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Al-Ahram Weekly 4 - 10 November 1999 Issue No. 454 
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Published in Cairo by AL-AHRAM established in 1875 |
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Al-Ahram Weekly 4 - 10 November 1999 Issue No. 454
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| Published in Cairo by AL-AHRAM established in 1875 |
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Egypt Region International Economy Opinion Culture Features Profile Travel Living Sports People Time Out Chronicles Cartoons Letters No IT without telecom
By Niveen WahishA few years ago, there was only one telephone line for every 50 persons in Egypt. Today, there is one line for every 10 people. And, with a new minister for the sector, it is expected not only that the number of voice lines will increase, but that data lines needed, for example, for the Internet, will witness a similar spurt. Besides the new minister, the ministry has also been given a new name. Whereas telecommunications and transportation were previously joined together under one roof, today telecommunications has an independent ministry and its name has been modified to the Ministry of Telecommunications and Information.
The new name alone implies that this sector will be subject to major changes in the coming years. Bahaa El-Koussy, public relations manager of Click GSM, one of Egypt's two mobile phone operators, said that the government has adopted a more advanced attitude towards the sector. Telecommunications and information technologies have become "very much integrated," according to El-Koussy.
Reiterating a similar view, Mohamed Omran, managing director of Misr Information Services and Trading, an Internet Service Provider (ISP) and a digital stock market data distribution system company, said that merging the information and telecommunications industries is a step that is bound to strengthen the former. The information industry needs a strong telecommunications infrastructure in order to grow. "It is essential that telecommunications' basic infrastructure is strengthened, as well as the specialised data lines," Omran said.
But this is not the only issue that needs to be addressed. International data lines currently are overpriced. While a data line with a capacity of 64 Kilobytes/second costs $6,000 per month in Egypt, it would cost $4,000 in neighbouring countries. "To encourage multinationals to set up information technology industries in Egypt, we have to offer attractive prices," said Omran.
The new telecommunications and information minister, Ahmed Nazif, who previously worked as a professor at Cairo University's Faculty of Engineering and supervised various IT-related projects, is seen as the ideal man to carry out such reforms.
Speaking at a press conference, Nazif seemed not only well aware of the sector's needs, but also that he already had an action plan for the new ministry.
He pointed out that one of the ministry's main tasks is to support, develop and strengthen the information technology and telecommunications industries in Egypt in order to create more jobs and boost Egypt's exports from the sector. According to Nazif, the IT industry worldwide is worth some $200 billion and is expected to grow to $600 billion. He is hopeful that Egypt may one day be able to export its fair share. Nazif would like to see Egypt (whose population is equal to one per cent of the world population) seize for itself at least one per cent of the annual world IT output, which equals some $2 billion. "This is more than the Suez Canal's [annual] revenues," he commented.
Egypt's IT industry, currently valued at $50 million, has a total estimated export figure of $15 million, which clearly shows that the industry has a long way to go.
Nazif believes that Egypt has one major asset that could help it overcome the difficulties -- its youth. Fifty per cent of the country's population are under the age of 25. These young brains have to be nurtured. "The role of the government is creating the proper environment for these brains to produce," said Nazif.
Egypt's plan for boosting the information technology sector was first outlined in a speech by President Hosni Mubarak last September before the First National Conference for Information Promotion. The plan includes an active governmental role in developing local demand; elaborating a marketing strategy for locally-produced software by studying the needs of other countries, as well as developing Egypt's own marketing techniques. Developing human resource capabilities is another priority item which requires government support through the provision of training and education. Furthermore, it is felt that new legislation is needed to boost the industry. In this regard, copyright laws are essential because, as Nazif put it, "this industry will not grow without protection and, without these laws, international IT companies will not invest in Egypt."
However, such targets will remain largely beyond reach unless the telecommunications infrastructure is expanded to accommodate more voice and data lines at higher speed and with greater coverage of the country. Nazif pledged to deal with these needs and to cut down on the prices of data lines, which are burdensome to Internet providers and reflect on the rate users are charged. Average monthly Internet rates stand at around LE100. Nazif hopes this may drop to LE50 in the near future.
Nevertheless, many experts agree that the key to revitalising the telecommunications sector in Egypt is the privatisation of Egypt Telecom (ET), Egypt's national telecommunications company. Although it has been announced that the company is currently being valued and that a 20 per cent stake in it will be put up for sale, nothing has yet materialised. Experts in the business insist, however, that this is an issue in which the government needs to show more resolve because "any upgrading of ET will reflect on the entire industry," as one telecommunications expert put it, speaking on condition of anonymity.
