The COVID-19 pandemic is impacting the way people live, work and play. Consumers and businesses are rapidly moving online in the strongest digitization push in history. Digital share of spend has grown fast since the start of the pandemic, despite the fact that Gulf Cooperation Council (GCC) countries are expected to show a temporary GDP decline of between three to seven percent in 2020. To a large extent, this transformation in the consumer's mindset will likely be permanent, as people become accustomed to buying items online – even groceries, which had hitherto seen only a sluggish uptake in online sales.

The recent increase in online activity, especially due to use of remote collaboration tools, such as Microsoft Teams and Zoom, and higher adoption of video on demand (VoD) and online gaming, has driven IP network traffic far above pre-COVID-19 levels. Network traffic now appears to be stabilizing at around 30 percent higher than in 2019, further pointing to the permanency of change that COVID-19 has triggered. To varying degrees, remote interactions are expected to become the norm for offices, schools, etc.,

especially as organizations have realized that they can operate remotely, often at the same or higher levels of productivity and cost efficiency. Given this "new normal", high-speed broadband networks in the Middle East will need to expand beyond business hubs and corporate centers faster than ever, providing "office-like" connectivity in suburban and residential areas. Telcos will obviously play a major role in providing this connectivity by accelerating rollout of 5G and fiber networks. This accelerated rollout is estimated to increase telcos' capital expenditure in the GCC, Jordan and Pakistan to around 23 percent of revenue by 2021, up from 18–19 percent in 2019. This will enable remote interactions for a broad swathe of consumers and enterprises, and hence support economic activity and growth. It will also allow telcos to manage the increase in network traffic resulting from new use cases in information and communications technology (ICT) as well as build sufficient network redundancy.

These new, digital-driven use cases are emerging in various sectors and include remote healthcare, smart office/ campus, digitized public services, home automation, AI surveillance, etc. The sectors impacted most strongly include healthcare, education, media and retail, all of which are expected to accelerate their IT spend growth by 2–3× over the next five years compared to pre-COVID-19 levels. Other major sectors in the Middle East, such as oil and gas, financial services and the public sector, are also expected to significantly increase their IT spend going forward. Most of the use cases triggered/accelerated by COVID-19 require low latency and high bandwidth in order to provide a seamless experience, something that 5G and fiber are best positioned to deliver. Speeding up the deployment of capital expenditure may be challenging for telcos, but it also represents an opportunity for them to diversify their revenue stream in a way that they were unable to do during the OTT (over-the-top) wave. In this report we analyze a few of the emerging use cases, the potential value chains and the revenue opportunity in these emerging use cases. We also look at the different roles that telcos can play – as strategic investor, payments enabler, analytics provider, customer acquisition driver or connectivity services provider – and the potential value that they can capture. Governments have a key role to play in leading their countries through the pandemic. →A Policymakers and regulators need to recognize that the ICT sector is an economic enabler: ICT investments have a multiplier effect. For example, we estimate that the rollout of 5G could add up to six to eight percent to countries' GDP in combined direct, indirect and induced impacts. In addition, broadband is increasingly seen as a human right: Governments are obliged to provide high-speed Internet connectivity in order to bridge the "digital divide". This will be especially true in a post-COVID-19 digital environment. The good news is that governments in the region are already responding to the pandemic with support for the ICT industry. For example, they have provided additional spectrum to telcos on a temporary basis, deferred loan payments, discounted utility bills and so on. Governments now need to build a conducive environment for ICT investment to enable a strong economic recovery and ensure long-term growth. We highlight some of the actions that governments/telecom regulators can take towards this goal, including providing temporary monetary relief to

telcos, driving operational efficiencies, and supporting the ecosystem for startups and small and medium-sized enterprises.