Al-Ahram Weekly   Al-Ahram Weekly
3 - 9 August 2000
Issue No. 493
Published in Cairo by AL-AHRAM established in 1875 Issues navigation Current Issue Previous Issue Back Issues

Front Page

Planning the communications revolution

By Niveen Wahish

The Ministry of Telecommunications and Information Technology is currently putting the final touches on a masterplan for the modernisation of Egypt's telecommunications services and infrastructure over the next three years.

Infocom Technology Incorporated (ITC), the consulting firm charged with drafting the masterplan, presented a blueprint to ministry officials and representatives of the industry this week.

According to Tarek Saadawi, head of the ITC team, the plan is estimated to cost some $1 billion. Apart from serving as a guide to planners and designers of Egypt's telecommunications infrastructure, it will be a reference point for service providers and potential partners wishing to invest in the Egyptian telecommunications sector.

Ahmed Nazif, minister of telecommunications and information technology, explained that the masterplan proposes legislation to regulate the telecommunications industry in a liberalised market and to give every citizen access to telecommunications services regardless of location or financial capability. The ministry is currently preparing a draft law for review by the People's Assembly during its next session. The proposed Act also protects consumer rights -- such as quality standards and service prices -- and sets down criteria for distributing operating licenses. It also increases the say of the Telecommunications Regulatory Authority (TRA) in regulating competition. Finally, the masterplan addresses the need for improving services. According to Saadawi, "Egypt's Telecom network has a solid platform that can easily evolve into the planned new infrastructure."

According to David Chessler, head of ITC's economic unit, universal access to telecommunications will be financed by telecommunication companies paying into a common fund, which is expected to permit low-income residential customers to pay installation fees for their fixed lines over a period of five years.

"Egypt's telecom network is growing faster than ever before," Nazif added. During the nine-month period between October 1999 and June 2000 alone, 630,000 new fixed lines were installed.

However, Saadawi pointed out that the infrastructure should also be developed to increase rural teledensity -- the number of telephones per 100 people -- from10 per cent to 14 per cent by 2010 and to boost teleaccessibility -- the number of telephone lines per 100 households -- from 40 per cent to 90 per cent during the same period.

In addition, Saadawi stressed the need for network modernisation and expansion, particularly the introduction of video and audio connections. Infrastructure development is also needed to accomodate the expected growth in internet traffic. According to Chessler, "Egypt could become a regional hub for telecommunications and the internet" since it is "well situated at the crossroads of cables in the region."

According to Chessler, the unbundling of services and the transformation of Egypt Telecom (ET) into a wholesale supplier for other firms is also necessary to permit the rapid development of the sector and to avoid the duplication of ET investments in core services by other firms. To unbundle its services, Chessler believes that ET should develop tariffs for a wide variety of services and be prepared to face commercial risks.

Once these reforms are in place, Nazif believes that the telecommunications sector will stimulate a qualitative shift in the modernisation of Egypt's economy. Thanks to the proposed masterplan and legislation, Egypt may soon be ready to sign the World Trade Organisation's telecommunications agreement.

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