Strong growth predicted for Egyptian datacomms

Internet and datacomms markets expected to grow rapidly over the next five years.

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By  Mark Johnson Published  December 14, 2004

New research on Egypt’s internet and data-communications market shows that the nation’s internet market is growing strongly. The report, “Egypt Internet and Datacomm Landscape Report 2004”, was compiled by the Arab Advisors Group and estimates the market will witness double digit growth over the next five years. “Spurred by infrastructure based competition and government initiatives, Egypt’s internet accounts are projected to grow at a compound annual growth rate (CAGR) of 23.7% between 2003 and 2008,” said Arab Advisors in a statement. The report predicts that internet accounts will grow from around 647,000 by end of 2003 to around 1.9 million by end of 2008, a penetration rate of 2.5%. Internet users are expected to grow from 1.94 million by end of 2003 to 5.6 million by end of 2008, a penetration rate of 7.4%. Egypt’s subscription-free Internet service generated revenues of US$66.2 million between January 2002 and August 2004. “The internet and datacomm markets in Egypt are fully competitive, where market liberalization started in 1999,” said Serene Zawaydeh, Arab Advisors senior research analyst. “The licensing framework is a three-tier one. There are currently 4 class-A licensees (carrier level internet providers) and 8 class-B licensees (public data network providers). By end of September 2004, the class-C licensees reached 186. These are internet service providers that obtain leased lines from class-A licensees.” She added: “The Ministry of Telecommunication and Information Technology (MCIT) has launched several initiatives to accelerate the growth of the Internet market, by making the service affordable to end users. The Free Internet Initiative, which was launched in January 2002, has enabled users to access the Internet from any phone line, without the need for a dial up subscription, and for the cost of a local phone call, which is EGP 1.23 (US$ 0.2) per hour.” The report added that the total number of unique dialers reached 1,013,459 by the end of August 2004, with a total of 782,011,194 minutes. The subscription-free internet service generated revenues amounting to US$66.2 million between January 2002 and August 2004. Broadband enabled value added services are also starting to mushroom in Egypt, according to the report. The Central Bank of Egypt (CBE) has licensed 12 banks to provide e-banking services. These include phone and mobile banking as well as Internet banking services. Egypt’s e-government portal provides several e-government services.

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