1. Ministry of Communications and Information Technology
ICT Sector in Egypt:
A Model For Reform
Amr HASHEM
Ministry of Communications
and Information Technology
Arab Republic of Egypt

2. Agenda Outlook of Egypt ICT Reform Process Way Forward Timeline
Major Policies
Success Stories
Way Forward

3. Egypt Potential Geography Resources
Cross Connection between Europe, Africa and the Middle East.
Resources
$80 billion invested in modernization of infrastructure in 21 years
72 Million inhabitants with 50% under the age of 20
Ranking 17th worldwide in no. of yearly graduates
71 million with 2% annual growth rate
GDP per Capita of almost $ 1000 (PPP $ 4500) with almost 5% growth rate
Almost 17 million in school
2.1 million in higher education

4. Reform Process Empowerment of the Democratic Process
Multi-Candidate Presidential Elections
Parliamentary Elections under full supervision of the judiciary
Transition into a Market Economy
Building the institutional and regulatory framework
Multitude of opportunities for private investment
Stable Egyptian pound since December 2004
Strong increase in customer spending and confidence since new Cabinet Appointment in July 2004
Reduction of personal and corporate tax rates to become second lowest in the region
Increase in FDI and significant acceleration in privatization process

5. ICT Reform Process 1999 2002 2004 2005 1998 2001 2003 Jun. 1999:
Launch of Attempt to Privatize Telecom Egypt
Oct :
Establishment of Ministry of Comm. & IT
2002
Sept, 2002:
Failure of negotiations for establishment of revenue-sharing scheme for WLL
Jan. 2002:
Launch of a Subscription-Free Internet service
Jun. 2002:
Commitments to WTO concerning Basic Telecom.
Apr. 2004:
Ratification of E-Signature Law and establishment of ITIDA
May 2004:
Launch of Broadband Initiative
2004
Nov 2004:
Telecom Egypt receives investment grade rating
2005
Feb. 2005:
Launch of Universal Service Fund
Apr. 2005:
Initiating Privatization Attempt for Telecom Egypt
Dec 2005
De-regulation of telecom. market
2000
Jun. 2000:
Adoption of the Telecom. Master Plan
Jan. 2000
Announcement of National CIT Plan
Oct. 2000:
Postponement of Privatization of Telecom Egypt
1998
Apr. 1998:
Separation between telecom Regulation and Operation
May. 1998:
Privatization of mobile sector
2001
Jan. 2001:
Launching of a number of PPP projects
Jun. 2001
Public Consultation on draft Telecom Act
Jan. 2003
Ratification of Telecom Law 13/2003
Apr.2003:
Joining WTO- Information Tech. Agreement.
2003
Need some colors on the plan
1998: Separation of Operation and Regulation. Establishment of an
Independent Regulatory Authority
1998: Privatization of mobile sector
1999: Establishment of Ministry of Communications & Information
Technology. Development of 1st National CIT-Plan.
2000: Development of Telecommunications Master Plan
2001: Licensing of Network Service Providers
2002: Launch of a Subscription-Free Internet service
2002: Commitments to WTO Basic Telecom agreement
2003: Ratification of Telecom Law 10/2003
2003: Joining WTO- Information Technology Agreement.
2004: Ratification of E-Signature Law and establishment of ITIDA
2004: Launch of Broadband Initiative
2005: Launch of Universal Service Fund
2005: Privatization of Telecom Egypt
Dec 2005: Full De-regulation of Telecom market

6. Commitment of Political Leadership to support ICT development
Policy Principles
Involvement of partnerships throughout the process
Empowerment of the role of the civil society
Free flow of information to all stakeholders
Good Governance
Decentralization of decision making
Critical Role of Regulatory Institutions
Commitment of Political Leadership to support ICT development

