How Dubai Became a Regional Internet Powerhouse

Dubai internet speed has been a topic of concern for both residents and businesses. Despite progress in recent years, slow internet speed remains an issue in some areas.

• In this article, we explore the current state of internet speed in Dubai, the factors that affect it, and what can be done to improve it.
• From the impact on education to the challenges faced by remote workers, the importance of fast and reliable internet speed cannot be overstated in today’s digital age.

How can a city evolve to compete head-to-head with some of the world’s leading economic hubs for investment, business, and talent? The answer is surprisingly simple – it starts with a robust digital infrastructure, and the rest tends to follow.

Take Dubai, for instance. Dubai has always been an economic force, but in recent years the emirate state has transformed itself into a digital powerhouse on par with the likes of Frankfurt, Amsterdam, London, New York, Singapore and Tokyo. This transformation hasn’t happened by chance, but through investment in the region’s digital ecosystem. Recent figures show that delays in internet traffic in Dubai have fallen from 200 milliseconds in 2012, to less than 3 milliseconds in 2022, giving its citizens and businesses internet access in line with the highest international standards. The once great hub has now become a world-leading hub, attracting organizations and talent from all around the world to set up on its shores.

If it wasn’t already clear, the correlation between high-speed digital infrastructure and economic powerhouse is by no means a coincidence. That’s because today, the digital economy underpins the economy at large. A city, region or nation’s economic credentials are only as good as its digital ecosystem will allow.

A recently published study, “The birth of an international Internet hub: a playbook for developing a digital society”, charts Dubai’s meteoric rise to becoming a digital and economic powerhouse, providing a useful blueprint for other cities and regions to do the same.

Beating Heart of the Modern Economy

The power of digital ecosystems to transform economies is laid bare in the case of Dubai. The city’s evolution illustrates how good access to digital infrastructure is more than a mere convenience for citizens, but an enabler of business and productivity. The beating heart of this digital ecosystem is the Internet Exchange (IX), a crucial piece of technology that allows internet service providers (ISPs), content delivery networks (CDNs), and other network providers to exchange internet traffic with one another.

An IX allows for improved interconnectivity between both local and international network operators to help ensure that local Internet traffic remains local rather than being routed abroad, which inevitably adds latency. An IX therefore dramatically improves the user experience for all businesses and customers connected via local ISPs.

The key word in the above paragraph is latency – the time it takes for data to travel from a user device to its destination for processing, and back again. The applications on which our digital future will be based will require extremely low latency. Smart Internet of Things (IoT) and other critical applications, such as autonomous vehicles, smart factories, and even remote surgery, will require latencies in the low-millisecond range. This means that connectivity between the data centers where data is stored and processed needs to have the shortest path possible to the user’s device. These shortened pathways are created by directly interconnecting networks locally at an IX.

In the case of Dubai, the UAE-IX began operations in 2012, with 10 separate networks originating from six different countries connecting to the exchange platform. This has grown by a staggering 800%, leading to more than 90 network operators originating from almost 30 countries being connected and exchanging internet traffic in 2022.

To offer more perspective, consider that the amount of internet traffic being exchanged over the UAE-IX platform has also grown significantly from just 20 gigabits per second (Gbps) in 2012, to more than 390Gbps in 2022 – that’s an increase of roughly 1,900%.

Connectivity as a Bedrock for Transformation

In 2012, when the UAE-IX was first established, 90% of local data traffic needed to be transported outside of the Gulf Cooperation Council (GCC) region to be exchanged, resulting in huge delays, poor internet performance, and regular outages. Today, 90% of locally bound data in Dubai remains local. The result is a massive drop in latency, and much-improved resilience. This means that Dubai’s internet is about a hundred times faster today than it was a decade ago. That is the power of digital ecosystems interconnected through a robust IX.

What does that mean for transformation? Well, as a result of local connectivity and vastly shorter data pathways, the international IP transit price in the UAE has fallen by 98%. The cost of broadband has also tumbled by around 85%, while the number of data centers has more than tripled, and the number of locally registered networks has grown by a factor of eight. Dubai internet speed and the UAE now rank first in the GCC in terms of fixed-line and mobile broadband subscriptions, and the Dubai’s internet speed and penetration are now enjoyed almost 100%. But it’s about more than just the speed, cost, and ubiquity of the internet – it’s also about the flow-on effects of these improvements and the country’s overall digitalization strategy.

Importance of an Urban Digitalization Strategy

A rising tide lifts all boats. That’s what a successful digitalization strategy can do for a city, region or country. The gains from successful digitalization and high-speed connectivity aren’t limited to a handful of businesses or individual citizens, the benefits are all-encompassing, passively driving change and prosperity like nothing else.

Let’s look at how this worked in Dubai.

In 2012 the UAE Telecommunications and Digital Government Regulatory Authority (TDRA) had begun following a strategy to move away from a classic regulatory structure towards a more modern, agile, and forward-thinking regulatory framework. However, long before 2012, Sheikh Mohammed decreed Dubai to be smartest of all the smart cities. The world leading digital hub that Dubai is today is thanks to the business-friendly environment the state’s leadership fostered and this helped Dubai excel in everything it did. Digitalization is a part of that process.

The TDRA was an early adopter of the belief that public and private sector dialogue and outreach were crucial to positioning the UAE as a recognized Information and Communications Technology (ICT) leader in the Middle East. This strategy, which included laying the regulatory foundations for the establishment and successful operation of an IX, has paid off in so many ways.

Economic benefits include the fact that, in the last decade, the number of international organizations to set up their global headquarters in the UAE has grown by over 700%, the presence of banks in the UAE has risen by 45%, and the number of companies registered in the Dubai International Financial Centre (DIFC) has risen 344%. In just 10 short years, the UAE’s non-oil-based GDP has grown by 35%, the number of international universities has doubled, and the number of students in higher education has increased from 140,000 to one million. The knowledge economy has arrived, hand-in-hand with Dubai’s status as an international internet hub. A coincidence? Doubtful.

Magnetism of Interconnection

According to a study by the Leibniz Centre for European Economic Research (ZEW), cities with a highly developed digital economy are more competitive and grow faster than their more analog peers. Furthermore, not only does the region in question benefit from a good Dubai internet speed broadband infrastructure, less well-connected regions. Therefore, as each region individually fortifies its own connectivity and digital infrastructure, the flow-on effects will be felt more broadly, enabling the spaces in between to gain access to better connectivity. In this way, the establishment of regional IX infrastructure can support national and regional digitalization strategies and reduce the digital divide, bringing more and more of the population online with high-performance connectivity, giving people and businesses the opportunity to participate in digital economies across city, state, and national borders.

Ivo Ivanov, CEO of DE-CIX

Ivo Ivanov has been Chief Executive Officer at DE-CIX and Chair of the Board of the DE-CIX Group AG since 2022. Prior to this, Ivanov was Chief Operating Officer of DE-CIX and Chief Executive Officer of DE-CIX International, responsible for the global business activities of the leading Internet Exchange operator in the world. He has more than 20 years of experience in the regulatory, legal and commercial Internet environment. Ranked as one of the top 100 most influential professionals of the Telecom industry (Capacity Magazine’s Power 100 listing, 2021/2022), Ivo is regularly invited to share his vision and thought leadership in various industry-leading conferences around the globe.

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