My previous Equinix blog post detailed new infrastructure projects intended to meet international demand for diverse telecommunications routes through the Middle East, bypassing the Red Sea. In that blog post, I also related some of the geopolitical, telecom regulatory, technical and commercial hurdles that must be overcome to realize the vision of terrestrial diversity at appropriate scale.
But there’s an important perspective not covered in that previous post: how the Gulf Cooperation Council (GCC) nations in particular—Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE—stand to benefit from addressing these challenges. Can we identify the key factors that would help the GCC nations collaborate as a global telecommunications crossroads and leverage that position for mutual long-term economic benefit?
As a global provider of interconnection services and operator of 260+ carrier-neutral colocation data centers in 70+ markets, Equinix has a wealth of experience operating in every kind of regulatory environment, from highly liberal to stringently regulated. We also host more than 60 subsea cable system terminations worldwide. I will draw upon these experiences in the following analysis.
How do digital hubs compare to transport hubs?
Telecommunications and internet services are often compared with air travel: One moves data while the other moves passengers. We’ll continue this analogy by posing the question: What makes a great international transport hub, and what can that tell us about what makes a great digital hub?
The table above shows the top 5 airports globally, ranked by the number of destinations reached and the number of connections. To gain any real insights, we need to ask:
- Are the number of destinations and connections the best metrics for ranking airports? They demonstrate connectivity, but do they infer hub value?
- Even if we find meaningful evidence that transport hubs are valuable, who benefits from this? Is it just the airport, airlines and passengers, or does the wider national economy benefit as well?
Ultimately, the value of any great transport hub (air, sea or land) should be measured by its broad economic impact through enabling tourism and commerce. It should not be measured by the number of destinations it serves and especially not by the number of passengers that merely pass through on their way to other destinations.
Just like transport hubs, digital hubs should be evaluated based on how they impact the digital economy of a nation. In the digital world, data centers, service providers and IP packets are the equivalents of airports, airlines and passengers.
What does it take to go from pass-through to digital hub?
The industry tends to rank world’s greatest digital hubs (data centers and internet exchanges) with metrics such as the number of internet content, cloud and connectivity service providers hosted, subsea systems terminated, peak IP traffic and provisioned international internet capacity.
As with travelers passing through an airport on their way to somewhere else, IP packets passing through a subsea cable landing station (CLS) offer little benefit to the digital economy of a nation (measured as e-GDP). However, they are lucrative for a small number of licensed telecom operators.
In the context of the Arabian Peninsula, its role has historically been to pass traffic through to European digital hubs, often via the Red Sea corridor. Subsea cable landings across the region have largely failed to break out capacity to leverage its value in growing national e-GDP. The latest regional report from TeleGeography suggests that this is slowly changing, driven by local deployments of top content providers—particularly in Oman and the UAE.[1] The rate of this change is largely dependent on the factors detailed in this and my previous blog post.
A shining example of a leading global digital hub is Singapore. It has leveraged its advantageous position and its many subsea cable landings to grow its digital economy, and the GCC nations could learn a lot from its success.
Subsea cable landings in Singapore
There are 40 subsea cable systems that land at eight CLSs in Singapore. These landing stations provide relatively open access, and it’s simple to interconnect between subsea cable systems using cross connects. Singapore is also a liberally regulated market, which means that high data-center-to-CLS backhaul charges are typically not a factor. There are 11 new subsea systems planned to land in Singapore in the next several years, each of which could help drive further economic growth.
We operate five carrier-neutral Equinix IBX® colocation data centers in Singapore (shown above), with a sixth slated to open in 2027. We also host 10 internet exchanges, including Equinix Singapore Internet Exchange. Of the 40 subsea cable systems that land in Singapore, 19 of them either terminate directly in or extend to an Equinix colocation facility.
How does the Arabian Peninsula compare to Singapore as a digital hub?
The Arabian Peninsula, the largest peninsula in the world at more than 3 million sq.km, looks quite similar at first glance, but of course it dwarfs Singapore’s single nation-state of just 750 sq.km.
Subsea cable landings around the Arabian Peninsula
There are 34 subsea cable systems landing at 18 CLSs (often at multiple CLSs, serving multiple nations). There will be between four and eight new subsea cable systems ready for service in the next several years. The landings for these new cables will need to break the historic model of regeneration and subsea pass-through to meet international demand for diversity from the Red Sea. This is a pivotal opportunity for cities such as Salalah, Muscat, Dubai, Riyadh, Jeddah, Duba and Neom to become key markets on a new Arabian Peninsula digital super-highway.
Equinix operates six carrier-neutral data centers across the GCC region, four in the UAE and two in Oman, and hosts five internet exchanges, including Equinix Muscat Internet Exchange.
How the regulatory environment impacts the digital economy
The International Telecommunications Union (ITU) identified several factors that are crucial to an open, thriving digital economy, including:
- A responsive regulatory environment
- Cross-sector collaboration between ICT and telecom
- Cross-border cooperation and international connectivity[2]
The emergence of Singapore as a technological powerhouse[3] would not have been possible without strong governance driven by clarity of vision; responsive, iterative changes in regulation; and collaboration. If the GCC nations want to achieve similar economic growth, focusing on the criteria identified by the ITU—as exemplified by Singapore—would be a great start.
Ranking digital hubs by market connectivity score
TeleGeography recently introduced a market connectivity scoring tool[4] that ranks digital hubs with normalized ratios across multiple dimensions. These dimensions align with the ITU vision of emergent digital economies, based on ICT and telecom convergence.
Ranking of 6 digital hub markets – Data Source: TeleGeography Market Connectivity Score. IP Transit pricing is shown as median price for 10Gbps commit on a 10G port; all other metrics are normalized ratios across 3,000 markets analyzed worldwide (leaders in each metric score 100).
The table above lists some of the data from this service, ranking digital hub markets that have successfully leveraged their geographic advantages to build digital economies from subsea communications. (Rank is shown in the top row.) Clearly, there is still much to do in the UAE and Oman to close the gap on the global leaders.
It will be interesting to see if the GCC nations can leverage their advantageous geography to capture the current wave of demand for terrestrial transport via the Arabian Peninsula and thus grow their digital economies.
We at Equinix will be enthusiastically playing our part in the Middle East, supporting the efforts of our customers, partners and governments. We encourage all to reflect on how leading global digital hubs such as Singapore have navigated the path to digital economic success, and use that understanding to help plot their own paths.
To learn more about the Equinix approach to building interconnected digital infrastructure—in the Middle East and around the world—read our vision paper The future of digital leadership.
[1] TeleGeography, Regional Analysis 2024: IP Networks Middle East
[2] Raul Katz and Juan Jung, The Benchmark of Fifth Generation Collaborative Regulation, ITU, June 21, 2021
[3] National Strategies to Harness Information Technology, Chapter 2: The e-Transformation Journey of Singapore, Springer, 2012, ISBN 9781-4614-2085-9
[4] TeleGeography, Market Connectivity Score
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