7. Information Society Initiative
Inclusion of the stakeholders in the analysis and policy development process
Government
Technology Providers
Service Providers
Formulation of a master plan for ICT sector development in a deregulated environment
E-Readiness
E-Learning
E-Government
Execution of the plan in a Public-Private Partnership approach
Network operators
Academia
Financial institution
E-Health
E-Culture
ICT-Exports
E-Readiness : Equal access for All
E-Learning : Nurturing Human Development
E-Government: Government Now Delivers
E-Business : A New Way of Doing Business
E-Health : Increasing Health Services Availability
E-Culture : Promoting Egyptian Culture
ICT Export Initiative : Industry Development

8. Integration in Regional and Global Economy
Bi-lateral Trade Agreements
Multilateral Trade Agreements
Euro-Mediterranean Partnership
Greater Arab Free Trade Agreement
Common Market for East and South Africa
World Trade Organization
Full commitment to Reference Paper
Technology-neutral approach to licensing of services
Full Market Liberalization by the end of 2005
No limitations on Foreign Capital participation

9. World Trade Organization
Undertook commitments for Basic Telecom Liberalization under the BTA in June 2002:
Full commitment to Reference Paper
Technology-neutral approach to licensing of services
Full Market Liberalization by the end of 2005
No limitations on Foreign Capital participation
Reasonable and non-discriminatory terms for access and use of public telecommunications network
Right to interconnect with public networks
Telecommunications operators have flexibility to build or lease infrastructure
Creating a competitive market and regulating dominant operators
Consultative process in rule making
De-regulation when free competition emerges
Technology-neutral approach to licensing
More than 3.5 Gbps of international capacity for 5 million dialup users and 80 thousand broadband users

10. World Trade Organization
Egypt joined the Information Technology Agreement in April 2003
Progressive Approach to Tariff reductions over 4 years
Drop of tariffs by 2005
Extension for nascent industries till 2007
Accelerated the execution as part of the customs reform package in September 2004
Dropped the cost of deploying new ICT infrastructure by more than 33%
Instrumental in various initiatives for PC-ownership and broadband deployment
Joining the WTO- Information Technology Agreement for reduction on customs on ICT related products in April 2003
Successive annual reductions of tariffs to 0%
While the commitment of Egypt was to be implemented in 2005, Egypt has chosen to facilitate the process and removing customs on IT products as a part of the tariff reform process in September 2004
Weighted Tariffs on ICT products

11. Further Liberalization under WTO
An offer for commitments on Computer Related Services for improving Egypt’s positioning as an IT hub for MENA
No limitation on foreign staffing for the first 4 years of operations
No restrictions on foreign ownership or national treatment
Permitting cross-border supply of services whenever required
Restructuring of the postal sector in Egypt inline with international best practices
Licensing several companies for provision of Courier services in Egypt
No limitations on National Treatment or foreign participation in courier companies

12. Professional Training
Developing highly qualified experts through Internationally certified programs
Decision Support & E-Commerce
System Analysis & Design
Software Development
Communication Networks Management & Security
Call Centers Operations and Management
Executed in cooperation with Multinationals in a win-win approach
Quality of Human Resources
Agents Wages (DataMonitor)
USA Canada Mexico Egypt India Hungary Poland
Agent Cost 100% 89% 60% 54% 49% 54% 61%
Languages Availability
Proficiency in western languages due to the strong tourism industry
Major foreign universities residing: AUC, Canadian College, French University, and German University
All spoken languages are accent-neutral
Availability of scarce languages
Geography
Stability
Government Incentives
Over 15 Million Egyptians are currently in education
university graduates and 1.06 Million high school graduates annually
Over graduates each year are bilingual or multilingual
Over graduates each year from technical universities
Number of certified professional are almost
IBM Technology Development Center :
Largest software development lab owned by a multinational in the region.
Employing a team of over 350 highly qualified and certified technical professionals
Expected to grow to around 500 people in 2005.
Eight patent applications were filed in different technology areas this year.
99% of its services are delivered to IBM labs and customers in the USA and Europe.
Intel Software Enablement Lab & Platform Definition Centre
Established in March 2005
Technical support for regional software vendors to help market their products
Platforms designed specifically for the needs of Intel’s customers in Egypt, the Middle East and Africa
Intel chose Cairo as the location due to its central location in the Middle East, its skilled workforce and strong government support for ICT
Oracle Global Support Center
Established in Cairo in February 2005 in the Smart Village.
Provides high level technical and professional services to Oracle customers around the world.
Started operations with 40 highly skilled and qualified professionals, delivering 24X7 coverage to customers in Asia, Europe and the Americas.
Centers of Excellence for Transfer of Know-how
Establishment of virtual R&D centers of excellence in association with multinational and local companies working in Egypt and Egyptian ex-pats
Data Mining and Computer Modeling
Wireless Communications
Mobile and E-Services
Electronic Design
Graduates in Thousands

