, the
oil price decline in 2020 has created new impetus.
We focus here on the two major drivers of automa-
tion in O&G production: automated drilling rigs and au-
tomated oil wells. In automated drilling, operations are
controlled remotely, sometimes hundreds of kilometers
these use cases are expected to create a market opportu-
nity of USD 1.2 billion across the GCC by 2024 with auto-
mation penetration across oil rigs and oil wells forecast
to rise from around 25 percent today to 80–90 percent by
2024. → I
Telcos can participate in the automated mining
­value chain by providing IaaS / platform and connec-
tivity services. Together, these two areas account for
around one-half of the total market potential. This
potential is particularly attractive given the need to
connect and provide centralized storage and com-
puting to hundreds of sites in remote locations. Tel-

I Automated mining is expected to represent market potential worth USD 1.2 bn by 2024
Value chain breakdown and size of potential [USD m] – automated mining1
Market size [USD m]
Segments Business model 2022 2024 Telcos' role
Service owner

System integration & Integrate components into complete automation solution and provide regular maintenance 150 170
maintenance and upgrades

Data analytics Platform for aggregating data from various sensors and analytics engine to optimize drilling 180 200
process and calibrate oil wells

Hardware2 Hardware, incl. sensors, batteries, robotic arms, remote control units and communication modules 180 200

IaaS & data platforms3 Cloud-based storage of sensor data and computation of automated actions 140 220

Connectivity Low-latency wireless connectivity to link up various sensors and remotely operated 230 360
machinery with control unit

1) Incl. automated drilling rigs and oil wells

Total 880 1,150
2) Incl. additional hardware expenditure compared to traditional mining (e.g. excludes drills, pipes)
3) Assumes transition from on-premise to IaaS servers
Source: Roland Berger Service currently provided by telcos Service that could be provided by telcos Not a focus area
 18 ICT's pivotal role in post-COVID-19 "new normal"

cos could potentially offer bundled IaaS and con- come commonplace in public spaces. Overall, the mar-
nectivity solutions and provide volume discounts ket is still in its early stages, but we estimate the auto-
for packages covering multiple deployment sites. mated safety and sanitation market to be worth around
USD 120 million by 2024 in the GCC region. → J Growth

Automated safety will be driven by the increasing penetration of auton-

and sanitation
With the ongoing COVID-19 pandemic, public sanita-
tion has become more important than ever as a new
front in the war against the virus. Automating public
safety and sanitation not only enables more frequent
and more exhaustive cleaning of public spaces, it also
avoids exposing operatives to potentially contaminated
environments. For example, autonomous floor-scrub-
bing robots now operate at international airports in
Singapore and Paris, and they are soon expected to be-
omous sanitation robots, which should rise to around
30–50 percent across retail malls, office complexes, hos-
pitals, airports and metro subway stations.
Telcos can participate in the value chain by provid-
ing IaaS and connectivity services, together accounting
for about one-quarter of total market potential. Each au-
tonomous robot could be equipped with 5G connectivity
to ensure an uninterrupted low-latency connection as
they move around. As with automated mining, telcos
could potentially bundle IaaS and connectivity solu-
tions, and offer volume discounts for packages covering
multiple sites to capture the market.

J Automated safety and sanitation is expected to represent market potential worth more than USD 120 m by 2024
Value chain breakdown and size of potential [USD m]
Market size1 [USD m]
Segments Business model 2022 2024 Telcos' role
Service owner

System integration Integrate products, either sell outright or provide as subscription service, and provide maintenance 25 50
& maintenance

Data analytics Provide navigation system within autonomous robots & analytics to optimize the cleaning process 5 10

Hardware Supply hardware components (batteries, sensors, cameras, sanitation equipment) and parts assembly 15 30

IaaS & data platforms Provide cloud-based storage of service and video feed/usage logs 2 3

Connectivity Provide connectivity to transmit video feed and live status of service robots 15 30

Total 60 120
1) Estimate based on major deployment venues – hospitals, malls, airports,
­office complexes, metro stations, cabs
Source: Roland Berger Service currently provided by telcos Service that could be provided by telcos Not a focus area
 ICT's pivotal role in post-COVID-19 "new normal" 19

