The CEO Interviews: Dr. Ahmed Nazif, Egypt's Minister of Communications & Information Technology

"The number of new companies established between 2002 and 2004 doubled, and the number of new professional jobs created exceeded 25,000," says Dr. Ahmed Nazif, Egypt's Minister of Communications & Information Technology.

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By  Matthew Southwell Published  April 25, 2004

|~|drnazif_200w.jpg|~|Dr. Ahmed Nazif, Egypt's Minister of Communications & Information Technology|~|What is the main priority for the Ministry of CIT this year?

We are implementing a strategy to increase access within Egypt, for both voice and data. We’ve been seeing very large growth in both sides. Through the free internet model for dial-up, we now have about one million households accessing the internet. But what we haven’t seen in the same way is the development of broadband. What we’re carrying out now is an initiative to increase broadband access, and our target is to at least double the growth rate in broadband this year. We are also implementing programmes to utilise the infrastructure that has been developed, in terms of e-government, e-business and e-learning. Those are the three main directions we are moving in to construct an information society.

How are you aiming to decrease
the cost of broadband for ISPs?

About 70% of the cost comes from the connection tariffs. What we have done is to arrive at very good rates with the international carriers. Egypt has very good interconnectivity with the rest of the world, and we have a lot of available bandwidth because of the submarine networks that pass through Egypt. Because of that, we have been able to get excellent discounts. We will pass these discounts on. The other thing is that Telecom Egypt will contribute by drastically reducing the cost of co-location in its exchanges, as well as the local bandwidth from E-1 links in the country. We expect that the local costs of broadband will be slashed by half. We are targeting that the cost of an ADSL link will be half of what it is today. That is what will make the initiative happen.

What about the level of access to Telecom Egypt’s exchanges?
Telecom Egypt has been opening up its exchanges for the ISPs as much as possible. We have three levels of licensing and there are different rights within the licenses. Class A and B can co-locate within the exchanges. There is a legal framework in place for them to do this, and a standard agreement between Telecom Egypt and the ISPs. I think this helps a lot.

According to your e-access plan, cable operators may eventually be
licensed in Egypt. Is this still the case and how much of a role will
cable play?

That is true, but unlike the USA where they have had cable infrastructure historically, we don’t have that yet. The deciding factor is whether there is an economic model that would allow the infrastructure to be built and whether it could compete with other broadband technologies, especially wireless broadband. In our broadband strategy, there is more weight towards DSL and wireless than cable. Telecom Egypt has announced its intention to build a wireless CDMA network across Egypt. This will provide all the service providers with a new means for access and, strategically, it’s a step in the direction.

To what extent are you planning to regulate wireless hotspots?
The regulator has decided not to over-regulate Wi-Fi at this time. The direction was to step in and provide standard licenses to Wi-Fi operations. But now we have decided to take a step back and let the market decide how it will proceed. A good guess would be that the current class A and class B service providers, as well as the mobile operators, would be good contenders in Wi-Fi. But we are taking a wait and see approach.


What is your policy on the commercialisation of voice over IP (VoIP)?
As you know, Egypt has signed the WTO’s telecoms agreement and we have to deregulate completely by 2006. We are taking steps to gradually open up the VoIP service in Egypt and Telecom Egypt is taking steps in this direction. But so far we don’t have specific regulations out, and I don’t expect that to happen before the end of this year.

When will Egypt’s universal service fund be activated?
Yes, we are doing that. Our Telecommunications Act in 2003 created a universal service fund to be managed by the TRA. The TRA is taking steps right now to activate that fund, and we are expecting this to happen before the end of this year.

What about the industry’s prospects at the macro-economic level
— do you see any evidence of a recovery?

I’m very optimistic about 2004. I believe we have seen a lot of changes in the Egyptian economy since January. You can see that the currency has stabilised and our tourism had a record year in 2003. On the macro-economic level, a lot of stability is coming in.
As far as the ICT industry is concerned, it has weathered the situation very nicely. The years 2002 and 2003 were a bottleneck for us but there is growth within the industry. The number of new companies established between 2002 and 2004 doubled, and the number of new professional jobs created exceeded 25,000. We are also export-oriented, manifested in the presence of Egypt in ITU Telecom World in Geneva, as well as in CeBIT. Egyptian companies are becoming bolder outside the country, such as Orascom Telecom in Iraq and Alcatel Egypt building networks in Afghanistan, Algeria and Iraq. Quicktel, our telecoms exchange manufacturer, has just signed a contract in Iraq, and Siemens Egypt has signed one recently in Sudan. We opened up our Smart Village at the end of 2003, our ICT business park, and we have a very strong alliance with Microsoft. I see very good prospects for the ICT industry this year. ||**||

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