The UAE enters an age of de-penetration


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A new report issued yesterday by the national statistics agency

, a giant leap from the 4.5-5.5 million figure typically used by economists and government departments.

I have my doubts about that number, and I am expecting a number of economists and others to raise their own doubts in the coming days. But on the assumption that this figure is true, it has some interesting implications.

To start with, the mobile penetration rate,

, falls from over 210% to around 140%, placing the UAE in the same basket as mature markets like Germany or Italy. The country's high rate of internet penetration - a key factor in its

, drops from around 75% (very high) to 45% (about average for the developed world).

The same revision happens with web services. As

, there are now around 1.6 million Facebook users in the UAE, making up 33% of the population, a very high penetration figure for a social networking service. With the new population numbers, that drops down to around 17%, still high, but not stratospheric.

What does all this mean? If one takes the number as a true reflection of how many people live here, it means mobile and internet companies still have plenty of growth ahead of them. It means a smaller fragment of society is connected to the web, and the ratio of digital haves to have-nots is lower than we once thought.

Most importantly, it means there are a whole lot more potential "converts" to the internet and its many wonders out there, just waiting for someone smart to find them. They probably don't earn much, and they probably will access the web mainly through a cheap Nokia handset. But they are out there. Hurry up and find them.