Dubai Internet City
From Wikipedia, the free encyclopedia
| Dubai Internet City | |
|---|---|
| Type | Free Economic Zone |
| Founded | Dubai Holding |
| Headquarters | Dubai,  United Arab Emirates |
Dubai Internet City (DIC) is an information technology park created by the Government of Dubai as a free economic zone and a strategic base for companies targeting emerging markets. Here companies can operate without restrictions, such as a 100% foreign ownership, similar to those prevailing in other provincial economic zones in the United Arab Emirates. This freedom has led many global information technology firms to move their regional base and resources to premises in the DIC. DIC is located right next to other industry clusters such as Dubai Media City and Dubai Knowledge Village.
The economic rules of DIC allow companies to avail themselves of a number of ownership, taxation and custom related benefits which are guaranteed by law for a period of 50 years. Major companies which have established operations at DIC include Microsoft, IBM, Oracle Corporation, Sun Microsystems, Cisco, HP, Nokia and Siemens, Nera Telecom, as well as UAE based companies such as i-mate, Acette and many others.
DIC presently has over one and half million square feet of prime commercial office space, and there are over 850 companies with over 10,000 workers based in it. In March 2008, DIC announced a rent hike of 25% for leases signed after June 2008. The government imposes a rent cap on private landlords of 5%, but exempts its own projects from the law. It is claimed that the rent is still below the market rate, but this is in a city that proudly boasts it will soon have the most expensive office rents in the world as the London economy looks set to be hit by the world financial slowdown.
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[edit] Connectivity
Around 11.15 AM on January 30, 2008, a ship's anchor apparently severed fibre optic cables between Palermo, Italy, and Alexandria, Egypt. Providers across the Middle East and as far as India and Pakistan were heavily affected with a significant slowdown of communications reported. du was the worst hit and was completely down for several hours. Since du has a monopoly in the Free Zones, customers have no alternative connections. du's prices for a 2mbit internet connection (6GB transfer limit) is around 5 times the cost of a similar connection (with no bandwidth limit) in western Europe.
On 13 April 2008, Dubai Internet City's internet service provider du announced that all of its traffic would be routed via the UAE's censorship proxy which blocks access to any content deemed 'inappropriate'. du was already blocking VOIP services.[1]
So while Dubai Internet City sells itself as a business-friendly environment with excellent connectivity, the reality is now one of a heavily censored internet (including websites relating to alcohol and gambling) with popular services like Skype completely blocked.
The UAE proxy can be bypassed by various methods including by setting up a VPN to connect securely to a server in a free country such as the USA. Various US companies offer VPN services for around $15 per month, and the setup process is very simple. This restores full uncensored internet access, with the advantage that UAE authorites cannot 'snoop' on the traffic. All internet software such as VOIP and peer-to-peer download programs will also work. While the UAE may block access to the web sites companies providing VPN services to try to prevent UAE users being able to setup the services, it is possible to get trusted family members overseas to make the credit card transaction for you and supply you with the account details. Such options may be a necessity for many companies in the free zones to stay in business.
[edit] History
Dubai Internet City, a member of Dubai Holding subsidiary TECOM Investments, opened doors in October 2000.
Dubai Internet City (DIC) provides a knowledge economy ecosystem designed to facilitate the business development of Internet and Communications Technology (ICT) companies. It is the Middle East's biggest ICT infrastructure, built inside a free trade zone.
DIC is a strategic base for companies targeting emerging markets in a vast region extending from the Middle East to the Indian subcontinent, and from Africa to the CIS countries, covering 2 billion people with a GDP of $6.7 trillion. Within a short span of time, a dynamic international community of ICT companies has established itself in Dubai Internet City.
The global ICT giants like Microsoft, Oracle, HP, IBM, Dell, Siemens, Canon, Logica, Sony Ericsson, Schlumberger and Cisco, as well as many small and medium enterprises and entrepreneurial ventures are based in DIC. The ICT cluster in Dubai Internet City comprises companies from sectors like software development, business services, e-commerce, consultancy and sales and marketing.
The cluster environment of DIC provides most elements of the value chain for an ICT business. In addition, it has developed programmes that can be leveraged by the ICT community to explore and expand channel and business development opportunities.
[edit] Economics
Dubai Internet City, like the whole of Dubai, has seen rapid growth, with the Emirate's GDP rising at double digit rates. However, since 2003 inflation has climbed rapidly too, making real GDP growth significantly lower. The latest official government figures (2006) state inflation of 9.6%. By spring 2008, the level is somewhere over 10%, and approaching 20% according to the estimates of some international banks.
The government has implemented price controls on rent rises as well as fuel and basic commodities such as rice, but these cannot be viewed as effective long term anti-inflation measures in a market economy. The UAE has continued to reiterate the commitment to pegging its currency to a continually weakening dollar, which rules out significant interest rate rises - the accepted inflation-fighting tool in developed countries. Federal Reserve interest rate cuts of 1.25% in January 2008 have been mirrored by the UAE Central Bank, which is certain to fuel inflation further and weaken the currency.
In March 2008, DIC announced a rental increase to 180 AED per square foot - a 25% rise (the government's rent cap on private landlords is 5% for 2008). The DIC statement accompanying the release said "operating costs have shot up recently due to economic growth in the region". It made no mention of the decision by the UAE government in November 2007 to hike federal government employees salaries by a whopping 70%. With the increase, the rent at DIC is still a little below the prevailing market rate, although this is in a city that it is claimed will soon dislodge London as having the most expensive office rents in the world.
With the government continuing to resist de-pegging the currency from the US Dollar while excluding itself from the rent cap laws in order to fund the (largely Emirati) government workers' large salary increases, there seems now to be no prospect that the UAE will address inflation and restore the long-term competitiveness of its economy. With only 1 year leases available, investors must take a significant leap of faith that their business plans adequately factor in the relentlessly sprialing costs as well as the reduced incomes with the weakening Dollar-pegged Dirham.
[edit] Location
Dubai Internet City is about 25 kilometers south of the center of Dubai city on the Shaikh Zayed Road towards Abu Dhabi city. It is located in an area which is rapidly becoming the new downtown of Dubai, and is located between Dubai Marina and Jumeirah, two of the most exclusive (and expensive) areas of Dubai. It is less than 1 km from the sea coast and is near several five star hotels.
[edit] References
[edit] See also
[edit] External links
- Dubai Internet City — Official website
- Dubai Internet City image gallery
- Dubai Holding — Official website
- Dubai Internet City article
- Dubai set to have the most expensive office rents in the world
