Egypt secures bandwidth discount

The Egyptian Government says it has managed to remove one of the main barriers holding back growth in the ADSL market by negotiating volume discounts with its international bandwidth suppliers, Flag and Sea-We-Me.

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By  Richard Agnew Published  May 4, 2004

The Egyptian Government says it has managed to remove one of the main barriers holding back growth in the ADSL market by negotiating volume discounts with its international bandwidth suppliers, Flag and Sea-We-Me. The move forms part of the Ministry of Communication and Information Technology’s (MCIT) broadband initiative, to be announced at Telecom Africa 04, which is designed to breathe life into the market for high-speed internet services by generating economies of scale and reducing costs for ISPs. By passing cuts in international and local connection tariffs onto consumers, the MCIT is aiming to double the rate of broadband uptake this year. The market currently has only 4500 ADSL lines deployed so far to a population of around 70 million. “[The cost of international bandwidth] has been drastically reduced to about a third of what it was a year ago,” says Dr. Tarek Kamel, senior adviser to Dr. Ahmed Nazif, Egypt’s Minister of Communications and Information Technology. Key to the reductions has been the MCIT’s positioning of Egypt as a hub for regional IP traffic, a strategy which has increased the country’s bandwidth supply to 1Gbit/s and helped it secure volume discounts with suppliers. “We have [negotiated] a new model with the international operators to buy bandwidth, rather than leasing it. We will buy bandwidth long term, for fifteen years for example or the lifetime of the cable,” adds Eng. Alaa Fahmy, executive director of Egypt’s National Telecommunications Regulatory Authority (TRA). Further increases in Egypt’s bandwidth supply are planned next year. Flag Telecom, which collaborated with Telecom Egypt on the creation of the Cairo Internet Exchange last year, is in the process of installing a new 15,000km submarine loop between Suez and Hong Kong. Egypt will also accommodate a landing point and terrestial stretch of the Sea-We-Me 4 network linking Europe and the Far East.

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