CAIRO: The telecommunications sector is expanding faster than any other industry in the nation, but there are still many unexplored opportunities that should be addressed.
“The real boom is coming from the telecom side. In the mid-90s when we looked at the business plans of the first operations in Egypt, people were expecting 500,000 users in Egypt. Now we have 30 million users, around 40 percent of the population, said the Chief Executive Officer of Information Technology and Services Co. (ITSC) Rahim El-Kishky in an interview with Daily News Egypt.
Egypt’s telecommunication infrastructure has improved throughout the years and, with the accelerating number of Internet users, the industry has experienced further growth. El-Kishky is optimistic about Egypt becoming a regional IT hub, saying that the ministry’s initiatives are boosting the country’s chances to compete globally.
From his point of view, the government has done a lot to create a well-educated work force in the IT sector and it’s not difficult to find employees with technical expertise. The real problem, he says, is finding employees with a sufficient business background, namely because a lot of the qualified caliber prefer to pursue careers abroad, mainly in the UAE and Qatar, where they find better opportunities and higher salaries.
There is a lot of potential for Egypt to expand its telecommunications services. For example, it can promote the use of Wimax even though there is “a fear that it will compete with GSM, he said. A possible solution is to offer Wimax without the voice service, which would restrict it to only data.
While Egypt’s economy has been growing – attracting more foreign direct investments (FDIs) and generating high levels of foreign activity on the stock exchange – El-Kishky says “we’re missing out on many opportunities.
People could be investing much more, he said, but the sense of ambiguity towards Egypt’s future holds them back. Egyptians might not have this concern, but those living abroad might feel otherwise.
El-Kishky feels that Egypt could be attracting more if there was a sense of political certainty in the nation. “It’s not an issue of who succeeds, it’s just the need to have a clear succession plan, he said.
ITSC was established early 1998 jointly with General Electric (GE), before its current shareholders bought out GE’s shares in 2000. In June of that year, ITSC partnered with Egypt Post creating E-PostServ and managed to position itself as the main electronic gate to post offices around Egypt.
Supported by ITSC, Egypt Post is adopting an aggressive plan to automate all of its offices in the coming five years and turn them into electronic kiosks, serving corporations and individuals. By working on having the largest electronic network in Egypt, the Post is an integral part of the Ministry of Communications and Information Technology’s e-government initiative.
Egypt Post also offers numerous banking services, with extended hours of operation and a network of 3,600 branches making it convenient to customers. The Post currently has LE 33 billion in deposits, has accounts for over 13 million clients (savings and checking), and handles over LE 100 billion annually – almost a third of the government’s budget.
ITSC has also been awarded a project by the Egyptian Customs Authority to handle all the manifests at airports and marine ports. “We have a topnotch EDI (Electronic Data Interchange) switch that handles document exchange cycle at numerous ports in Egypt, he said.
El-Kishky is also the Middle East consultant for Telecom Italia Sparkle. He was one of the members of the joint consortium between Telecom Egypt and Telecom Italia that bid for the third mobile license in Egypt, which was awarded to UAE-based Etisalat for LE 16.7 billion.
“[The cost of the license] could have been an exaggerated price, but there were different calculations at stake. Telecom Egypt have lower costs because of their existing infrastructure, but the maximum we could pay for this investment to be feasible was LE 10-11 billion, which is where we stopped. For Etisalat, they have operations in Saudi Arabia, the UAE and Sudan, which are doing very well, so there are a lot of synergies between their operations here and other countries.
Being a third operator in Egypt has its challenges, namely to attract customers and to ensure that these customers actually use their mobile line.
Some people may get the Etisalat line for free, “but a lot of newly acquired subscribers are still using their primary lines from Mobinil or Vodafone, he said.
Despite the challenges, Etisalat has seen success mainly from their operations in other Arab countries. Proceeds from “international traffic, for example, should be one of the main revenue streams at least in the beginning. Similar to remittances, Saudi Arabia and the UAE send a large portion of international calls to Egypt.
Having strong presence in both countries, and controlling both ends of the call, Etisalat will be in a position to offer competitive offers that would give it an advantage over its competitors in Egypt, the UAE and Saudi Arabia.
