Digital connectivity in the time of COVID-19 is no longer about traditional communication and the search for information; it has become a lifeline for using data, consuming content and engaging in digital applications by individuals, governments and businesses to ensure continuity of economic and social activities in light of social distancing and the complete lockdown in most countries of the world.

In the MENA region, the demand for broadband services and data has increased significantly during the pandemic. 

 Countries that are not ready for the surge of demand have seen network congestion, decline in average Internet speed and deterioration of service quality even in relatively mature markets.

Unequal access to quality broadband connectivity may jeopardize stability and increase social inequality between those who can use digital connectivity to secure business continuity and observe social distancing and those disadvantaged groups, including the refugees, without adequate access to the Internet to hook up to the new normal.

Network congestion during COVID-19 was a serious concern for many countries.

There are five main reasons why networks were not able to cope with the pent-up demand:

1. Intensive use of the network during daytime in residential areas (networks were not designed for peak-time service). This led to congestion of "last mile" networks that provide access to the user
2. Increasing demand for video and other high-bandwidth entertainment services
3. Increasing demand for videoconferencing and cloud services
4. Distance learning by students of all ages
5. Lack of sufficient capacity for consumers through international gateways (i.e., access points where Internet enters the country).

Actions taken by MENA Governments to improve broadband network and services

Governments in the MENA region have been fast to act to respond to the need for improved broadband networks and enhanced internet services.

Several examples actions include flexibility of payment to prepaid users allowing them to pay after consumption (Egypt, Tunisia and Palestine).

Some countries increased the bandwidth of Internet packages and speeds for users without additional cost (Lebanon, Iraq and Bahrain), others covered the additional cost of upgrading monthly packages for subscribers (Egypt). Moreover, some countries have unblocked Voice over Internet Protocol (VoIP) applications (UAE and Oman), others provided more spectrum to telecom companies (Jordan and Saudi Arabia), and secured free cloud applications for companies (Vodafone in Egypt).

In the Kingdom of Saudi Arabia (KSA), the government has managed to secure continued access to various e-government services thanks to its continuous investment in modern digital infrastructure and digital government platforms over the past two decades.

Improving e-learning platforms and online education: E-learning platforms have been developed in many countries of the region, like in KSA, where the national education portal "Ain" has become the main channel of education for more than 6 million users.

This digital education platform has provided 30,000 devices for students in need, in addition to providing more than 100,000 interactive digital learning hours for undergraduate students. The Egyptian, Saudi and Palestinian governments have also provided free Internet services to university professors and free SIM cards for students to access learning platforms through their devices. In Tunisia, Morocco and Bahrain, operators have provided free access to online education platforms. In Jordan, new platforms have been developed in the wake of the pandemic to host teaching materials such as "Darsak," "Idrak," "Jo Academy" and "Abwab".

In countries where network conditions were not able to handle the surge of e-learning applications, governments have used Television to broadcast lessons to students to ensure that the kids' education is not impacted.

Main digital connectivity challenges faced by the region

Despite these government solutions and initiatives, there are several bottlenecks that the sector witnessed during the pandemic and several risks that need to be addressed. These include

• Inability of several telecom operators to continue their business for operations, requiring physical presence of their employees at work sites as they needed to respond to lock down requirements.
• Disruption of global trade, especially with countries exporting telecom equipment, affecting the availability of devices and equipment for broadband networks and services,
• Increasing incidents of theft and vandalism of communications equipment
• Increasing cyberattacks, fake news and incidents of digital fraud that exploit the public panic and uncertainty surrounding the COVID-19.
• Privacy and personal data protection concerns for the use of CDR and mobility data for contact tracing and tracking to flatten the curve and prevent the spread of the virus.

Priorities for MENA to leverage digital solutions for recovery

With the transition to recovery and countries re-opening slowly and cautiously, and as economic activity picks up again, MENA countries should work to increase the capacity of broadband connections, manage network congestion, ensure continuity of vital public services and enhance digital financial technologies.  This is important as demand for electronic services such as health care and mobile payment systems, food delivery services and e-commerce are likely to rise significantly.

This is why the World Bank continues to emphasize the importance of digital inclusion both in terms of universal access to affordable high-quality broadband internet, and in terms of financial inclusion as part of the Marrakech commitments ahead of 2021.

