Get All Access for $5/mo

How Stronger Connectivity Can Deliver On Saudi Arabia's Digital Ambitions With artificial intelligence playing an increasingly important role in business, the onus is now on the telecom sector to deliver the next level of connectivity that will power the economic future.

By Thomas Kuruvilla

Opinions expressed by Entrepreneur contributors are their own.

You're reading Entrepreneur Middle East, an international franchise of Entrepreneur Media.

Shutterstock

On a busy day in the world of shipping, a crane operator was at work, shifting 35 containers per hour instead of the usual 24, and slashing errors by half in the process. The feat was impressive, made even more so by one astonishing fact: he was not working on a dock under the searing GCC sun, he was operating the 180-ton machinery from the comfort of an airconditioned office downtown, facilitated by artificial intelligence (AI).

The more he worked, the more the AI learned. As the day progressed, errors continued to decline, throughput steadily rose, and the realization dawned that before too long, AI may be handling the entire job unaided. For some the rise of AI is exciting, for others a little unnerving– but that's not the issue here.

The story of the port operator is not a tale of robots stealing jobs; it's about infrastructure. For the operator to shift 30% more containers from the comfort of a city-center office chair, the biggest incremental investment was not in the AI program, but the development of a high fiber optic link to enable remote operations, and a full 5G-enabled network at the port itself.

Herein lies both the problem and the solution. The potential benefits of digitization are immense, but unlocking them first requires copious infrastructure investment that, in many cases, is sorely lacking.

For years, the world has leaned on telcos for costly infrastructure, but many are struggling to recoup the outlay from 4G and 5G investments, and are burdened with competing demands and financial strain. Now, even contemplating the development of ubiquitous high-speed fiber connectivity to advance digital ambitions is too much to ask of weary telco companies. From their perspective, they have done the heavy lifting in terms of investing in the digital future, yet they have reaped the fewest rewards, and have felt as coolies in this entire digital revolution.

Related: Inside The MENA High Tech Boom

But their sacrifices have not been in vain. Today, a whole swathe of corporates owes their existence to the wonders of digital infrastructure. Consider the gargantuan profits of Alphabet and Meta, as well as the incredibly lucrative ecosystem of content creators they have nurtured. Or the multiple new businesses that have sprung up, from over-the-top (OTT) enterprises, to game creators, to internet of things (IoT) device makers. Even the basic attempts of telcos themselves to offer differentiated quality and prioritization of services–including to critical service providers such as law enforcement and healthcare–are subject to stringent net neutrality provisions.

To be fair to the industry, what it has achieved–and the way it has transformed–is incredible. Since the first commercial telephone services launched back in the 1800s, telecommunications have changed beyond all recognition–so much so, the sector almost demands a new name. Today, a smartphone's call making capabilities are an afterthought; what matters are pixels, applications, and internet interfaces. Up to this point, the telecom sector has proven adept at keeping up, providing connectivity to a population of internet browsers, work-from-homers, and social media influencers. But in the age of AI, it risks running aground, leaving businesses stranded.

Until recently, telecommunications giants were expected to power Google Maps and facilitate FaceTime calls; now, they must be capable of running an industry, and that requires a telecom network of industrial proportions–not to mention a whole new pool of talent. In Arthur D. Little's CEO Insights, 59% of study participants globally indicated a strong need to reskill their workforces, and business leaders across sectors in the Middle East expressed a strong desire to embrace AI. According to the study findings, just 13% have implemented a robust AI strategy enterprise-wide so far, but 54% say they intend to do so, making the call to action for telecoms companies across MENA ring loud and clear.

Today's businesses do not just require ergonomic offices hooked up to fiber Wi-Fi. Whether a company operates in healthcare, education, or transportation, success hinges upon powerful and seamless connectivity indoors, outside, and up in the air. For many countries in the Middle East and beyond, such hyperconnectivity will be a long time in the making, but in Saudi Arabia, with the right investment and sound decision making, it is firmly within reach. By implementing an enterprise-wide AI strategy supported with hyperconnectivity, producing 30% to 40% additional output from the same asset/investment is an achievable target across sectors.

