Mohamed Omran: MCIT studying offering WiMax operation license
CAIRO: The Egyptian IT sector received strong acclaim Thursday from several representatives of local and international corporations including Vodafone Egypt, ITWorks, Xerox Egypt and Minah Ventures despite the absence of Minister of Communication and Information Technology (MCIT) Tarek Kamel on the closing day of the fourth annual Egypt Invest Conference.
Mohamed Omran, CEO of MCIT s Information Technology Industry Development Agency, represented Kamel but offered little information regarding the government s plan to further develop the sector and encourage investment.
Still, new believers in the sector included Minah Ventures General Partner Mathew Pedley. With the highest number of engineers in the region, 2.5 million, and the lowest salaries, averaging $14,000 (LE 80,000) annually, Pedley said Egypt can become a regional leader in the sector much as India has achieved on a global scale.
Minah is a San Francisco-based venture capital fund that targets IT start-ups in all stages, specifically those of Middle Eastern origin. The fund boasts a 20 percent-plus internal return rate on investments exceeding $150 million since 2002.
[The numbers are] a powerful argument for outside companies looking to come into Egypt, said Pedley. The good news is, it s a virtuous cycle. As tech start-ups take hold in an area and their employees are trained and qualified, they go on to start their own companies.
What Egypt needs, if it chooses to follow the successful Indian model, is an upgraded education system, government incentives to start-ups including strengthening intellectual property rights laws and foreign partnership, preferably from ex-patriots that have developed successful IT businesses elsewhere and are now looking to offshore their operations, Pedley said.
Some of the biggest IT sector companies in the US were launched by Middle Eastern entrepreneurs, including eBay, Lexar Media and Cirrus Logic. Pedley says his company is looking to provide venture capital to American companies of Middle Eastern origin to set up off shore operations back in the Middle East in hopes of creating a cycle much like the one created in India in the early 1990s.
Omran’s agency is also developing a national e-signature system, and said MCIT has a plan to further develop the IT sector through 2010, but declined to reveal any further specifics.
We re looking to learn from India, Omran said. We don t look at India as our competitor. India has gone far ahead of us because they have done their homework 15, 17 years ago. We re late, yes. But better late than never.
Pedley added the Egyptian economy stands to benefit from VC-backed businesses if numbers in the US can serve as an indication. VC-backed businesses accounted for 11 percent of US gross domestic product in 2005 and employed 11 percent of the workforce.
Making another comparison with the US, Pedley said Egypt s economy can also benefit from the relatively inexpensive investment in WiMax technology, which provides high-bandwidth wireless communication through a closed area network usually about 4 km. in radius.
In the US right now there s a big movement to get wireless access to everyone, just because they know of the secondary economic impact of that, said Pedley. For a few million dollars, you can connect all of Cairo using WiMax towers.
WiMax networks have been set up in several developing countries including Brazil, Columbia and Georgia. Omran said MCIT is now studying the possibility and will likely make the call for licensing bids in the near future.