Governments of MENA countries should reinforce their efforts to achieve the following objectives based on the COVID-19 early lessons:

• Objective 1: Increasing capacities and reducing network congestion to prevent disconnection and ensure sustainability
• Objective 2: Ensuring continuity of public services to enable citizens to make use of digital technology to complete their transactions
• Objective 3: Developing electronic financial services such as digital payments and cash transfers from governments to individuals to support companies and the poorest and most vulnerable groups, while emphasizing the importance of providing beneficiaries with proof of identity (IDs) to ensure their access to services
• Objective 4: Promoting e-learning initiatives to ensure education continuity.

As the Governments continue to work on creating an enabling environment to increase network capacity, improve service quality, and develop innovative services following global best practices, a number of priority actions in the short, medium and longer terms are important to emphasize. These include:

• Eliminating obstacles to private sector investment and facilitating entry of new operators into the telecommunications market by encouraging competition, reducing licensing fees and sharing revenue
• Regulating corporate tariffs
• Promoting regional cooperation to establish new submarine cable systems
• Facilitating access to basic infrastructure
• Adopting open-access policies to connect all operators to communication infrastructure on a non-discriminatory basis
• Sharing infrastructure by operators, including in the transport, energy and telecommunications sectors
• Allowing use of globally common services such as VoIP

In conclusion, it is important that governments look at digital development more broadly than the ICT sector. 

Digital technologies bring about fundamental transformations in our economies and countries and affect all sectors of the economy such as agriculture, education, health, government and financial services. 

 Reaping the benefits of digital transformation requires an ecosystem approach focusing on digital infrastructure, digital platforms, digital skills, and applications in vital use cases across the economy, while ensuring protection of personal data and aiming for a truly inclusive digital economy for all.

source: worldbank

Middle Eastern fund managers plan to increase investments in Saudi Arabia in the current quarter, according to a Reuters poll, betting on the kingdom's ability to bounce back from the coronavirus and low oil price shocks.

The region, which has imposed strict lockdown measures as it deals with the outbreak, is home to many oil producers, who have seen the price of their main resource tumble as they spend to help support their economies.

Half of the eight fund managers polled by Reuters said they would increase their allocations in Saudi Arabia, the Gulf's largest economy.

While Saudi Arabia's main stock index <.TASI> is down 11% this year, it is up 3.25% this quarter. In a separate Reuters poll this month, the oil producer's GDP was seen shrinking 5.2% this year, before rebounding next year.

"We are looking for opportunities ... across sectors less impacted by both the oil price slump and the pandemic," said Jai Lawrence, asset management analyst at Almal Capital.

While some large companies in Saudi Arabia have taken a hit, the country is "a more diversified market with stock-specific opportunities available, which could be drivers of portfolio returns," said Emirates NBD's Dipanjan Ray, citing the potential merger of the kingdom's banks NCB and Samba.

Overall, fund managers said they were keeping their allocations in the UAE unchanged, because while the pandemic has hurt sectors such as real estate and tourism, the diversified nature of its economy could boost recovery.

"At this stage we believe the Dubai market has already discounted a lot of the negative consequences of the current crisis and there is medium to long-term upside," said Mohamed Jamal of Waha Capital.

Three of the managers polled increased allocations for Kuwait, drawing on its inclusion in the MSCI emerging markets index in November.

They said the timeline of the recovery was uncertain but Emirates NBD's Ray said he expected economic activity to normalise across all sectors over the next 12 months.

He said his firm had invested defensively going into the pandemic crisis, but "we have rotated into high-quality recovery-oriented names."

source: money.usnews

$277M was invested in 108 startup investment deals in MENA, an increase of 2% in total funding from Q1 2019 to Q1 2020

Despite the COVID-19 crisis, MENA's startups saw an increase in funding in Q1 2020, according to a special Q1 2020 MENA Venture Investment Report launched by MAGNiTT.

This 67-page report includes Insights into 28 industries, with a deep-dive into top industries by deals and total funding including rankings and trends of 17 countries, with a deep-dive into top countries by deals and total funding.

The report also highlights funding trends of MENA-based startups, including the top 10 deals, pre-money valuation by stage with average pre-money valuation at Seed & Series A.

Moreover, while the funding in Q1 2020 has slightly increased compared to Q1 2019, it can be seen that the majority of the top 5 funding rounds were announced before the crisis forced many countries into lockdown.

While investors highlighted to MAGNiTT that they are still actively looking to invest, the true ramifications of the crisis are not expected to be seen until several months after the start of the crisis.

The fundraising exercise often takes several months for founders and investors, delaying the impact of the current situation.

March saw a significant slowdown in number of deals, which is expected to continue over the next few months as the ramifications of COVID-19 come into play.

