ICT Initiatives in Egypt
This is an overview of the ICT sector and various ICT policy issues in Egypt. These pages are a common effort with other non-governmental organisations (NGOs) worldwide to make ICT policy issues a public concern. For a wider angle, The Association for Progressive Communications (APC) offers information about ICT policy and internet rights on a global level. Furhter, a primer for ICT policy is the ICT Policy Handbook.
The Egyptian government has made information technology and telecoms a flagship developmental priority and has heavily invested and supported the sector. Egypt has become the largest Internet market and the third largest mobile market in Africa (after South Africa and Morocco) with an annual revenue of US$2.6bn (2004).
The main ICT sector stakeholders in Egypt are:
The Ministry of Communication and Information Technology (MCIT)
The Information Technology Industry Development Agency (ITIDA)
The Center for Documentation of Cultural & Natural Heritage (CULTNAT)
- The first submarine cable between South East Asia, the Middle East and Western Europe (SEA-ME-WE);
- The second cable (SEA-ME-WE-II), implemented along the same route, but serving more countries and using digital fiber optic technology;
- SEA-ME-WE-III, with extended coverage from Europe to Japan, Australia andcountries in East Asia;
- The FLAG Project (Fiber Optic Link Around the Globe);
- A submarine fiber optical cable with Lebanon and Syria (ALITAR-BRITAR);
- Microwave regional links to Libya and Jordan;
- TE satellite earth station with multiple connections to Intelsat, Inmarsat and Arabsat; and
- A submarine cable with Greece and Italy.
- Implementing modem pooling to divert Internet traffic to the data network and relieve switches from traffic pressure;
- Digital Subscriber Loop deployment by Telecom Egypt and service providers;
- Introducing other access technologies e.g. fixed wireless and fibre optic links;
- Building reliable Multi-Service Backbone based on ATM and IP routing;
- Establishing Internet Exchange Points as hubs for Middle East traffic; and
- Upgrading circuit -switching technology to more efficient packet-switching.
ICT Market: Mobile Communications and Broadcasting
Since the introduction of GSM services in 1996, the mobile communications market has witnessed strong growth, starting with 194,000 subscribers at the end of 1998, rising to 5.8 million customers at the end of 2003 and reaching 8.5 million customers in 2005. Egypt is the third largest mobile market in Africa after South Africa and Morocco. The mobile market is dominated by two private operators, MobiNil and Vodafone Egypt. Both networks offer 2.5G services, such as WAP, GPRS, SMS and mobile banking. GPRS is not widely used yet. Growth has been driven by prepaid services; the vast majority of subscribers now use their mobile phones on a prepaid basis. The licensing of a third mobile operator is under way. In late 2003 TE applied for and bought a third mobile licence from the National Telecommunication Regulatory Authority (NTRA), soon after the four-year exclusivity period of the current two mobile network operators ended. However, the plan was put on ice after a study showed that a third network was not economically feasible. The two mobile operators, MobiNil and Vodafone Egypt, have each paid LE1 billion to TE to acquire the frequency it bought. Yet, TE has one leg in the mobile market through its 25.5 per cent stake in Vodafone Egypt. However, MobiNil remains Egypt's dominant mobile operator with 3.29 million customers. Vodafone Egypt remains close behind with just over three million subscribers as of June 2004.Third telecom operator
MobiNil and Vodafone were for years the only providers for mobile telecommunications. In 2006 Etisalat was choosen as the third provider offering third generation (3G) services. The creation of a third operator is expected to regulate competition and decrease the market monopoly of the two previously exclusive mobile carriers. Although, it will be hard for the third operator to compete with the two companies before 2009 as they have an established market base with brand name and operational experience.Orascom Telecom's regional role
