15 February 2023

New study shows how to develop a digital society – 100 times faster: Dubai improves Internet speed and emerges as an international Internet hub

Frankfurt am Main, 15 February 2023: The rapid growth in the local Internet infrastructure in Dubai over the last decade, including the establishment of the world-class Internet Exchange (IX) UAE-IX powered by DE-CIX, has increased the performance of Dubai’s Internet to the highest international standards. Latency (delays in Internet data traffic) dropped from 200 milliseconds (ms) in 2012 to less than 3ms in 2022. This is one of the findings of the study “The birth of an international Internet hub: a playbook for developing a digital society”, recently published by DE-CIX, the leading Internet Exchange operator in the world.

Surveying extensive business, regulatory, and technological KPIs in the UAE over the period 2012 - 2022, the study highlights the development of the digital ecosystem in Dubai, with the meteoric growth in the city’s Internet infrastructure and knowledge economy during this time. Other findings include a complete transformation of the data pathways for local data traffic: In 2012 90% of local data traffic needed to be transported outside of the GCC – to Europe, Asia, or North America – to be exchanged, whereas today 90% of locally-bound data remains local. Additionally, the international IP transit price has fallen by 98% and broadband Internet prices by around 85%. In the same time-frame, the UAE has seen the number of locally-registered networks grow by a factor of eight, and the UAE is now ranked first in the GCC in terms of fixed line and mobile broadband subscriptions. These results clearly demonstrate the impact of the country’s digitalization initiatives and the establishment of the UAE-IX on the performance and cost of Internet services for end users – not to mention the economic advantages for the region through the growth of the local digital ecosystem. As a result, the UAE GDP earned through the non-oil related economy increased by 35% between 2012 and 2022.

“What region does not want to become a point of reference for globally operating capital, a stronghold for innovations, and a location for the headquarters of internationally operating companies?” co-author of the study, Internet industry consultant Gerd Simon, asks. “An international Internet hub not only offers its population and companies better Internet performance: through the increasingly dense Internet infrastructure and regulatory openness, it encourages international companies to move there, it entices high performers and talents to call it home, it brings down the cost of connectivity, and it enables intelligent, data-based urban planning. In short, it makes a city or region fit for the 21st century.”

With more than 50% of the world’s population now living in cities, urban competitiveness is today not just a priority for municipalities, but also for national governments. Regions globally are striving to transform their economies and become a point of reference for globally operating capital, a stronghold for innovations, and a location for the headquarters of internationally operating companies. The study provides a roadmap for cities and regions to become internationally competitive, investigating what facilitates a city or a region to become an international Internet hub. Using Dubai as a basis, the study looks at what lessons can be learned from the process of successfully establishing such a hub.

“The study provides clear evidence of the power of digital ecosystems to transform economies, and once again shows how digitalization is interwoven through all areas of business and life,” explains Ivo Ivanov, CEO of DE-CIX. “Good access to digital infrastructure is not simply a convenience for our personal lives or an enabler of business success, but vitally important for the development of a city, region, or nation. Internet Exchanges like UAE-IX, being the heart and home of digital ecosystems, are a driving force for the digital evolution of a region and key to the digital life of the future.”

The study defines the five essential pillars of an international Internet hub – these being infrastructure, business & organizations, people & communities, the regulatory environment, and capital – that need to be built in parallel, and highlights the central role that an Internet Exchange plays in improving the performance and resilience while reducing the costs of Internet connectivity.