Market Trends of Iraq ICT Industry
Increased Demand for Digitalization and Scalable IT Infrastructure
- With the rapid adoption of digital strategies, Iraq is witnessing a massive amount of data generation by businesses and individuals. Owing to such trends, the country is investing in data center facilities to manage these data volumes.
- The government is focused on strengthening the country's digital infrastructure. In February 2024, the government curriculum in Iraq embraced digital transformation, encouraging US tech firms to bolster their presence in the nation. This push not only seeks to have these companies share their international expertise but also emphasizes the need for enhanced collaboration with local Iraqi institutions. Such partnerships position these firms to reap significant profits, especially as Iraq intensifies its focus on digital strategies and broadens its financial inclusion initiatives.
- In August 2023, the government inaugurated the National Data Center. The data center is part of the country's "digital transformation," a goal that is supported by external organizations, including the United Nations Development Programme, the World Bank, the UK Government Digital Service, the World Food Programme, the International Cooperation Agency, the Canadian Ministry of Foreign Affairs, and IMMAP.
- The healthcare sector authorities in the country are increasing their emphasis on new, smart technologies to modernize healthcare services. In February 2023, the World Health Organization (WHO), in collaboration with the Ministry of Health in Iraq, inaugurated the Health Digitalization Program to strengthen the health information system and produce data and information to facilitate evidence-based decision-making in the health sector. Such digitalization initiatives across various sectors, including healthcare, are expected to boost the market.
- Moreover, the MENA region is experiencing increased cyberattacks, which increased the demand for more robust ICT solutions, such as firewalls and anti-malware software, among others, to handle such breaches and ensure the security of businesses and individuals in Iraq. According to Microsoft, between July 2022 and June 2023, nation-state or state-affiliated cyber threat actors targeted Iraq in approximately 5% of network intrusions originating from the Middle East and North Africa.
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IT and Telecom Sector is Expected to Increase the Market Demand
- The IT infrastructure sector is poised to witness substantial growth during the forecast period, primarily fueled by the escalating demand for streamlined IT systems and digitalization. While the Internet of Things (IoT) represents the next frontier, its rising prominence also amplifies the risks, with more sophisticated systems becoming targets for lucrative malware attacks. As a result, the security services market is expected to most likely benefit from increased business adoption of cloud technology and IoT devices during the forecast period.
- The Ministry of Planning, in its 2022 smartphone usage report released on October 2023, stated that 86% of Iraqis over the age of 5 utilize mobile phones. The report highlighted a higher usage rate among males, at 90%, in contrast to females, at 81%.
- The government has allocated a large part of the budget to realize its vision and plans. Therefore, the market vendors continue to see the demand and growth opportunities in the country. In April 2024, the Iraqi communications ministry's Informatics and Telecommunications Public Company (ITPC) signed an agreement with Kuwait's Zajil Telecom to create an international transport corridor to Europe from Iraq that will pass through Turkey and offer an alternative route to those passing through the Red Sea.
- Recognizing the potential of 5G to bolster its economy and enhance citizen well-being, Iraq is actively embracing this technology. The sectors set to benefit most from 5G's efficiency and quality enhancements include energy, transportation, healthcare, and power supply. In October 2023, Iraq rolled out its latest 5G cellular network, joining a group of 54 nations at the forefront of this technology. The nation now plans to open bidding to global firms for the project.
- According to Ericsson, the number of smartphone subscriptions in the Middle East and North Africa has increased from 490.47 million in 2020 to 597.44 million in 2023. The rising smartphone penetration in the MENA region, including Iraq, is driving the demand for a wide range of ICT solutions, such as mobile network infrastructure and e-commerce platforms, among others.