Expanding from its involvement in MobiNil, Orascom Telecom Holdings (OTH) has become the largest telecoms player in the region. OTH now holds ten licences, in, among others, Algeria, Pakistan, Tunisia, Congo, Chad, Zimbabwe, the Democratic Republic of Congo and Iraq—giving it some 8m subscribers. OTH announced its acquisition of a Bangladeshi mobile-phone operator, Sheba Telecom, for US$60m in September 2004. OTH has sold licences in Jordan, Yemen and a number of Sub-Saharan countries. The Egyptian Sawiris family owns 56.9% of the firm. Its shares are also traded on the London Stock Exchange in the form of global depository receipts.Hardware and Software production
Egypt is an importer of PCs and computer parts. Hewlett-Packard, IBM, Dell and Acer are the principal companies. Centra Technologies is the main computer assembler. The company is state-owned by Banha Electronics and International Electronics, a subsidiary of the Bahgat Group. Orascom Technologies is distributing hardware and software for global IT companies including Microsoft, Oracle, Novell, Hewlett-Packard, Lucent Technologies, American Power Conversion, and Netscape. In addition, Orascom owns an ISP and a software development venture. Microsoft is the principal seller of software. The largest local IT company is Raya Holding with registered sales of US$121m in 2003, including exports of US$16m. In 1999, the company was formed through the merger of seven local IT companies. Raya offers a range of services through its subsidiaries: Raya Integration, Raya Software, Oratech, Raya Academy, Raya Telecom, Raya Contact Centre, Protech and Raya Network Services. The company employs over 1,300 people. Raya has partnerships with major global IT companies such as Microsoft, Oracle, Cisco Systems and Intel. Sakhr Software is a regional software enterprise which creates software specifically for the Arab market and Arab-speaking user. It was founded in Kuwait in 1982, and was relocated to Cairo in 1990. The company's clients include Intel and Oracle as well as regional governments. In the ISP sector, LINKdotNET, owned by Orascom Telecom Holding Company, is the largest player, followed by Internet Egypt, Soficom and Menanet. Nile Online (NOL) is a major infrastructure and digital service provider in Egypt, offering online services to individuals, businesses and ISPs. NOL is a privately held company whose shareholders include the Egyptian Ministry of Information and several banks. The Egyptian Networks Company (EgyNet), established in 1998, built and operated the first privately owned public data network in Egypt. EgyNet has bought majority stakes in Soficom and Internet Egypt.The Smart Village
A 450-acre IT park – “The Smart Village” - was launched in September 2003, providing state-of-the-art infrastructure 28km outside Cairo. The Smart Village, is owned by a private consortium under the sponsorship of MCIT which holds a 20% shareholding. Major shareholders are Raya Holding, Orascom Group, EgyNet, Arab Contractors, Suez Canal Insurance and Banque Misr. Investors are permitted a 10 year tax exemption. The IT park has attracted international companies such as Alcatel, the Cairo and Alexandria Stock Exchange, Microsoft and Vodafone. Its facilities include a back-up bourse for the Cairo and Alexandria stock exchanges, Xeed -Telecom Egypt’s call center, a conference center and a hotel. To boost ICT small and medium enterprises, a venture capital company, the Technology Development Fund, was established as in mid-2004. The fund is financed by EFG-Hermes and managed by IdeaDevelopers with a capital of over $1 million. The Smart Village is expected to create over 30 000 technology jobs. The number of companies working in the ICT field reached 1152, employing 33,413 professionals.E-Government Initiatives
MCIT's e-government project was established to provide citizens day-to-day services through downloadable forms and instructions, e.g. how to acquire a birth certificate, checking the traffic fines to taxation and customs services. The e-gov’t site is also intended to enable technology transfer between local and foreign companies through partnership projects. An example of this partnership is the e-Government Gateway established with Microsoft corporation. Furthermore, information related to more than 700 services provided by the various ministries is available on the portal www.egypt.gov.eg.But something is missing ...