13. ICT Skills Development
Aiming towards improving ICT literacy
Office Applications
Internet
Web Development
Executed in cooperation with universities and NGOs
Qualifying trainees for International Computer Driving License
E-Learning Competence Center in cooperation with Cisco - a regional initiative supported by the WEF Nile University A graduate-level, research-oriented university specialized in technology and management
Graduates in Thousands

14. ICT Growth Private sector is leading the growth in ICT sector
Investments of private-owned ICT Companies exceeded EGP 10 billions
Number of private owned ICT companies exceeded 1500 companies employing 35,000 employees
Supporting the ICT Associations’ formation:
Egyptian Information Telecommunication Electronics &Software Alliance (EITESAL)
Adding ICT activities to the Investment Incentives law. (Year 2001)
Issuing Intellectual Property Law (Law No. 82/2002)
Issuing a progressive law to govern the communications industry (Law No. 10/2003)
Issuing a law for E-signature and establishing the IT Development Agency ( Law No. 15/2004)
Tax Reform Law (Law No. /2005)
Investments of ICT Companies in Egypt exceeded EGP 30 billion in the past 7 years
Share of ICT exceeded 3.5% of GDP from about 1.5 % in 1998 (100% increase in 6 years)
Increase in number of ICT companies to 1571 ( a 700% increase in 7 years)
Current number of employees of private ICT companies exceeds 35,000 in addition to almost 100,000 employees in government owned ICT telecom and postal agencies

15. Smart Village A business park over 300 Acres of land:
Multinationals (Microsoft, Alcatel, Vodafone, HP and Ericsson)
Call Centers
Technological incubators
MCIT and NTRA
A financial district in Phase III ( )
A business park:
Investment incentives (tax exemptions)
Over 300 Acres of land (90% are green areas)
hosting of up to 54 buildings ( sq.m. of office space)
Hosting 25,000 – 30,000 jobs
State-of-art infrastructure:
Fiber connectivity to each building
A high-speed network for transfer of data, audio and video managed by the private sector
Customers:
Multinationals (Microsoft, Alcatel, Vodafone, HP and Ericsson)
Technological incubators & SME
MCIT and NTRA moved in Dec as Phase II.
A financial district in Phase III ( ) for the Egyptian and Arab Stock Exchanges and other financial institutions

16. Regional Leadership in Converged Services
Emergence of Egyptian Companies as regional operators
Egypt is becoming a regional center for mobile network deployment and services
ISC – Alcatel
RNSC- Ericsson
An E-Content initiative for the digitization of Arabic Content
Privatization of Mobile Telephony has resulted in a wealth generation of almost EGP 35 billion
Egypt companies as regional operators through acquisition of licenses in MENA, Asia and most recently in Europe
Alcatel International Services Center
Listed telecom companies are becoming the primary driver of Cairo-Alexandria Stock Exchange and are attracting FDI into Egypt either directly or through GDRs

17. A service-oriented Growth
Encouragement of further Public-Private Partnerships for infrastructure, services and industry development
Provision of Converged Services
Postal Sector restructuring
Launch of MVNOs
Further regional role in coordination and harmonization of policies and regulations as part of the global Information Society
Promotion of ventures serving regional markets
Call centers
Internet exchange
regional service centers

18. Useful websites