By Mohamed Fawzi
The Ministry plans to direct significant investments in telecommunications infrastructure to promote high-speed internet and improve the quality of services provided. The ministry has set a value of EGP10 billion for private investment in the areas of technology, electronics, and cloud computing, which many more companies in the sector have been utilising recently.
Minister of Communications, Atef Helmy, said that one of the ministry’s priorities is to finalise the consolidated license which will allow an overhaul of the telecommunications sector to take place. The sector will be rebuilt on clear, professional, and transparent plans in dealing with all partners to enhance efficiency and communications services so that citizens get the best service at the least possible cost. This is also a strategic goal of the state.
The consolidated license will grant Telecom Egypt 80% of its shares currently owned by the state and the right to provide mobile service in Egypt at a time when foreign companies control the mobile market locally. France Telecom owns 94% of shares in Mobinil while Vodafone Group owns 55% of shares of Vodafone Egypt. Etisalat has a 60 percent stake in Etisalat Egypt.
Helmy predicted that operational procedures for the unified license will begin within weeks, stressing that there will obstacles if cooperation is not achieved. Additionally, the Founding Committee for the establishment of a National Entity for Infrastructure is exercising its duties and is currentlyselecting global consultants to conduct studies on the establishment of this company, its work style, and the plans it will undertake.
Helmy emphasised that this license will contribute to an increase in state revenues of EGP 33bn over 15 years, expand the num ber of employees working in the sector, attract foreign investments, and improve Egypt’s international rankings in the telecommunications sector. Additionally, the license will create a competitive environment and companies will increase foreign investments in the sector. Finally, it will also contribute to the broadband plan implementation.
Helmy explained that the size of the targeted investment during the 2014/2015 fiscal year in the telecom and IT sector is EGP 22bn, and that the sector isappealing for investments while playing a crucial role in creating new jobs.
He also pointed out that the size of investments to be pumped into the sector will reach EGP 12bn, while an additional EGP 10bn will be invested in the fields of technology, cloud computing, electronics, specialized applications, and solutions for various other sectors.
Regarding methods employed by the ministry to encourage global companies to increase foreign investments in the sector, he said that the ministry relies on Egypt’s competitiveness in attracting foreign investment. This boils down to the most important element, the availability of human resources, which, if proper training is in place, will be able toachieve great success in terms of quantity and quality.
He added: “The other element that we rely on is Egypt’s geographic location which allows for the provision of many services for companies via the Smart Village, the technological zone in Maadi, and the technological areas being established in many other governorates.”
He also emphasised that the telecommunications sector has a promising structure that is able to cope with the demands of the global market, and that thisfostersa presence in the technological areas and smart villages.
Helmy said that the last element required for stimulation is the need to attract foreign investments, which will contribute to enhanced political stability through major developmental projects that reflect the government’s focus oneconomic growth.All these factors will encourage investors in the coming months.
On a similar note, Helmy stressed that the ministry is also in constant contact with foreign companies, noting that discussions are ongoing with Cisco, Etisalat Egypt, and Vodafone Group to increase investments and drive sector growth.
He confirmed that positive steps were taken in these discussions, including the opening of three new buildings in the technological zone in Maadi.
Helmy said that the company’s strategy is nationalistic, which is represented throughachieving digital socio-economic development in Egypt. The goal is to stimulate and promote sector growth and attract increased foreign investment to create new jobs.
In time, this will also promote development of policies, strategies, and indicators for the telecommunications and IT sector and encourage international cooperation which will lead to the development and modernization of IT infrastructure and technology for the different ministries, institutions, and government agencies and ultimately a better life for the citizen.Helmy is optimistic this will improve Egypt’s situation in the field of outsourcing on the global stage through information and communication technology, enabling the Egyptian citizen, and focusing on developing the IT and communications business sector.He hopes this will create an appropriate environment to foster technological innovation, creativity, and entrepreneurship in IT and its applications.
Helmy added that the introduction of Broadbandis among their priorities, and EGP 45bn worth of investments over seven years have been set aside to enhance high-speed internet and the field of cloud computing to provide solutions for governmental and non-governmental services for citizens. This will save time and effort, fight corruption, and help achieve social justice.
He pointed out that the sector’s growth rate for 2013 amounted to 9.8% and the ministry is striving to achieve a growth rate of 12% during 2014 and 20% in 2020.
Regarding the Suez Canal project, the minister said Ministry of Communications and IT participation is represented in several mega projects with investments worth between EGP 13bn to 15bn to construct communications and IT infrastructure, whereby the government will contribute at a rate of 10% to 15%.
He also pointed out that the ministry will implement three major portions of the project in collaboration with the governorates of Ismailiaand Suez under the purview of the cabinet. The first major portion is represented in the construction of a global logistics area to be a starting point for regional markets in the Middle East and Africa.
According to Helmy, the second major portion is represented in the establishment of a global center for internet services whose goal is to maximise investments and benefit from the introduction of 17 submarine cable paths through Egypt. The project will generate revenues of about EGP 1bn annually and encourage international companies to create larger servers for their customers in Egypt.
The third main portion focuses on reviving the Technology Valley project, east of the Suez Canal, which aims to create an urban industrial society that depends on the establishment of new high-tech industries and modern software and electronics. The minister is a member of the Committee of Ministers of the Development of the Suez Canal region, which was formed under the Prime Minister’s Decree No. 144 for the year 2013.