Yet despite these achievements Egypt’s network readiness was ranked (66) out of (115) countries in 2007 by the World Economic Forum. The Networked Readiness Index (NRI) is used to “measure the degree of preparation of a nation or community to participate in and benefit from ICT developments. The NRI is composed of three component indexes which assess: - environment for ICT offered by a country or community - readiness of the community's key stakeholders (individuals, business and governments) - usage of ICT among these stakeholders.”The Global Map of Digital Inclusion
Gender
Egypt’s ranking in the Global Gender Gap Report 2006 is (109) from 115 countries with Saudi Arabia (114) and Yemen (115). Women’s rankings in Egypt are according to economic participation and opportunity (108), educational attainment (90), health and survival (66), and political empowerment (111). Female literacy rate was 47% in 2005, though improvement in education enrolment is evident with 94% at elementary and 77% at secondary level, still the official workforce was 20% females in the same year. MCIT has initiated the following national and regional infrastructure initiatives:Core Backbone
For the modernization of the core backbone, transfer of voice, data, and video information throughout Egypt, over three years with a cost of $1 billion, TE is looking for strategic partners to provide financing and know-how for the deployment of the core backbone. Upgrading the core backbone is a supply push, which will enable TE to satisfy the increasing demand for capacity. TE implemented the first improvement phase of its core transmission network using DWDM technology, expanding the capacity of the network to approx. 15 times the current capacity without installing new fiber rings. TE deployed a new ATM/IP architecture for the core backbone that will offer integrated services for voice, data, and video with greater flexibility due to packet switching and IP-based technology.Dial Up
Egypt introduced the Subscription-Free Internet in 2002. Value added services are currently provided via a special numbering scheme, with the prefix 0908, at a costlier fee.ISDN
TE and ISPs provide high-speed Internet dial-up connections (64- 128 Kbps), through ISDN services across Egypt. The total number of ISDN subscribers is 12,539.ASDL
Due to Egypt’s local loop partial unbundling in April 2002, broadband Internet access via ADSL (Asymmetric Digital Subscriber Line) is available. In cooperation with TE, 8 data backbone licensed operators, are providing ADSL services. ADSL technologies deliver digital data at high speed (128–512 Kbps) over existing phone-lines. The monthly cost is US$24. The major Internet Service Providers in the country are allowed to negotiate their own international bandwidth agreements and not be tied to getting the bandwidth from TE.Leased Lines
Leased lines connections are available nationwide with speeds ranging from 64 kbps up to 155 Mbps. ISPs as well as TE provide leased line connections, mainly used by the business sector or other ISPs.Video Conferencing
Interactive Video Conference service is available over ISDN, TCP/IP (Leased Lines) and over the Internet. Video conferencing facility is used at the Ministry of Education, IDSC, MCIT and some private companies and International organizations.IP VPN
TE and ISPs provide IP Multi-service (voice, data and video) and Virtual Private Network (VPN) for customers who need a highly secured network. Dial-up VPN is also offered, where those who have been authenticated may access the network through a regular Internet connection with the added security.Voice over Internet Protocol (VoIP)
In April 2005, the NTRA has released the regulations governing the VoIP market in Egypt. PC-to-PC IP telephony calls will not be regulated, whereas services to end-users will be monitored for quality of service. Infrastructure-owning ISPs can, along with Telecom Egypt, resell IP connectivity to companies wishing to offer VoIP services, or sub-contract the networks' roll-out to other firms. In June 2005, LINKdotNET, a major privately owned ISP and solutions provider has become the first company to provide VoIP services in Egypt. An agreement has been signed with the National Telecommunications Regulatory Authority (NTRA), expanding the class 'A' ISP license granted to LINKdotNET to include providing VoIP services to agencies and corporations using VPN networks. NTRA are currently evaluating the next phase of implementing this service in order to allow Egyptian consumers to use VoIP from home to make international or local calls by the end of this year.The Broadband Initiative
The Egyptian government embarked on a broadband diffusion initiative in response to the low use of ADSL and other DSL services. The initiative includes the increase of ADSL lines up to 10 times, WiFi hotspots in public areas and the promotion of wireless LANs in residential areas. In the long run it includes also the introduction of cable modem for the delivery of advanced integrated services to households.Wireless Local Loop (WLL) – CDMA
