5 - 11 July 2001
Issue No.541
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Al-Ahram Weekly Online 5 - 11 July 2001 Issue No.541 |
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Free and fast, but...
Free Internet is getting everyone excited -- and confused. Amira Howeidy tries to fit the pieces of the puzzle
For some reason, the Egyptian government has decided that access to the Internet should be free by the end of the year. By then, one million Egyptians are expected to have gone online.
Link's attractive "life time Internet account" can not be missed by 6th of October bridge passers-by
photo: Sherif Sonbol
When the goal of free access was made public last February, summer was set as the target for its realisation. However, by the time the hot season arrived, the move was delayed till the end of the year. As the public eagerly anticipated the prospect of not having to pay to go online, Internet service providers (ISPs) began to grapple with the soon-to-be reality, which some expected to be painful and others boldly described as merely a new challenge. Thus, free Internet access will likely spark intense competition among the giants to reach as many end-users as possible throughout the nation. It will also mean that the recent proliferation of ISPs will have to find a new means of survival -- or perish.
The extent to which Internet access will be "free" requires some qualification. Although users will not have to pay a monthly subscription, as they have had to since the Internet was commercialised in Egypt in 1994, they will have to pay for the time they use the telephone line to connect to the ISP. At current rates for land-line telephone calls, an hour of access will cost LE1. The Internet provider and Telecom Egypt (TE), the national telephone company, will share the revenues for the time users occupy a line to connect to the net. ISPs will get 70 per cent while TE receives 30 per cent.
The first to announce their commitment to providing the service for free was LinkDotNet, Egypt's first commercial ISP, which is believed to have the largest subscriber base. Although the company's CEO Khaled Bichara stated that his company made its move to "keep our lead as an ISP," it is clear that Link was acting to comply with the government's policy. "We believe that this is where the market is going and where the government wants us to go. [Information and Telecommunications Minister] Ahmed Nazif sees that this will increase the number of Internet users," says Bichara, "so there is no point in waiting."
Bichara, 29, whose youth was the subject of Nazif's praise at a recent press conference, is confident that the free access model will be "very good" for the economy in the long term. "The more users, the more services, the more e- commerce, leased lines, hosting and Web development. So every ISP will benefit," he argues.
Whether Bichara's confidence stems from what seems to be government backing, even if on the moral level only, Link's decision to embrace the free access model seems to have pushed others to follow suit. Only days after Link's announcement that it will offer its services for free at the end of the year, MenaNet, published full-page ads in the papers offering the same service. And away from all of this hype, Telecom Egypt, was working quietly towards becoming an ISP as well, acquiring GegaNet, a private ISP for LE18.1 million and IDSC (the Cabinet's Information and Decision Support Centre which was the first and main Internet backbone provider in Egypt) for LE5.5 million.
Link has also been investing as an infrastructure (Internet backbone) provider. This leaves the market with four infrastructure providers; Link, GegaNet (Telecom Egypt), Nile Online and EgyNet, all of which are licensed to resell their service to others.
Until the service is free, Link is offering a "life time account" for LE99. MenaNet is competing with an LE98 offer for a lifetime account. Smaller ISPs, confused about what the players are offering, are at risk of being left out of the competition.
Engineer Mohamed Gamal of a cyber café called "Internet café" finds the term "free," Internet access, to be misleading, if not a total misrepresentation. "'Free' means you don't pay for anything. You don't pay for the time you spend online. I know that the free model will be applied on a limited number of ISPs, although it's not really something that they want as much as they're forced to do." For someone who works in the Internet service providing business, his lack of information on how the scene will supposedly shape up five months from now is telling of the confusion caused by the so-called free access model.
Take Ahmed Bahaa, sales manager of Datum, a small ISP. "We're not even sure that there will be free Internet," he tells Al-Ahram Weekly. "No one is clear enough about it. Telecom Egypt isn't clear and the model itself isn't that clear either. And although some ISPs said they'll adopt this model, none have done so yet."
But plans for offering free Internet access are going ahead, as far as the big ISPs are concerned, especially multi-purpose ones -- those that are infrastructure providers and ISPs at the same time -- like Link and GegaNet. Link is investing heavily in content, having made a historic deal with MSN to form a bilingual English-Arabic portal for the region under the name of MSN Arabia which is due to be launched in September.
But since most, if not all, ISPs will make their service free, what will make users dial one ISP and not another? "Everybody will say 'we'll add value to our service, maintain quality and make the user happy.' We're not going to re-invent the wheel and say anything different," says Bichara, "The only thing that's going to be different is that we know what the end- users like because we've been in this business for the last six years." Although Bichara will not say what he thinks the end-users want "because if I announce this now it's not going to be an advantage," he explained that Link is building a small portal that only users who dial the Link number to go online, will be able to view. This would make it exclusive to users.
Although TE's plans to become both ISP and infrastructure provider have been made public, its officials prefer to maintain a low-key profile "so as not to intimidate the other ISPs who view us as the government," Azza Torky, vice chairman of Telecom Egypt's International and New Services, division, told the Weekly. "There will be competition of course, but it will be fair and free. We won't favour our ISP just because it's owned by Telecom Egypt and there won't be discrimination."
Torky's careful approach reflects her company's overall policy at this stage: assuring other ISPs that competition will be fair and square. What exactly TE will offer to attract users to its ISP remains unclear, or at least that's the image the incumbent wants to project of itself at the moment. "Of course, we'll invest in content just like Link, MenaNet and the others," is all Torky is willing to say.
But Torky is certain of one thing: people are actually waiting for the Internet to be entirely free "and once this happens, this will change the Internet profile in Egypt completely."
Torky and Bichara expect one million users to go online by the end of the year. Bichara believes that by 2004, the number will rise to three million. "Once you break the one million number I believe things will move a lot faster," he says, "because once we have that number online, businesses will start focusing on providing services for one million users. They will want to provide online banking, online brokerage... the bigger your base becomes, the more entrepreneurs and ideas will gravitate towards the Internet." And at least we'll have accurate statistics for the number of Internet users in Egypt -- for once.
But will the current infrastructure accommodate this increase? Says Torky, "We delayed the implementation of free Internet till the end of the year in order to upgrade our network because we don't want it to affect the normal traffic [of voice calls]." Moreover, she points out, TE needs time to finalise the details that come with the free access model such as a billing system for revenue-sharing.
This speedy shift to the free access model, in accordance with the government's policy to expand the use of the Internet, is bound to push Egypt beyond the infant stage of e-commerce. But is free Internet good for us? Is it Egypt's first or last step towards becoming an IT hub? Will it help create computer geniuses? Or will middle-class families simply end up paying huge telephone bills?
Maybe we should wait till the end of the year.
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