3 Impact on
ICT ­investment
20 ICT's pivotal role in post-COVID-19 "new normal"
Accelerated digital transformations due to COVID-19
and new digital-driven use cases are expected to increase
ICT spend by enterprises and telcos to develop new use
cases and provide the required connectivity.
Enterprise IT spend is expected to increase strong-
ly over the next few years from approximately USD 17
billion at present to USD 20 billion in 2024 across GCC,
Jordan and Pakistan, a CAGR of around four percent.
Spend is expected to increase by one percent in 2020,
given GDP contraction across economies, before accel-
erating from 2021 onwards.
In the GCC, spending will be driven primarily by
Saudi Arabia (with a CAGR in 2019–24 of around five per-
cent), United Arab Emirates (three percent) and Kuwait
(four percent). These three countries account for more
than 75 percent of the overall enterprise IT spend in the
GCC region. Comparing pre-COVID-19 growth forecasts,
it appears that the pace of spending in these three coun-
tries will likely increase significantly. In addition, there
is still further headroom for growth given that countries
in the GCC generally have a lower enterprise IT spend as
a share of GDP: an average of 0.5–1.5% as compared to
global average of approximately 1.7% of GDP, increasing
to more than 2 percent of GDP for top spenders such as
the US and South Korea.
From a sectoral perspective, not all industries will
be affected equally by COVID-19 in terms of the rate of
acceleration towards digital transformation. We divide
sectors into the following three groups:
Post COVID-Boomers: These are sectors impacted the
most by the pandemic and include retail, healthcare,
education, media and communication. A considerable
proportion of the prioritized emerging use cases, such
as e-healthcare, e-learning, etc., reside in these sectors,
which should drive an increase in IT spend. Given the
consumer-facing or B2C element, these sectors are al-
ready moving online rapidly and will likely witness the
highest acceleration in IT spend. We estimate that this
acceleration will result in IT spend of around 1.3 times
their pre-COVID-19 levels.
Fast Digitizers: These are some of the largest sectors
in the GCC region. Some either already have a high IT
spend as a percentage of sector revenue (such as finan-
cial services) or have strong digitization potential going
forward (such as oil & gas and the public sector). These
sectors are expected to increase their IT spend by around
1.15 times compared to pre-COVID-19 levels.
Steady Digital Spenders: These sectors are expected to
experience some acceleration in digitization, especial-
ly given the significant B2B element, and include pro-
fessional services, construction, utilities and transpor-
tation. These sectors are forecast to continue their IT
spend at the same level as during pre-COVID-19 times.
Combining the impact of increased spend across these
three categories of sectors, the overall enterprise IT
spend across GCC, Jordan and Pakistan is estimated to
increase to USD 20 billion in 2024, growing at a CAGR of
around four percent. → K
Separately, capital expenditure by telcos is also forecast
to accelerate with a specific focus on 5G and fiber net-
works. This will allow telcos to manage ongoing increase
in consumer and enterprise traffic and to provide high
bandwidth, low latency connectivity for new digital-driv-
en businesses. Telcos in the GCC have broadly managed
to carry the increased IP traffic post-COVID-19 without
significant "emergency capital expenditure" due to the
capacity redundancy already built in to their 4G net-
works. Now, with 5G networks already being rolled out,
telcos are expected to quicken this expansion to migrate
customers to 5G sooner and balance the increasing
load across both 4G and 5G networks. Further, a fast-
 ICT's pivotal role in post-COVID-19 "new normal" 21

er 5G rollout will also support and enable new digital Underlying this development will be limited further
businesses such as telemedicine, online gaming and investment in 4G for additional capacity in select areas
e-learning. but primarily an increase in the velocity of 5G network
Capital expenditure by telcos across GCC, Jordan deployment to cover most urban areas in the GCC by
and Pakistan currently stands at approximately 18–19 2021. This will be followed by continued 5G in-fill and
percent of revenue, though this varies across each of the small-cell deployments post 2021, as well as expendi-
countries. The figure is estimated to rise to 23 percent ture for SDN (software-defined networking) and NFV
in 2021 before stabilizing at approximately 21 percent in (network function virtualization). This will be the sit-
the years that follow. → L  uation in the GCC markets, while Jordan and Pakistan

K Enterprise IT spend to reach ~20 bn in 2024, with education, healthcare, retail and media
increasing their spend at 2–3 ×
Enterprise IT spending by country [USD bn]

