BUILDING AN INFORMATION AND KNOWLEDGE-BASED SOCIETY

Development of Egypt’s information and communications technology industries is crucial to the country’s social and economic advance

Egypt has embraced the benefits of the information era and ICT industries are expanding.

Egypt has established a very strong infrastructure network on which to base its plans for modernization and development. Large industrial zones and new urban areas have been created to stimulate industry, increase employment, attract foreign investment, and expand the inhabited area of the country. Airports and ports are being upgraded to support the country’s drive to increase exports and tourism.

Crucial to the government’s plans for social and economic progress is the expansion of the information and communications technology (ICT) sector, which has been growing at a rate of around five times that of the economy as a whole. “It is one of the drivers of growth, and we are implementing a very ambitious plan for the development of the sector,” says Minister of Communications and Information Technology Ahmed Nazif.

The Egyptian Information Society Initiative, an innovative partnership between the public and private sectors, is designed to help bridge the digital divide and facilitate Egypt’s evolution into an Information Society. The aim is to offer every individual, business, and community the opportunity to harness the benefits of the new information era, including e-government, e-business, e-learning, e-culture, and tele-medicine.

September last year saw the opening of Egypt’s first Smart Village—just a short distance from the Great Pyramids of Giza. Already home to Alcatel, Microsoft, Vodafone, and Telecom Egypt, the 450-acre technology park is scheduled to be fully operational by 2007.

AHMED NAZIF Minister of Communications and Information Technology

Deregulation of the telecommunication market will be complete by 2006. Meanwhile, the numbers of fixed line and mobile phone subscribers have rocketed; a huge leap has also taken place in the number of internet users.
Dr. Nazif says, “We now have the number one and number two mobile operators in the world—Vodafone and Orange—working in Egypt, and they are both doing very well.

“Egypt’s combination of low penetration and high growth means great opportunities for business, and I think we will be able to sustain that for at least the next 3-5 years. The basic infrastructure, the number of fixed lines, mobiles, and internet users are all growing at rates that are unprecedented.”

Egypt’s largest mobile phone operator, Mobinil, more than doubled its net income to £915 million Egyptian pounds ($148 million) last year. In February it announced it had reached the milestone of 3 million subscribers.

Osman Sultan, President and CEO, says, “The development of mobile services goes beyond the telecommunication sector; it is a fundamental infrastructure for the development of many different sectors.”

The prime example of an Egyptian company that has become a major regional player is Orascom Telecom Holding (OT), part of the Orascom Group. OT has grown to become the leading GSM operator in the Middle East, Africa, and Pakistan, and holds more than 10 licenses. In 2003, its number of subscribers across the region rose to more than 7.6 million, a staggering 70.7% increase on 2002.

One of Egypt’s largest and most successful conglomerates, OT is an integrated telecommunications company, with activities in internet and satellite, technical management, and telecom support services. The company is majority-owned by the Sawiris family and is traded on both the Cairo and Alexandria Stock Exchange and the London Stock Exchange.

OT began by acquiring Mobinil in 1998, in which it currently holds a 32% stake. Since then it has expanded its network to cover Algeria, Tunisia, Pakistan, Congo Brazzaville, Chad, the Democratic Republic of Congo, and Zimbabwe.

NAGUIB SAWIRIS Chairman and CEO of Orascom Telecom

Naguib Sawiris, Chairman and CEO, sums up his philosophy thus: “I am a risk taker, but I do not take uncalculated risks. I decided to go for the region before Telefonica or Orange or Vodafone came.”

The company’s most recent advance came in October 2003, when a consortium led by OT won the tender for the first license to provide mobile telephony services in the central region of Iraq, including Baghdad.

For the present, however, OT is focusing on growth and profitability in its core operations. “We have a lot on our hands,” says Mr. Sawiris. “In Egypt, you have a country of 76 million and only about 4 million have mobile phones. In Pakistan, we are adding around 100,000 subscribers every month in a country of 140 million people; we could end up with 10 or 15 million. In Algeria, it is the same story; we have more than 1.2 million subscribers in a country of 36 million people.”