Bahrain ICT Market - Growth, Trends, COVID-19 Impact, and Forecasts (2023-2028)

Bahrain's ICT Market is expected to grow at a CAGR of 6.7% over the next five years. Increasing emphasis on digital technology, cyber security, artificial intelligence, robotics, healthcare, and IT drives the market's growth.

Key Highlights

• The ICT sector includes both the IT and Telecom markets. IT investments are growing, and the ICT market demand is expected to grow significantly over the next five years. The increasing need to explore and adopt digital technologies and initiatives, the increase in the overall digitalization demand and scalable IT infrastructure, the wide 5G network adoption, and the rising penetration of technology investments are significantly boosting the ICT market's growth. Although information and communication technology (ICT) is everywhere, it plays a significant role in the Country's economic development.
• The government took initiatives to develop the ICT industry, which will drive new growth opportunities for the ICT market. For instance, Bahrain's Education Minister signed an education agreement between the Ministry and Microsoft on the sidelines of his participation in the Global Education and Skills (GESS) Forum held in Dubai, UAE. The agreement aims to develop students' and teachers' skills using information communication technology.
• According to ITU ICT Development Index (IDI), Bahrain ranked first in the Arab region for several consecutive years. It continues to be a regional ICT leader offering the most competitive and affordable ICT services, with 30-40% operational savings compared to nearby countries. Additionally, being the first Country in the GCC to deregulate its Telecommunication sector, adopt a CloudFirst Policy nationwide, and a plan to reach net zero carbon emissions by 2060. Such government initiatives will bring new growth opportunities for the Bahrain ICT market.
• According to the IMF (International Monetary Fund), Bahrain's GDP is expected to grow by USD 53.14 billion by 2027. The county's GDP is growing significantly with increasing IT investments that would create new growth opportunities for the Bahrain ICT market.
• According to ITU (International Telecommunication Union), internet penetration in Bahrain is expected to grow steadily from 2022 to 2026. As per the research, the Country's internet penetration increased from 98.6% in 2022. Also, Bahrain's internet penetration is expected to grow by 99.5% by 2026. The growing internet penetration will drive new growth opportunities for the Bahrain ICT market.
• The COVID-19 pandemic significantly impacted the Country's information technology and telecommunication industry and other facets of daily life. A large portion of the Country's population was forced to spend constant time at home due to the pandemic, which increased remote jobs, telemedicine, online education, and streaming in-home entertainment. The high demand for mobile and residential broadband access boosted the telecommunication sector.

Key Market Trends

Growing demand for Cloud Technology

• Bahrain's ICT industry is driven by the significant increase in private and state investment, rising consumer spending, and increasing demand for cloud services. For Instance, the Information & eGovernment Authority (iGA) of the Kingdom of Bahrain demonstrated its cloud migration experience at Amazon Web Services (AWS).
• For Instance, Bahrain's ministry of transportation and telecommunications announced plans to establish the region's first data center park in collaboration with STC Bahrain. The increasing infrastructure development will increase demand for cloud computing technology adoption, creating new growth opportunities for the Bahrain ICT market.
• Key players in the ICT market upgrade their existing technology with cloud computing solutions primarily drives the market growth. For Instance, the AWS Middle East (UAE) Region, which joins the AWS Middle East (Bahrain) Region, consists of three availability zones and offers clients more excellent options and flexibility in using advanced technologies from the world's top cloud provider. The collaborations will accelerate digital transformation and serve as a benchmark for other regional public sector organizations.
• Furthermore, the increasing investments by the government in promoting numerous technology development, such as 5G, AI, IoT, machine learning, Big Data, etc. Additionally, the digital transformation emergence is expected to drive the Bahrain ICT market growth. For Instance, the Information and eGovernment Authority (iGA) signed a memorandum of understanding (MoU) with Microsoft and ICT training provider Thinksmart to upskill government employees to meet the challenges posed by the global digital economy.
• Globalization in this region and the growing need for adopting advanced technologies such as Cloud, IoT, and artificial intelligence are boosting the market's growth. According to the IMF, Bahrain's GDP will be USD 53.14 billion by 2027. It indicates that the GDP is growing, and the development of the Bahrain ICT market is expected to grow over the next five years.

The IT and Telecom Sector is Expected to Drive the Market

• The increasing IT and Telecom infrastructure investments are driving the ICT market growth. For Instance, Batelco and Ericsson have signed a Memorandum of Understanding (MoU) to collaborate on next-generation 5G technologies and innovations such as voice-over new radio, advanced charging systems, cloud-native 5G core, and NB-IoT for smart city development. Such initiatives will bring new growth opportunities for the Bahrain ICT market.
• Cyberattacks are expected to continue to grow over the next five years. Advancements in IT operations will prevent the ICT market from cyberattacks. For Instance, Stc Bahrain is the first telecom provider in Bahrain to provide SMEs with seamless cloud-based cybersecurity protection. Such initiatives will bring new growth opportunities for the Bahrain ICT market.
• The transition to 3G, 4G, and 5G is still rising in the country due to expanding new networks and increasing demand for high-speed connectivity services. For Instance, Bahrain’s Telecommunications Regulatory Authority (TRA) made part of the C-band spectrum available for 5G private networks in line with the goals outlined in its Workplan for the 2022-2023 period.
• The telecom industry growth is mainly due to the increasing population with the rising broadband services adoption in the country. According to the Ookla Speedtest Global Index, Bahrain ranked 84th with a median fixed broadband download speed of 48.32 Mbps in November last year. Fixed broadband services penetration is growing significantly and thus increasing the demand for the telecom services sector.

Competitive Landscape

Bahrain's ICT market is moderately competitive and moving toward the fragmented stage as the market currently consists of various significant players. Several key players in the ICT market are in constant efforts to bring advancements. Some of the current growth in the market are:

April 2022 - Batelco and Ericsson sign MoU (Memorandum of Understanding) for next-generation 5G technologies and innovations in Bahrain.

July 2022 - The Information and eGovernment Authority, and Microsoft, a leading technology company, organized a workshop on the latest innovations with the participation of Chiefs of Information Officers and managers representing various government agencies in the Kingdom of Bahrain. The workshop follows the recent renewal of a strategic collaboration between the Kingdom of Bahrain's government, represented by the Information and eGovernment Authority, and Microsoft to support national initiatives and accelerate the pace of digital transformation in the Kingdom of Bahrain.

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• The market estimate (ME) sheet in Excel format
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