Global Tariffs & Middle Eastern Telcos | Altman Solon

Altman Solon is the largest global TMT consulting firm with expertise in telecommunications consulting. Partner Björn Menden explains the indirect effects of U.S. tariffs on Middle Eastern telcos. 

As global trade tensions escalate—marked by renewed tariffs, retaliatory measures, and shifting alliances—telecommunications operators in the Middle East find themselves navigating a complex and increasingly unpredictable environment. While the region is not directly targeted by the most severe tariff regimes, it sits at the intersection of global supply chains that are being reshaped by geopolitics rather than market logic. Importantly, the strategic landscape varies significantly between the Gulf Cooperation Council (GCC) countries and the rest of the Middle East. While Gulf operators tend to be better capitalized and politically connected, often able to respond rapidly to supply disruptions, telcos in non-GCC countries such as Egypt or Jordan may face greater exposure to currency fluctuations, regulatory constraints, and slower procurement agility. In this climate, telcos must not only manage procurement risk and CapEx cycles but also reassess their long-term vendor strategies. 

Supply chain risk in a politicized trade environment 

Middle Eastern operators have historically depended on a global mix of vendors for core network infrastructure, radio equipment, and digital services platforms. But with rising costs, shifting regulatory frameworks, and delivery uncertainties, many operators are now facing real-time procurement challenges. Equipment sourced from vendors exposed to U.S. or Chinese policy shifts—whether on the basis of sanctions, licensing restrictions, or export controls—may become delayed, repriced, or politically sensitive. This puts pressure on delivery timelines and inflates costs, even in markets not directly subject to new tariffs. 

Adding complexity is the fact that several Gulf-based telcos have significant exposure to African and Asian markets, increasing their vulnerability to tariff-induced price distortions and supply shocks beyond the Middle East itself. As a result, decisions made in Abu Dhabi or Riyadh increasingly must account for the ripple effects of tariff regimes applied thousands of miles away. 

In this new era, the strategic question is not simply "who is cheapest?" but "who is available, stable, and politically viable in a volatile global system?" 

Supply responses: building resilience in a fragmented landscape  

In response to this shifting reality, Middle Eastern telcos are beginning to adapt their strategies. While the region has traditionally prioritized scale and cost-efficiency, today’s environment calls for flexibility, redundancy, and geopolitical foresight. 

• Vendor hedging: Many operators are diversifying vendor portfolios, not just for technical or cost reasons, but to ensure supply continuity in case of sudden policy shifts. For instance, major Gulf telcos have recently onboarded multiple vendors across radio and transport layers in markets such as Kuwait and Qatar to avoid over-reliance on any single supply chain. 

• Local and regional procurement hubs: Gulf telcos with multi-country operations are exploring more regionally integrated procurement models to buffer against global delays. A mobile network operator in the Gulf, for example, is exploring regional logistics hubs to coordinate sourcing across its African footprint and select Asian markets, improving responsiveness to bottlenecks and cross-border restrictions. 

• Digital sovereignty and risk-sharing: Some national regulators, including in Saudi Arabia and the UAE, are pushing for greater localization of data centers, cloud infrastructure, and core network services. Public-private efforts like the Saudi Cloud Initiative are examples of how infrastructure localization and strategic autonomy are being institutionalized. 

• Scenario-based CapEx planning: Operators are adopting more dynamic, scenario-driven CapEx models to address heightened macro-political risk—enabling greater flexibility and optionality in infrastructure investments. A GCC operator's staggered rollout of 5G edge infrastructure in Egypt, for example, was partly driven by vendor licensing constraints and component shortages, leading to more phased, risk-aware deployment planning. 

These strategies are still early stage for most operators, and their pace of adoption may differ between the Gulf and the wider Middle East. However, the direction is clear: resilience, not just efficiency, is becoming the new performance benchmark. 

Emerging tension points to watch 

As telcos build resilience, they may face friction zones that require more than operational adjustments—they demand strategic and even political recalibration. Key areas to watch include: 

• Cloud sovereignty vs. hyperscaler dependencies: As Gulf governments push for digital sovereignty, telcos partnering with U.S.-based cloud giants (e.g., AWS, Azure, Google Cloud) may encounter regulatory tension, especially if tariffs or sanctions are extended to digital services or data localization becomes mandatory. The potential for policy divergence—between national data strategies and multinational platform contracts—is growing. 

• Open RAN and vendor nationality: While Open RAN offers a path toward vendor diversity and innovation, it also introduces geopolitical trade-offs. U.S.-led initiatives emphasize open, disaggregated networks but rely on U.S. intellectual property (IP) and supply chains. European and Asian alternatives may offer neutrality but lack scale or standardization. Telcos must weigh resilience against performance risk and political exposure. 

• CapEx delays vs. 2030 national visions: Countries like Saudi Arabia and the UAE have ambitious digital transformation goals aligned with Vision 2030 agendas. Yet inflationary pressure on equipment, longer delivery timelines, and vendor licensing constraints could force a re-evaluation of project sequencing. Balancing strategic signaling (e.g., "we are leading in 6G R&D") with execution realism will test both operators and policymakers. 

• Digital infrastructure as a diplomatic tool: As infrastructure becomes entangled in global power competition, telcos may find themselves indirectly drawn into diplomatic negotiations. Choices around submarine cable routes, cloud hosting jurisdictions, or 5G core vendors could trigger unintended diplomatic consequences, especially for operators spanning GCC and non-GCC markets. 

A moment of strategic recalibration 

The question is no longer whether the tariff disruptions will reach the Middle East—many already have. The real challenge lies in how telcos in the region respond to an increasingly politicized global market. In this landscape, resilience isn’t about simply absorbing shocks; it’s about anticipating them, designing for them, and building enough strategic flexibility to thrive despite them. 

Gulf operators may be better positioned to absorb and adapt, while non-GCC players might require more external support or regulatory reform to respond effectively. But one thing is certain: the ability to adapt—to uncertainty, to shifting alliances, and to fast-moving policy—will create new pathways for competitive differentiation. 

To succeed, telcos must translate this awareness into action. This means conducting proactive risk assessments of vendor portfolios, integrating geopolitical analysis into infrastructure planning, and rethinking sourcing strategies to account for tariff scenarios and potential policy shocks. Strategic support—from advisory partners with a deep understanding of regional dynamics and global trade shifts—can help operators stress-test current approaches and uncover viable paths forward. 

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