Post on 10-Aug-2020
Egypt Reforms: An update from the ICT Sector
Tarek Kamel
Minister of Communications & Information Technology
June, 2006
Content
• Egypt’s Political and Economic Reform
• The ICT Sector as a leading Model– Deregulation in ICT– Public-Private Partnership– Business Environment & Investment
Opportunities
Egypt
• A regional hub linking the Mediterranean, Europe, Africa, Asia and the Arab World
• 72 Million inhabitants with 58% under the age of 25 years
• Egypt maintains strong and balanced diplomatic relations with all neighboring countries
Political Reform
• Since mid 70s, Egypt has succeeded in putting together the building blocks of a democratic system
• Egypt is further empowering the democratic process
– Egypt's first multi-candidate presidential election took place in September 2005
– Most competitive elections in parliamentary history in November-December 2005
• New Cabinet in January 2006
Further Reforms
• Future Reforms are currently under discussion among stakeholders:-
– Enhancing Judiciary independence– More oversight authority for Parliament over
Government– Decentralization & Empowerment of Local
Administrations– Increasing representation of women in
Parliament– New law for Terrorism instead of State of
Emergency– New Electoral Law to improve electoral system
Economic Reform Agenda
• Competition is the organizing principle of economic reform
• Building the institutional and regulatory framework for a successful market economy
– Competition Commission– Consumer Protection Agency
• Customs reform in September 2004– Simplification of customs procedure
• Tax reform in June 2005– Reduction of tax rate up to 50%
Economic Reform Pays-Off
• GDP growth of 6.1%
• Reduction of inflation rate to 3.1%
• Real Income increased by 15-20%
• EGP 20 billion in proceeds of privatization since July 2004
• Investments and FDI boom since 2005
• Exports surged 23% creating 175000 job opportunities
Agenda for Further Reforms
• Further Empowerment of Sectoral Regulators:-– A new framework for Audio-visual regulations that enable
converged services – A new Education Quality Assurance & Accreditation
Agency to foster Education reform– A new mechanism for inviting private sector participation
in reforming the transport sector– Reform of water and sanitation sector through the
establishment of appropriate regulatory bodies
ICT Sector as a Leading Model
• Deregulation in ICT
• Public-Private Partnership
• Business Environment & Investment Opportunities
Reform of the Telecom Sector
• Strategic direction to reform the sector and engage Egypt in the global information society
• Restructuring subsidies in telecom sector– Aligning tariffs with costs of fixed service (April 2006)– Activation of Universal Service Fund
• Privatization of Telecom Egypt– Lead by CSFB, EFG-Hermes & CIB in Dec. 2005– Biggest IPO in the Cairo and Alexandria Stock
Exchange (CASE) with a value of around USD 1 billion
Egypt becoming a Regional Leader in Mobile Technology
• Development of Egyptian know-how in the area of design, establishment and maintenance of 2/2.5G networks
• Development of OrascomTelecom as a regional operator through acquisition of licenses in MENA, Asia and most recently in Europe
Introduction of 3G Services through 3rd
Mobile Entrant• Deployment of technology neutral 3G networks
– 11 Consortia of Egyptian, regional and international operators submitting technical proposals
– 9 Bidders technically qualified
• Public auctioning of license on 4th of July, 2006– Min. of EGP 2.5 billion as upfront fees– Min. of 3% of annual revenues
• Operations to commence in Q1 2007
• Penetration rate expected to grow from 20% in 2006 to about 45% in 2010
Postal Reform
• Restructuring & Governance of Egypt Post
• Liberalization & Establishment of Regulatory function
• Development & Modernization of infrastructure
• Post as a delivery arm for financial and e-government services
• Building on the trust with the citizens in maximizing the utilization of their postal savings
Further Deregulation of the ICT Sector
• International Submarine Cabling Systems with landing points in Suez and Alexandria in 2006/2007
• International voice gateways (Q4 2006)
• Cable operators for provision of converged services in Egypt in 2007
• Second fixed operator in 2008/2009
Public Private PartnershipsA Key Strategy for ICT Development
New Initiatives
• Launching the Egyptian Educational Initiative
• Restructuring the Broadband Initiative
• Establishing R&D Centers of Excellence
• Kicking-off Nile University
The Egyptian Education Initiative
• Launched in the meeting of the World Economic Forum in Sharm El Sheikh – May 2006 under the auspices of Egypt’s First Lady
• In partnership with leading ICT companiesCISCO, Computer Associates, HP, IBM, Intel,Lucent, Microsoft, Oracle, Siemens
• Working Areas:– Pre university education – Developing ICT industry– Sustainable Education– University-level Education
• First phase to target 820,000 students in 2,000 schools and over 300 faculties in 15 universities
Restructuring the Broadband Initiative
• Establishing a framework for promoting connectivity
– USD 1/month for local loop unbundling
– Slashes of 40% of prices in June 2006
– Support from USF for rural areas
• Reductions in connectivity tariffs to reach a wider base
– USD 17/month for 256 kbps– USD 26/month for 1Mbps
• Promoting provision of media services
R&D Centers of Excellence as a base for Innovation
Data Mining &Computer Modeling
WirelessTechnologies
Mobile Services& Applications
• Establishment of virtual centers of excellence in association with multinational and local companies working in Egypt and Egyptian ex-pats
• General Support:– Yearly award for best research– Patent filing and IP protection– Marketing of innovative ideas– Incentives for companies involved in R&D– Incentives for researchers
Business Environment & Investment Opportunities
• Fostering ICT Growth
• Partnerships with US Companies in Egypt
• Developing a new lCT Export Strategy
ICT Growth
• Investment of ICT Companies in Egypt exceeded EGP 35 billion over past 8 years
• Increase in number of ICT companies to 1594
• Current Number of Employees of private ICT companies exceeds 40,000
US Companies in Egypt
Company Regional & Global Support Activities
IBM Software Development Center of 400+ skilled IT developers
Mentor Graphics
Design Center of 170+ engineers
Intel Regional Platform Definition Center
Regional Software Enablement Lab
Microsoft Developer Support Center for Regional Developers
Software Innovation Center
CISCO Core competency e-learning institute
Positioning Egypt
• Developing an Export Strategy in ICT services building on Egypt’s competencies
• Egypt ranking 12 on a global index in a study conducted by A.T. Kearney
• Competencies including:– Adequate ICT
Infrastructure– Government-support
training programs– Multilingual
workforce
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Arabic Content
EL MUTAHADA
NAHDAT MISR
IT Products R&D/Engineering Design
Export Targets
2005 2010
TargetRevenue
R&D/Engineering
$280 m
Contact Centers
BPO Services
Localization
Arab Content
KPO Services
IT Products*
Technical Support
$100 m$30 m$40 m
$200 m
$75 m
$200 m
$45 m
$115 m
IT Services
CAGR
27%
38%43%22%
46%
72%
27%
25%
50%
USD 1.1 Billion
Thank You
www.mcit.gov.eg