Despite GDP contraction,

IT spend will grow in 2020 +4%
+1%
CAGR CAGR pre-
2019–24 COVID est.
19.8 4% 2%
18.9 4.5
18.1 4.4
17.4 Others1 ~2% ~1%
16.6 16.7 4.2
4.1
4.1 4.1
1.2 Kuwait 4% 1%
1.1
1.1 5.7
1.0 5.4
1.0 1.0 5.2
4.8 4.8
5.0 UAE 3% 2%

8.5
8.0
7.3 7.6
6.8 6.9

KSA 5% 2%

2019 2020 f 2021 f 2022 f 2023 f 2024 f

Source: Roland Berger 1) Incl. Oman, Qatar, Bahrain, Pakistan, Jordan

22 ICT's pivotal role in post-COVID-19 "new normal"

will ­likely focus on expanding 4G and driving 4G adop-
tion over the next few years, with 5G rollout / adoption
expected post 2022.
The situation with regards to FTTH (fiber-to-the-
home) varies greatly from market to market across the
above countries. For instance, the United Arab Emir-
ates has already developed a widespread fiber net-
work across its urban areas, ensuring a high degree
of FTTH penetration. On the other hand, Kuwait has
much lower fiber penetration due to multiple legacy
reasons – no involvement of telcos in fiber rollout and
lack of a clear telecom regulatory structure – but is now
pushing strongly for fiber networks' expansion and has
launched Phase 3 of its FTTH rollout. Meanwhile, Saudi
Arabia is planning to cover almost all of its densely pop-
ulated areas as part of its Vision 2030. As fiber rollout
typically is a more time-consuming process than mo-
bile networks, given the required right of way approv-
als, digging, trenching, etc., fiber expansion is expected
to continue post 2021 as well.

L Telcos to increase their capex up to 23% of revenue to ensure 5G deployment and

continued network redundancy
Telco capex forecast [USD bn, 2019–2024f]

23%
22%
21% 21% 21%
Capex
on revenue 19% 10.3 Capex deployments to be
2.1
10.1 9.8 9.8 accelerated and driven by
9.4 2.2 2.2 5G & fiber, plus some limited
9.1 2.2
2.0
2.0 4G capex
Others1
0.6 → 5G: 5G networks to cover
0.5 0.5 0.5
0.5 2.0 most urban areas in GCC
Kuwait 0.5 1.8 1.7 1.7
1.8
1.6 markets by 2021, with
UAE capex in subsequent years
5.6 5.5
5.2 5.4 5.4 driven by 5G in-fill / small-
5.0
cell deployment, ongoing
capex for SDN/NFV, etc.
KSA → FTTH: GCC governments
are pushing to expand
FTTH penetration across
urban areas
2019 2020 2021 2022 2023 2024

Source: Roland Berger 1) Incl. Oman, Qatar, Bahrain, Pakistan, Jordan

 ICT's pivotal role in post-COVID-19 "new normal" 23

4 Role of
governments
and regulators
24 ICT's pivotal role in post-COVID-19 "new normal"
Governments will have to play a pivotal role in leading their
countries through the COVID-19 pandemic. One of their
goals now must be to enable the digital economy to support
and drive their countries' future growth.
To this end, governments and regulators would do well
to recognize and acknowledge the economic enable-
ment characteristic of the ICT industry as an economic
enabler – which is of fundamental importance in today's
world to ensure connectivity for life, work and play.
Broadband is increasingly viewed as a human right
and governments are obliged to provide high-speed In-
ternet connectivity to bridge the 'digital divide'. Further,
countries that invest more in ICT enjoy better produc-
tivity: Investments by telcos typically have a multiplier
effect on the economy, leading to an increase in GDP. We
estimate that investments in 5G could potentially add
between six and eight percent to countries' GDP, taking
into account direct, indirect and induced effects on the
economy. Another recent similar study commissioned by
Vodafone UK also showed that investments in 5G could
generate more than GBP 150 billion in ­productivity ben-
efits within ten years, representing approximately seven
percent of the United Kingdom's GDP.
Several countries around the globe are already sup-
porting their ICT industry through dedicated initiatives,
putting ICT at the core of their national strategies. South
Korea, for example, has recently developed a "new deal"
focused on 5G and AI (artificial intelligence) in response
to the crisis. Governments in the Middle East are also
responding to the pandemic. UAE, for example, recent-
ly restructured its government, indicating an increased
focus on digital initiatives by appointing a Minister of
Industry and Advanced Technology, Minister of State
for Digital Economy and Artificial Intelligence, Head of
Government Digital Services and Head of Cybersecu-
rity. In addition, governments in the region have also
implemented initiatives to support enterprises during
the pandemic such as providing additional spectrum to
telcos on a temporary basis, deferring loan payments
and discounting utility bills. Governments now need
to build a conducive environment for ICT investment
to enable a strong economic recovery and ensure long-
term growth. Steps governments could take need to be
focused on providing financial relief to free up capital
for investments, driving operational efficiencies and
supporting the ecosystem for startups and SMEs (small
and medium-sized enterprises). → M  
UN Human Rights Council,
2016
→ Affirms the importance of applying
a comprehensive human-rights
based approach in providing and
expanding access to Internet
→ Recognizes the global and open
nature of the Internet as a driving
force in accelerating progress
towards development
 ICT's pivotal role in post-COVID-19 "new normal" 25

