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TMT in the Middle East

  • Jordan
  • Technology, Media and Telecoms - General

03-08-2011

Following on from Eversheds’ merger with middle eastern law consortium KSLG (and Eversheds association with the Saudi Arabian office), in this month’s issue, we asked Nasser Ali Khasawneh, a founding partner of KSLG and managing partner of Eversheds KSLG Dubai office, to give us his thoughts on what are the ‘hot topics’ for the TMT sector in the Middle East over the next 6-12 months.

Nasser comments: “TMT is a particular specialism of mine, having worked as an in-house Corporate Attorney for Microsoft Corporation for four years, taking the role of Vice President of the Business Software Alliance and currently serving as a domain name panellist with the WIPO Arbitration and Mediation Centre in Geneva. These roles, alongside my day job, which involves a substantial amount of work for clients in the information technology and intellectual property space, give me a great insight into the TMT sector and what topics are truly affecting our clients at the moment.

I anticipate the next 12 months to be very active in the TMT sector in the Middle East. On the one hand, I believe that growth in this sector will mirror the growth in the wider economy. While we cannot predict a full-blown recovery in the region in the next 12 months, we are witnessing patterns of growth that are irregular but encouraging nonetheless. Mergers and Acquisitions’ work in the TMT sector, particularly in the IT space, will continue to grow significantly. Over the last few years, a strong pattern has evolved whereby regional private equity groups, largely funded by individuals and organizations based in the Gulf, have invested heavily in IT companies, or IP-based businesses, that have grown out of the Levant region, particularly Jordan. There has also been a large level of investment in Egyptian companies. This will grow over the coming period. The Arab Spring will be an important factor. While Egypt does seem to be on track towards political stability, developments in the region have created some uncertainties. This has lowered the price for major IT and IP-based assets, and I expect that investors will be chasing major bargains across the region in the coming period.

In this regard, it is worth noting that the creative industry as a whole is growing significantly in the Gulf, Levant region and wider Middle East. Innovation centred around software solutions and IT in general is thriving in various countries.

I envisage that most of the legal work will be around transactional issues and day-to-day commercial matters involving legal advice and services regarding traditional areas such as licensing and labour law related work. In terms of potential areas legal counsel will have to focus on, I have witnessed a developing interest amongst our clients in competition and privacy laws. As many countries in the region have new legislation in the books on these matters, and as many other countries consider legislation in this regard, there will be greater interest and demand in these areas. Also, compliance-related work will increase. In line with political developments in the region, there is a greater focus these days on accountability and good corporate governance. Finally, as countries and investors seek to diversify from more traditional businesses, I foresee a significant growth in investment in the IT and IP-related sectors.

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