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Development through ICT:Egyptian Information Society Initiative
Amr HASHEMMinistry of Communications & Information TechnologyArab Republic of Egypt
Agenda
Introduction Egypt’s Outlook Information Society
Initiative ICT Industry
Creating Favorable Environment
WTO Commitments Way Forward
National Action Plans
Regional & International Coordination
Egypt Today
A unique location linking major economic regions: Mediterranean, Europe, Asia, Africa, and Arab World.
Investing $80 billion over 21 years in modernization of infrastructure.
Egypt Today
65% under age of 25 Preparing young
generations by investing in: education, skills development,
and professional training.
Ranking 17th worldwide in number of yearly graduates
Egypt Today
Egypt is reincarnating into a modern, liberal & private sector led market driven economy.
A remarkable recovery through an extensive economic and social reform programs
Coordinating the efforts of the Government, the business
sector and the Civil Society in deployment and utilization of ICT for economic and social
development through various forms of Public-Private-
Partnerships
Egyptian Information Society Initiative
ICT & Economic Growth Higher productivity:
making it possible to adopt different structures and locations
New technologies allow for new methods of production Social Services:
social services promoting economic growth, such as health and education.
Investment: Investment in ICT is also significantly correlated with
growth (Easterly and Rebelo,1993) Rural Development:
There is evidence that teledensity is positively correlated with the level of income.
Teledensity & Income in Egypt
0
2,000
4,000
6,000
8,000
10,000
12,000
0 10 20 30
Teledensity
Inco
me $
E-ReadinessE-Readiness
Egyptian Information Society Initiative
Egyptian Information Society Initiative
E-Government
E-Government
E- Society
Civil SocietyE-Health
- - -
E- Society
Civil SocietyE-Health
- - -
E-Knowledge
E-LearningE-HeritageE-Content
E-Knowledge
E-LearningE-HeritageE-Content
E-Business
E-Business
CIT Industry Development CIT Industry Development
Legal ICT Framework
1997:Investment Incentives Law 1998:Separation of Operation and Regulation
Establishment of an Independent Regulatory Authority
1999:Establishment of Ministry of Communications & Information TechnologyDevelopment of 1st National CIT-Plan
2002:Intellectual Property LawWTO- Basic Telecommunications Agreement
2003:New Telecom LawWTO-Information Technology Agreement
2004:E- Signature Law
Basic Telecom Agreement (BTA) Arab Countries with BTA Commitments
Morocco (Apr. 94, Apr. 97, Oct. 00) Tunisia (Apr. 97)Jordan (Oct. 00) Oman (Dec. 00)Egypt (Jun. 02) Bahrain
MCIT and TRA studying the requirements of BTA (Winter/Spring 2001)
MCIT, TRA, MoFA and MoE Preparing the Final Draft of BTA proposal (June 2001)
Clarifying issues related to the BTA proposal (Fall 2001/Winter 2002)
Meetings for discussing Egypt’s BTA proposal (February 2002)
BTA proposal circulated among WTO members for approval (April 2002)
BTA commitments integrated into Egypt’s schedule (June 2002)
BTA Commitments (Cont.)
Reference Paper on Regulatory Principles
Table of Specific Commitments Grace Period for Market Reform Technology-Neutral approach to servicesDevelopment of Local IndustryNo Limitations on Foreign CapitalOpening up the market for new services
Competition in ICT
1996: Internet services provision 1997: public payphone services 1998: mobile telephony services - GSM 2000: provision of public data services
for business sector 2000: VSAT services 2002: Internet backbone infrastructure
rollout and wholesale services
2003: high-speed access – xDSL 2004: pre-paid calling cards
Fixed Services Annual Investments of
almost EGP 3 Billion since 1997: modernization of core
network adding almost 1 million
new access lines annually Introducing new services
Revisiting the Business Model: Consultation with
stakeholders Tariff rebalancing to
eliminate cross-subsidies Introduction of USF to
finance service provision in rural areas
0
2
4
6
8
10
12
99 2000 2001 2002 2003 July-04
No. of subscribers
No. of fixed lines
Millions
Mobile Telephony
2 Egyptian-International consortia: Vodafone: Vodafone PLC +
Egyptian Investors MobiNil: Orange + Egyptian
Investors (Orascom Telecom + others)
Impact of deregulation: Employment: 4000 jobs Investments: EGP 10 Bil. Wealth Creation: EGP 16
Bil. Governmental proceedings
of almost: EGP 7.4 Bil.