M Governments expected to lead their countries through the current crisis;

should use ICT sector as a key economic enabler
Role of stakeholders in navigating the current crisis

National leadership
→ Define national priorities and lead economies out
leads of the pandemic
Government

Economic enablement
→ Enable a digital ecosystem (e.g. by supporting/
driving new ICT use cases, providing connectivity &
redundancy, etc.)
→ Investments generate multiplier effect across
enables the rest of the economy
ICT sector

Service provision
→ Redesign and optimize operating model to
continue business in the new normal

serves Enterprises
Oil & gas, finance, retail, healthcare, education, etc.

Digital consumption
→ Change consumption patterns
towards online channels
→ Demand services remotely,
safely and conveniently
Consumers

Source: Roland Berger

26 ICT's pivotal role in post-COVID-19 "new normal"

Action  → Initiative  → Impact

Release spectrum Provide additional 3G/4G spectrum Reduces the need for capital
to telcos on a permanent or expenditure on 3G/4G, freeing up
temporary basis capital for 5G/fiber networks

Reduce fees Reduce or temporarily waive Enables telcos to invest more

regulatory fees and/or revenue- in 5G/fiber
share requirements

Increase operational Speed up approval of processes Enables faster rollout and expansion
efficiency for new sites and import equipment of fixed and mobile networks
at customs

Support SMEs Develop targeted digitization Guides SMEs to transform digitally,

subsidies/guidance programs and shift online faster and boost
provide access to relevant data productivity

Support innovation/ Create startup incubators and build Generates incentives for fostering
startups an innovation ecosystem innovation and drives the
development of new ICT use cases

Develop and retain talent Provide incentives aimed at Enables enterprises – including
attracting experienced talent startups and SMEs – to hire senior-
level talent from other regions
Credits and copyright

WE WELCOME YOUR QUESTIONS, COMMENTS

AND SUGGESTIONS

AUTHORS CONTACT
KUSHAL SHAH VANESSA MERBOTH
Senior Partner +971 54 998 4086
vanessa.merboth@rolandberger.com
SANTIAGO CASTILLO
www.rolandberger.com
Partner
JAWAD SHAIKH
Senior VP

Our gratitude also goes to the study team:

Arun Pai (Project Manager), Filippo Ghizzoni (Project Manager),
Riccardo Bottini (Senior Consultant), Jarel Tang (Consultant),
Marcello Manelli (Consultant), Zhenzhen Huang (Consultant),
Soraya Basaran (Analyst)

Any assumptions, assessments, views, projections and experience values contained in this report
involve significant elements of subjective judgement and analysis, which may or may not be correct.
While the information contained herein is believed to be accurate, neither RB, nor any of its affiliates,
partners, employees or agents provide a guarantee or warranty, express or implied, or accept any
liability or any form of responsibility in the event that the actual future developments differ from the
statements and projections in this report. No part of this document may be used or relied upon by
any person or organization, and Roland Berger does not take any responsibility and shall not be held
liable for any loss or damage arising out of such use or reliance.

© 2020 ROLAND BERGER GMBH. ALL RIGHTS RESERVED.

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