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DIC presently has over one and half million square feet of prime commercial office space, in which over 850 companies with over 10,000 workers are based[citation needed]. In March 2008, DIC announced a rent hike of 25% for leases signed after June 2008. The government imposes a rent cap of 5% on private landlords, 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 that it will soon have the most expensive office rents in the world[citation needed].
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[edit] Connectivity
On 13 April 2008, du (EITC) announced that all of its traffic would be routed via the UAE's censorship proxy which blocks access to any content deemed 'inappropriate'. du had been previously blocking VOIP services.[1]
While Dubai Internet City sells itself as a business-friendly environment with excellent connectivity, the reality is one of a heavily censored internet known to block content believed to be in disagreement with moral, social and cultural ideals of the UAE. In addition to webpage censorship, it is speculated that a variety of popular social networking services are blocked.
The UAE proxy can be bypassed by various methods including by setting up a VPN to connect securely to a server in another country to reduce the amount of Internet censorship, with the advantage that UAE authorities cannot 'snoop' on the traffic.[citation needed] While the UAE may block access to the web sites companies providing VPN services, it is possible[citation needed] to arrange overseas accounts. Such options may[weasel words] be a necessity for many companies in the free zones to stay in business.
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. The UAE telecommunications company and Dubai Internet City's internet service provider du was one of the worst hit, having been completely inoperational for several hours. Since du has a monopoly in the Free Zones, customers had no alternative connectivity during the outage[citation needed].
[edit] History
Dubai Internet City, a member of Dubai Holding subsidiary TECOM Investments, opened its 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 Corporation, HP, IBM, Dell, Siemens, Canon, Logica, Sony Ericsson, Schlumberger[citation needed] 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. Local bred technology companies like Ducont FZ LLC which was one of the earliest startups at DIC have showed that innovation is possible in the region and quite successful at that.
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.[citation needed]
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 70%.[citation needed]. 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 spiralling costs as well as the reduced incomes with the weakening Dollar-pegged Dirham.
[edit] Location
Dubai Internet City is about 25 kilometers south of downtown Dubai city, on Sheikh Zayed Road between Dubai and Abu Dhabi. It is located adjacent to Dubai Marina, Jumeirah Beach Residence and the well-known Palm Jumeirah, areas which are rapidly becoming three of the most exclusive (and expensive) residential areas of Dubai. DIC is less than 1 km from the sea coast and is near several five star hotels.
[edit] References
- ^ "du to filter web content". Gulf News. 2008-04-14. http://archive.gulfnews.com/articles/08/04/14/10205529.html. Retrieved 2008-04-14.
[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
Coordinates: 25°05′42″N 55°09′36″E / 25.095°N 55.160°E / 25.095; 55.160
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