0.08
0.93
2.35
3.44
4.50
5.80
6.50
0
2
4
6
8
1998 1999 2000 2001 2002 2003 Jul-04
Millions
Internet Access
Subscription-Free Internet Services: Launched in Jan ’02 Interconnection between NSP and TE Internet at cost of local calls(0.2 $ per
hour) Improved QoS - Reduced Costs -
Utilization Growth Broadband Initiative
Launched in May ’04 Unbundling of the local loop Increase ADSL Penetration – Promote WiFi
Hotspots 50,000 ADSL Subscriber during First Year
Free Internet Nationwide
Minutes / Month 760 M
International Capacity
1.2 GbpsMil. Min. of Use International Capacity in Mbps
Total Unique Calling Numbers
1 M
Estimated Number of Users 3.6 M
Internet Service Providers 174
0
100
200
300
400
500
600
700
800
900
Jan 02 Jul 02 Jan 03 Jul 03 Jan 04 Mar 04 May 04 Jul 04 Q1 02 Q3 02 Q1 03 Q3 03 Jan 04 Mar 04 May 04 Jul 04
Info Technology Agreement (ITA)
Extension of the implementation for developing countries till 2005
MCIT, MoF, MoI&FT and MOFA studying the ITA in respect to: Impact on the sovereign income of taxes Impact on industry development
Reaching an initial proposal for phasing-in the items under the ITA
The goal is to promote the ICT sector by: Reducing producers’ costs of deploying ICT Encouraging consumer demand Encouraging innovation and development Creating job opportunities
ICT Imports TariffsTotal Customs
12%
Gov. RevenueSource: Monthly Economic Digest, November 2003 MOFT
776
441
964
472
1273
623
0
200
400
600
800
1000
1200
1400
1997 1998 1999
Imports Customs
Scheduling ITA commitments
Spare Parts,
Components
19%
Electronic Devices,
Equipments
33%
Communication
Switches, Cables,Semi Conductors Equipments
35%
Electric Cables,
Electric AC Switches
13%
Scenario 1:Phasing-in Implementation using a ‘Sudden-Death’: Year 1: Spare Parts &
Components Year 2: Electronic
Devices & Equipment Year 3: Electric Cables,
Electric AC & Switches Year 4: Communication
Switches, Cables & Semi Conductor Equipment
Reductions in ICT Customs
Scenario 2:‘Progressive’ Approach:Annual equal reductions on tariffs for ITA items
15.6
8.8
2.0 1.90.0
0.0
4.0
8.0
12.0
16.0
Ta
riff
%
Base rate GATT 2004 New Tariff2004
GATT 2005 2007
Promoting E-Access Buying a PC on monthly installments and no advance
payments Using the phone line as a collateral Highly efficient PCs manufactured or assembled locally 75 thousand PCs were sold since December 2002 Target to reach 200,000 households within a year
1500
2000
2500
3000
3500
4000
4500
09.01.01 28.07.01 13.02.02 01.09.02 20.03.03 06.10.03 23.04.04 09.11.04
3.50
4.00
4.50
5.00
5.50
6.00
6.50
C1700 LS15 Bingo 250
P2000LS Bingo 430
Exchange Rate
2004 Tariff Reforms
0.8
1.8
3.1
3.1
0.0 0.1
1.9
0.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
Spare Parts,Components
ElectronicDevices,
Equipments
CommunicationSwitches,
Cables,SemiConductorsEquipments
Electric Cables,Electric ACSwitches
New Tariff %
Tariff 2004 %
239
371
558
783
964
11331187
0
200
400
600
800
1000
1200
1998 1999 2000 2001 2002 2003 May2004
Source: The General Authority For Investment & Free Zones
No. of IT Companies
No. of IT Companies
10244
14183
19890
26132
3034732763 33941
0
5000
10000
15000
20000
25000
30000
35000
98 99 2000 2001 2002 2003 May2004
Source: The General Authority For Investment & Free Zones
No. of IT Labor Force
Alliance with MNCs
CompanyTotal
Investments (in USD Million)
Exports2002-2006
(in USD Million)
Increase in job
opportunities
Alcatel (French) 135 153 262Ericsson (Swedish) 112 106 448Siemens (German) 77 116 515
Nortel (Canadian) 6 15 28Oracle & their local partners (US) 50 123 3000
IBM (US) 40 99 500
Equant (French) 20 20 400
Total 440 632 5153
Expectations of Liberalization
Higher customer focus Bringing-in new services to cater to the
needs of various segments More efficient service delivery as a result of
the technology neutral-approach to regulation
Stronger Industry Promotion High-yield job creation as a result of market
growth and development Export-oriented industries through transfer
of know-how and innovation
Way Forward
Dialogue within the international community to promote technology transfer and facilitate participation of developing countries in the global information society
Regional coordination to promote economic integration and generate opportunities for regional players
Ongoing national consultation with market players and stakeholders to resolve various issues of concern regarding further market development