TE is soliciting strategic partnerships to deploy a nationwide fixed Wireless Local Loop (WLL) system based on the latest CDMA technology. WLL cuts cots and efforts of installing copper cables to under-served areas. TE has issued a tender including 100,000 WLL/CDMA lines in the 800 MHz range during the fourth quarter of 2003. No single technology can be the best for all regions, and mixed solutions, using Inter-working Functions (IWFs) and gateways, may provide attractive options.Cairo Regional Internet Exchange
The Cairo Regional Internet Exchange Point (CRIXP) was formed in Cairo in December 2002. CRIX is a local and regional peering point that routes all intra-Regional Internet traffic among the operators without having to pass through the United States or Europe. This allows the regional data carriers to significantly optimize upstream capacity costs, enhance their existing bandwidth capacities and reduce the size of the routing tables worldwide. While CRIX is a joint venture project between National Telecom Corporation (NTC) of Egypt, and Flag Telecom – ECC, an NTC subsidiary, is currently hosting, operating, and maintaining the exchange point in its data center. By September 2004, there were ten national IXPs in Africa: Democratic Republic of Congo, Egypt, Kenya, Mozambique, Nigeria, Rwanda, South Africa, Tanzania, Uganda and Zimbabwe.E-commerce Initiatives
MCIT is planning to have e-commerce in Egypt by 2007. There are limitations, at present, for a widespread e-commerce service in the local market due to the relative diffusion of Internet users and the minimal use of credit cards in financial transactions within Egypt. Law No. 15/2004 on E-signature and Establishment of the Information Technology Industry Development Authority (ITIDA) was passed on April 22, 2004. The Central Bank of Egypt has licensed 12 banks to provide E-banking services. The services include phone and mobile banking as well as Internet banking services. With the planning of e-commerce, a full modernization of the National Postal Authority is a key government project. The Postal Authority started to build a network to connect its 3,000 post offices throughout the country. Plans for transforming the Authority into a joint-stock company are already under way. The opportunities exist for partnerships with the private sector to introduce electronic postal services and new applications in postal banking .Call Centers
Egypt is in the process of establishing the first transit telecommunications free zone. Located in Alexandria, the free zone will offer co-location services, managed services and application services via the 'Telecom Hotel'.Building human IT capital/resources
In 2000, MCIT in collaboration with Cisco systems started an advanced training programme to train 25,000 IT professionals and 5,000 engineers. In addition to the Cisco programme, training academies have been established in cooperation with Nortel, Ericsson, Lucent, Huawei and Alcatel to create a group of skilled IT professionals. These programmes are free of charge for the selected qualified youth being subsidized by MCIT and private companies.IT Accessibility
The diffusion of computers and Internet use is tied into literacy, availability of hardware and cost of online time. PC and Internet use is not growing as fast and as pervasive as mobile communication. The government took several initiatives to speed their diffusion.IT Clubs (ITCs)
Early pilot projects in 1997 with Century Kids Clubs and Technology Access Community Centers attracted mainly select groups of users (children under 15 and local professionals) and did not achieve the broad coverage and usage the Ministry wished to promote. The Ministry launched the IT Club initiative, designed to promote awareness and affordable access to ICTs to all Egyptian citizens including those in underprivileged areas. The main aim is to make Internet accessible and affordable (at around 20 cents/hour) to people with little or no prior experience with ITs. Under the initiative, MCIT selects and supports hosting organizations. Host organizations can apply to become an IT Club by preparing a detailed business plan outlining the services it will offer and a budget to demonstrate its financial sustainability. Criteria for selecting a host organization are:- Lack of suitable access to ICTs in the vicinity;
- The organization is in a suitable location accessible to a wide range of society;
- The IT Club will be accessible during suitable working hours;
- The organization focuses, or is accessible to, youth from 10-25 years of age;
- The hosting organization has qualified staff to manage the IT Club; and
- The hosting organization has been successful as a business organization.
