Egypt: the ICT Sector as a Leading Model

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Egypt the ICT Sector as a Leading Model
Tarek Kamel Minister of Communications and
Information Technology
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Content

• Egypts Economic Reform
• Deregulation in ICT
• Public-Private Partnership
• Business Environment Investment Opportunities

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Economic Reform Agenda

• Competition is the governing principle of
  economic reform
• Transition from a state-dominated,
  centrally-planned economy, to a market-based,
  decentralized economy lead by the private sector
• Building the institutional and regulatory
  framework for a successful market economy
• Customs reform in September 2004.
• Tax reform in June 2005

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Economic Reform Pay-Offs

• Stock market capitalization increased from 42 to
  55 of GDP
• GDP growth of 5.2
• EGP 3.3 billion in proceeds of privatization
• Appreciation of the Egyptian Pound relative to
  the US dollar and the Euro

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Reform of the Telecom Sector

• Strategic direction to reform the sector and
  engage Egypt in the global information society
• Establishing the Telecommunications Regulatory
  Authority (98)
• Corporatization of Telecom Egypt (TE)
• Privatization of TE (end of 05)

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Egypt becoming a Regional Leader in Mobile
Technology

• Evolution of Orascom Telecom as a regional
  operator through acquisition of licenses in MENA,
  Asia and most recently in Europe
• Listed telecom companies are becoming the primary
  driver of Cairo-Alexandria Stock Exchange and
  are attracting FDI into Egypt either directly or
  through GDRs

Privatization of Mobile Telephony has resulted in
a wealth generation of almost EGP 35 billion
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Developing the Egyptian Backbone

• Introduction of Universal Service Fund to finance
  service provision in rural areas
• Annual investments of almost EGP 3 billion since
  1997
• modernization of core network
• adding almost 1 million new access lines
• introducing new services
• developing human resources

Telecom Egypt played a major role in the
development of ICT in Egypt
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Enlargement of Ownership Base of Telecom Egypt

• RFP was announced in local and international
  newspapers in May 2005 to select a Financial
  Adviser to conduct a comprehensive market study
  for enlargement of the ownership base.
• The study is to be forwarded to the Cabinet by
  the fourth quarter of 2005 to select to best sale
  strategy for enlargement of Telecom Egypts
  ownership base. The time plan and the sale
  strategy are expected to be announced in November
  2005 .
• Implementation is expected to take place before
  the end of the year.

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Deregulation of the Postal Sector

• Restructuring of the postal sector in Egypt in
  line with international best practices
• Licensing several companies for provision of
  Courier services in Egypt
• Egypt has proposed commitments under current
  round of WTO negotiations
• No limitations on National Treatment or foreign
  participation in courier companies

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Provision of International Telecommunications
Services

• Deregulation of international telecommunications
  services
• by Q1 2006
• Number of licenses to provide international
  voice and data
• Transparent licensing process
• Flexibility for using appropriate technologies
• Maximize the benefit of the central geographic
  location of Egypt
• Licensed ventures are expected to transfer
  know-how and attract further investments

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Convergence

• Technology is making Convergence a reality
• 5 million Internet users
• 10.6 million GSM users
• Next Challenges
• Telecom Media
• Triple Play

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Public Private Partnership A Key Strategy for
Development
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Successful Initiatives

• Subscription-Free Internet Services
• PC for Every Home Initiative
• IT Clubs
• Broadband Initiative
• Basic and Professional Training Programs
• More than 130 thousand trainees till August 2005
• E-heritage center (CULTNAT)

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E-Learning Competence Center in cooperation with
Cisco A regional initiative supported by the
WEFNile University A graduate-level,
research-oriented university specialized in
technology and managementRD Centers of
Excellence Virtual centers comprising academia,
local industry, and multinational companies
Incubators for Startup Companies
Developmental incubators inside the Smart
Village A technology development VC fund (EGP
50million)
A look ahead
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Business Environment Investment Opportunities

• ICT growth
• Business Opportunities

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ICT Growth

• Investments of ICT Companies in Egypt exceeded
  EGP 30 billion in the past 7 years
• Increase in number of ICT companies to 1571
  ( a 700
  increase in 7 years)
• Current number of employees of ICT companies
  exceeds 35,000

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Future Business Opportunities

• 3G Mobile Network
• Contact Centers
• Certification Service Providers
• CDMA Wireless Local Loop Deployment
• Egypt Post Outsourcing of IT operations and
  Outlet Franchising

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• Egypt.the Cradle of Civilization
• Is becoming the Center for IT and
  Telecommunications
• in the Region