Related: The Changing Face Of Business In The Middle East

A CONNECTED KINGDOM

Few countries can compete with Saudi Arabia when it comes to ambition. Even fewer can match the speed and scale of the transformation now underway across the Kingdom, and with just six years left on the Vision 2030 clock, AI can play a pivotal role in helping the country and its companies to achieve their goals–not just on time, but with significantly less resources.

The proliferation of artificial intelligence comes at the right time for Saudi Arabia. A handful of other countries might be more advanced where connectivity is concerned, but maturity is not always an advantage. Countries with long-established telecom infrastructure are typically less agile and less able to embrace the efficiency that is possible with AI–they may not even be considering it. By contrast, Saudi Arabia is actively working to build a telecom infrastructure that is fit for the future.

By channeling investment into connectivity, AI capabilities, and data centers, Saudi Arabia's telecom giants can power businesses across sectors while also vastly reducing requirements and costs for vital national infrastructure. But being commercial entities, it is only fair that these national investments are either commercially viable, or that telcos are helped to address the dilemma of being asked to make investments in the national interest, while being held to commercial standards. Given the scale of its ambitions, and its increasingly precarious position in industry digitization and fiber uptake, it is imperative for KSA to resolve this current statis, and move forward expeditiously.

Governments routinely invest in physical infrastructure, but doing so comes with the risk of public inefficiencies and lack of speed. Over the past few decades, however, there has been progress in harnessing the best of the public and private sectors to make investments that are commercially unviable but in the public interest, with Singapore a case in point.

In 2008, Singapore's Infocomm Media Development Authority (IDMA) ushered in a far-reaching restructuring of the telecom sector. In cooperation with the major telcos, the Nationwide Broadband Network (NBN) was created to install and operate a common passive infrastructure. The infrastructure allowed multiple network companies—aka NetCos—to install and operate fiber networks, and required them to offer open access to multiple service companies.

Given that passive accounts for nearly 70% of investment in fiber networks, a common shared infrastructure has made the investment viable in Singapore, and the existence of multiple NetCos has avoided monopoly status. Over the years, the model has resulted in fiber uptake in excess of 98% with speeds reaching up to 1 Gbps in every home. Today, Singapore is ranked as one of the leading digital economies worldwide and a leader in 5G deployment.

And while the Singapore experience requires further examination to assess its relevance and feasibility in the Saudi context, it is imperative that the Kingdom consider a break from the current status quo, as it strives to fulfil its digital ambitions, and realize the goals of Vision 2030.

Related: How GCC Countries Can Build A Talent Model For The Digital Age

Thomas Kuruvilla

Managing Partner, Arthur D. Little Middle East

Thomas Kuruvilla is the Managing Partner of Arthur D. Little Middle East.
Business News

Here's What the CPI Report Means for Your Wallet, According to JPMorgan and EY Experts

Most experts agree that there will be another rate cut next week.

Business Ideas

63 Small Business Ideas to Start in 2024

We put together a list of the best, most profitable small business ideas for entrepreneurs to pursue in 2024.

Starting a Business

Nearly 50% of America's Workforce Has a Secondary Source of Income or Side Hustle. Here Are 7 Steps You Should Take to Create Lasting Value for Yours.

Today's entrepreneurs have the opportunity to generate long-lasting supplementary income if they take these steps.

Growing a Business

5 Effective Strategies to Boost Your Business's Online Presence

Boosting your online presence in 2025 is the key to success for businesses looking to grow. Working on your branding and reputation management is important to drive more sales and improve conversion.

Franchise

Subway's CEO Steps Down Amid a Major Transition for the Sandwich Giant

John Chidsey will step down at the end of 2024, marking the close of a transformative five-year tenure.