"Historical data highlights that investment rounds across MENA tend to take, on average, 6 months to come to fruition,” explains Philip Bahoshy, MAGNiTT’s founder & CEO.

“We will most likely not see the full impact of COVID-19 on the venture funding space yet for a few months. However, early indications have already shown a slowdown in funding announcements, as startups and investors re-evaluate their positions in this new environment.”

source: sme10x

If there is one pastime that people in the Middle East are unlikely to give up, it is watching television. In 2018, the daily time spent watching TV per capita in the region was 6 hours and 20 minutes according to Statista, more than double the global time of 2 hours and 48 minutes.

But this is set to decline to 6 hours this year as users in the region switch from watching their shows on traditional television sets to streaming them online.

Between 2013 and 2019, the number of people watching television offline dropped from 98 per cent to 86 per cent in the Middle East and North Africa (Mena) according to the Media Use in the Middle East report.

This drop has been driven by cheaper and faster internet connectivity and the rise of video on demand (VOD) and streaming services, also known as over-the-top (OTT) players.

As a result, the space has become more competitive, but the penetration of these services in the region pales in comparison to other parts of the world.

Starzplay, a UAE-based subscription VOD service partly owned by Lionsgate, launched in 2014 in response to rising demand for good quality content. Now, the company has the biggest market share in the subscriptions market with 29 per cent compared to US-based Netflix which has the second largest share in Mena with Wit24 per cent, according to the IHS Markit in its Pay TV & Online Video Report Mena 2019.

Netflix arrived in the Middle East in 2016, giving the industry a boost and bringing with it a sense of credibility and awareness of subscription-based streaming services.

Telecommunication and pay TV operators like OSN have launched their own OTT services as a way to maintain market share, while the parallel launch of Apple TV+ and Disney+ into the streaming television space last November in the US poses the threat of even more competition once they are launched in Mena.

“It is not a ‘one player wins it all’ business, different providers complement each other. OTT subscription prices allow customers to have more than one service.

It is a great time to watch content,” says Danny Bates, co-founder and chief commercial officer at Starzplay. 

The online subscription video market is pursuing the same growth pattern that the pay TV market had followed in the region.

By 2023, online video subscriptions will reach almost five million, while revenues will reach $416 million according to the IHS Markit report.

Much of the demand for streaming services is coming from the UAE and Saudi Arabia which together account for 49 per cent of the total subscriptions in Mena. The demand for online streaming subscriptions is likely to overtake pay TV subscriptions like OSN and beIN by 2025.

However, streaming services need to have premium content from the biggest studios in the world in order to stand a chance to compete and bring customers on board, and content remains an expensive product.

Additionally, the significance of telling relevant stories catering to Mena audiences is becoming key, hence the surge in investment in original content production.

Earlier this year, Shahid, MBC Group’s streaming platform relaunched, announcing a partnership with Disney and Fox to bring more than 3,000 hours of content to the biggest streaming library of Arabic content.

“Over the next two years, we aim to substantially increase the size of our investment into drama productions, thus increasing them fourfold, of which the majority will be original and exclusive content,” says Marc Antoine d’Halluin, group chief executive at MBC Group.

Netflix has also increased its original content offerings for Arab audiences while Starzplay recently announced a partnership with Academy Award-winning media and entertainment company, Image Nation Abu Dhabi, to create its first original content series.

Jawwy TV, an OTT platform launched in 2018 for the Mena region through Intigral, a digital provider of sports and entertainment, is seeking to make an impact in the way content is consumed in the region.

“Our roadmap is very intense, and we are trying to develop a product in order to match all the major OTT players in the world, but it will be dedicated for Mena content,” said Tony Saab, vice-president of products and content at Intigral.

The service continues to explore agreements with numerous players, in addition to creating original content and acquiring Arabic content.

As more users begin to consume content online, competition will no doubt intensify. One casualty of this growing competition was Malaysia-based iFlix, which pulled out of the Mena region two years after its launch in 2017, unable to replicate the success of its core market in South East Asia.   

“Streaming services have just scratched the surface of the market in Mena, despite all the [high] numbers,” says Bates who believes that the market is still establishing itself, and businesses will have to continue to evolve and strengthen their product to meet the rising demand.

According to Bates, “iFlix never really came into the region, they had success in Asia, but they came to Mena with the exact model, while it is a different territory, people, culture and ways of doing business”.

For him, it was not about lack of market demand that caused iFlix to exit, it was unfit execution, something that every OTT player should bear in mind.

source: wamda