Home Africa and the Middle EastAfrica and the Middle East I 2002 Egypt’s Big Leap

Egypt’s Big Leap

by david.nunes
Amr Hashem Issue: Africa and the Middle East I 2002
Article no.: 2
Topic: Egypt’s Big Leap
Author: Amr Hashem
Title: Head of Policy Unit
Organisation: Ministry of Communications, Egypt
PDF size: 24KB

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Article abstract

The telecommunications revolution hit the world with a vibrancy and urgency that caught many nations off-balance, sending them spiralling in their efforts to readjust, reassess, and reconstruct their technology infrastructures and development schemes. It took a solid vision, a comprehensive blueprint and unyielding commitment on the part of Egypt’s leadership to place the country smoothly and prominently on to the international telecommunications map where it now boasts a world-class telecommunications infrastructure. The foundation of the Ministry of Communications and Information Technology (MCIT) in 1999 was the first page of a new chapter for the nation. It echoed foresight and awareness; a leadership concerned with catching up with advanced nations in the digital divide and re-inventing Egypt as a regional telecommunications hub.

Full Article

The Master Plan Premised on the belief that a solid infrastructure, information content and well-trained human resources are pivotal to the successful formation of an information society, Egypt’s National CIT (Communications and Information Technology Plan) takes the hands of different governmental entities and binds them to the private sector – a move with an already proven track-record, given the country’s thriving liberalization of the Internet, cellular phone and payphone markets. The outcome: high penetration rates, more customer-oriented services,and lower tariffs. Detailed studies of the existing infrastructure and services, and the efficiency of their functionality and usage, led to an integrated infrastructure and service delivery model. The resulting blueprint was fine-tuned into the current Telecommunications Master Plan. The plan – adopted in 2000 by the MCIT, the Telecommunications Regulatory Authority (TRA) and licensed operators – provides an action plan for upgrading the core infrastructure. It calls for progressive and systematic introduction of new platforms and services under a tri-layered (value-added, co-location-based, and core services) sectorial liberalization plan. Satisfying the end-consumer is the key to the plan. The primary objective is the continuation of liberalization of value-added services – those that provide extra value in addition to basic access service, such as prepaid phone cards and content. Given the effort to maintain business standards and targets, value-added services brought about innovation and frequent technological upgrading. The evolution of custom-made packages targeted to the end user took root with this change. This became even more prominent with the initiation of the second layer, the basic-services liberalization scheme. Aimed, ultimately, at establishing access networks for basic communications (public telephony, Internet infrastructure, cellular phone, etc), this scheme has been segmented to assure co-ordination between the various operators, as well as the efficient sharing of resources. Central to transforming Egypt into a telecommunications hub for the Arab world and Africa is the third and final layer – that which includes outside plants, fibre infrastructure, and international gateways. Modernizing this core backbone – a US$1 billion project – will include upgrading the capacity of its core transmission network using DWDM (dense wavelength division multiplexing of optical signals) technology to expand the network’s current capacity almost 32 times. The upgrades, started to solve bottlenecks in the network, will ultimately facilitate the transfer of video, voice and data, throughout the country and to the rest of the world. Human Resources Development Infrastructure and capital resources aside, it is the people are at the root of a country and its development. Given Egypt’s firm belief that human resources are the most valuable assets in the development equation, its biggest and undeniably most important investment, is that which it is making in its people. In co-ordination with universities, schools, public libraries and NGOs, the ministry is setting up 300 technology clubs around the country; giving the masses Internet access and training. Beyond the grass-roots level, however, more specialized training is critical if Egypt is to remain a player on the international telecommunications scene. The ministry is thus partnering with multinational corporations to develop and implement subsidized training programmes. The plan aims to train 5,000 young professionals annually. Returns are already spotlighted; a core of skilled CIT professionals commended by leading employers around the world. Telecom Act Central to the successful transition, and continued development, of Egypt’s telecommunications presence around the globe, is an enabling legal framework. MCIT, for this reason, drafted the Telecom Act that encourages deregulation and transparency. Under the designated authority of the TRA, the Telecom Act lays the foundations for licensing national companies for the management and operation of networks and services. The Telecom Act encourages competition with full transparency, protection of consumer rights, quality service at affordable rates and maximized returns on the use of the frequency spectrum. The Act also organizes the licensing of communications services and the introduction of foreign markets to Egypt’s communications services. Restructuring and regulation continues with the MCIT’s supervision of Telecom Egypt’s (TE) programme for tariff rebalancing and unbundling of local network components. The ministry also worked with the TRA in granting licenses to leading local Internet service providers (ISPs), enabling them to establish independent infrastructures; hence, gaining autonomy from Telecom Egypt. The results were dramatic: dial-up Internet access costs plummeted to the level of local-call cost. Successive reductions, amounting to over 70 per cent, on Telecom Egypt’s international lease lines were also monitored by the MCIT over the past year. The reductions brought tariff levels down to one comparable to European Union averages. Investment Opportunities Such activities – and the initiative to establish a free zone in Egypt offering reduced prices to telecommunications links serving transit traffic – have played significant roles in increasing both foreign and local investment in the industry. In turn, accessibility has sky-rocketed over the last two years, access tariffs decreased, and customer-focused services have bloomed. By December 2001, Internet users totalled 1 million, cellular phone subscribers reached 3,400,000, and fixed-line subscribers numbered 6.8 million. The numbers are expected to increase to 2 million, 4.8 million, and 7.5 million, respectively, by end of 2002 – a sizeable leap compared to December 1999 when there were 300,000 Internet users, 910,000 cellular phone subscribers, and 4.7 million land-line owners. The results are tangible and expected to continue into the coming year as a result of the search for a third cellular phone operator to provide additional competition and cause even more of a flurry in the sector. The licensing of seven US$100-200 million Internet and data operation companies has also pushed the Internet arena to the forefront. Telecom Egypt is now upgrading telephone switches to its new IP backbone and is upgrading its infrastructure for offering DSL services in Egypt. Such changes reflect a page in a large portfolio of services targeting ISPs and end-users. The portfolio is to be managed by a new subsidiary of Telecom Egypt, which it is currently seeking strategic partners for this purpose. Investment is also expected to pour in with TE’s intended deployment of a nation-wide CDMA fixed wireless local loop system, for which it is seeking ‘build-own-operate’ (BOO) bidders. The project, part of the ministry’s goal to increase teledensity and accessibility nation-wide, will enhance services and technology in the sector, as well as expand the skilled labour force and generate a wealth of job opportunities. Conclusion Confidence in the National CIT plan is strong, and the MCIT’s confidence in the path it is taking is firm. The blueprint proved workable, and the Master Plan, consequently, has fallen concretely into place. The buzz of communication and information technology vibrates through Egypt’s air, and communications services are sprouting steadily around the country. As a nation, the public sector, the private sector and the people have worked hand-in-hand, head-to-head. Taken as a whole, Egypt has moved to a new plateau and is consolidating its future as an international communications force. It is time now for the continent to work as one; to create a dialogue between policy makers, regulators, vendors, network operators and service providers. One nation can make a change, but the nations of a continent, working together constructively, consistently and co-operatively, can create a communications revolution.

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